22nd May 2025 10:28
(Alliance News) - Qinetiq Group PLC on Thursday said "tough near-term trading conditions" hurt business performance in the final quarter as it swung to loss in its recent financial year.
The Hampshire, England-based defence technology company reported a pretax loss of GBP106.3 million in the 12 months to the end of March, swung from a pretax profit of GBP182.7 million the year before.
Revenue increased by 1.0% to GBP1.93 billion from GBP1.91 billion. Operating costs grew 8.1% to GBP1.81 billion from GBP1.67 billion.
Qinetiq also took a goodwill impairment of GBP143.9 million in financial 2025, compared to no such hit in the prior year.
The firm swung to an operating loss of GBP90.5 million from a GBP192.5 million profit.
Qinetiq said this included specific adjusting items of GBP305.9 million including the goodwill impairment, restructuring costs and other impacts related to legacy US operations and the non-cash loss on the sale and lease back transaction.
"Tougher near-term trading conditions impacted performance in our UK Intelligence and US sectors in the fourth quarter. In response, we have taken decisive action and are focused on reshaping the business for growth, with a clear restructuring plan to strengthen and capture the increasing opportunities within our key markets," said Chief Executive Officer Steve Wadey.
Qinetiq ended the year with an order intake of GBP1.95 billion, up 12% from GBP1.74 billion in financial 2024.
"We finished the year with record order intake and continue to see strong demand for our mission-critical capabilities," Wadey added.
Qinetiq declared a dividend of 8.85 pence per share for the full year, 7.3% higher than 8.25p in financial 2024. This included a final dividend of 6.05p, up from 5.65p.
The company also completed a GBP100 million share buyback during the recent financial year and has extended this by an additional GBP250 million to be completed over the next two years.
Qinetiq said it has an increasing strategic focus to leverage its UK base to better serve NATO and its allies.
Looking ahead, it expects 3% revenue growth for financial 2026, with 75% revenue cover. It expects earnings per share growth between 15% and 20%.
CEO Wadey said: "The fundamentals of our business are strong, our priority remains on delivering value accretive organic growth."
Qinetiq on Thursday also announced a five-year, GBP1.54 billion extension to its long-term partnering agreement with the UK's Ministry of Defence.
The company said the deal will "transform the provision of mission critical test and evaluation capabilities".
Qinetiq added that it is also recognising an incremental order of GBP166 million related to current investments in test and evaluation.
Under the UK Defence contract extension, it will invest in tests, trials, training and evaluation for "next generation defence technologies" including uncrewed systems, hypersonics and directed energy weapons.
"Through the LTPA, we play a vital role helping to protect and enhance the UK's defence and security. The extension of our partnership with MOD enables us to continue investing to deliver the transformational change in test and evaluation that's required to ensure our armed forces have operational advantage over disruptive technologies," said CEO Wadey.
Shares in Qinetiq were up 6.4% to 468.00 pence in London on Thursday morning.
By Michael Hennessey, Alliance News reporter
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