7th Feb 2014 08:03
LONDON (Alliance News) - Defence technology company QinetiQ Group PLC Friday said its full-year outlook remains unchanged, with the downturn in its global products business meaning that the range of possible outcomes remains wider than usual.
The company's global products unit, which makes products including unmanned bomb disposal devices and technology that protects soldiers and vehicles from explosions or attack, has been hurt as the US and UK have scaled back military operations in Iraq and Afghanistan in recent years.
In a trading update, the company said the unit was continuing to be hit by the military drawdown in conflict zones and it is trying to broaden the unit's portfolio of products beyond defence to reduce its reliance on conflict spending. It has recently won a sensor deal with German rail operators Deutsche Bahn and an acoustic sensing deal in the oil and gas sector.
However, the unit is still heavily reliant on military deals and "foreign Military Sales are partially offsetting reduced US Government spending but visibility of further significant orders and their timing remains limited both in the US and overseas," it said.
Its other divisions, which provide a range of services in various sectors but are again weighted towards defence, have also suffered due to cuts in defence spending in the UK and uncertainties over Federal Government budgets in the US.
It said its EMEA Services division has delivered a robust performance since the end of September, while its US services unit performed in line with its expectations in its fiscal third-quarter.
"The US federal services market remains challenging due to uncertainties in the federal government budget and a slower contracting environment," it said.
Qinetiq reiterated that its 'Core' businesses and newer growth opportunities will drive an increase in sustainable earnings over the medium-term.
It added that cash generation in the fiscal third quarter was good and further improved its net cash position. It didn't give any figures.
Its financial year ends March 31.
QinetiQ shares were down 0.4% at 219.4 pence early Friday.
By Steve McGrath; [email protected]; @SteveMcGrath1
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