17th Apr 2023 15:05
(Alliance News) - Qinetiq Group PLC on Monday predicted its annual outturn will be ahead of its previous outlook and hit the upper end of market consensus.
The Hampshire, England-based science and engineering company, which operates primarily in the defence and security markets, said its order intake in the year ended March 31 surged 40%. Topping GBP1.7 billion, it represented a "record-high" for the company.
Qinetiq expects yearly revenue growth in the high-teens, as well as underlying operating profit of at least GBP175 million. The profit measure includes the benefit of the Avantus Federal LLC and Air Affairs Australia acquisitions. Qinetiq bought both Avantus and Air Affairs in November.
Air Affairs is an Australian defence services company that specialises in air threat representation, test & evaluation, unmanned targets, and mission rehearsal. Avantus Federal provides cyber, data analytics and software development solutions to the US Department of Defence, Intelligence Community, Department of Homeland Security and other federal civilian agencies.
Qinetiq noted that the performance of its Global Products sector has been "good". In particular, it said that its US business has "delivered well", with order intake of USD280 million and annual revenue growth of 25%.
It added that in EMEA Services, the company achieved "a number of strategic wins", with good continued growth in the UK and Australia.
Analysts at Berenberg added: "We expect the shares to outperform today following some underperformance versus defence peers year-to-date."
Heading into the trading update, Qinetiq shares traded at a price-to-earnings ratio of 12.9 times, Berenberg said, when using the company's estimated financial 2023 outturn. It traded at a 10% discount to the European defence sector.
Qinetiq shares rose 3.3% to 363.24 pence each in London on Monday afternoon. It is up 2.1% year-to-date.
By Eric Cunha, Alliance News news editor
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