18th Jan 2022 09:32
(Alliance News) - QinetiQ Group PLC on Tuesday said it expects an annual outturn in line with expectations, with the defence technology firm adding that it now has more certainty in relation to a precarious contract situation.
QinetiQ shares were 3.8% higher at 281.20 pence each in London on Tuesday morning, one of the best mid-cap performers.
The Farnborough, Hampshire-based company hailed a "strong operational performance" in its financial third quarter, which ended December 31. Order intake has continued to be "excellent", now standing at over GBP900 million.
Revenue, operating profit and cash flow, meanwhile, are in line with expectations.
"With more than 95% coverage of our FY22 revenue under contract, we remain confident of delivering in line with expectations for FY22," QinetiQ added.
QinetiQ back in November had said it expected mid-single-digit organic revenue growth.
Inside November's interim results, QinetiQ also had warned on the timing and fate of one large "complex project". It cautioned that it would book a GBP14.5 million write-down from the pact, which it put down to various issues including supplier capability and contract delivery conditions.
On Tuesday, QinetiQ said it still expects the GBP14.5 million write-down, but add it is likely to close the contract during the current financial year.
"While negotiations may continue into FY23, closing this contract brings certainty to our exposure, which remains consistent with the GBP14.5 million write-down fully contained in our FY22 first half results," the company added.
Elsewhere, QinetiQ is making progress recovering its US performance and expects second-half revenue there to be in line with a year earlier.
QinetiQ is aiming to become an "integrated global defence and security company" with revenue of over GBP2 billion per year over the next five years. It had achieved annual revenue of GBP1.28 billion in the year ended March 31, 2021.
To aid in its revenue growth aims, QinetiQ during the third quarter named Shawn Purvis as its US chief executive. Purvis has "more than 25 years of experience in the US defence and intelligence industry".
The company has also undertaken "successful" field testing for an advanced bomb suit for the US army.
By Eric Cunha; [email protected]
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