14th Oct 2021 08:39
(Alliance News) - QinetiQ Group PLC on Thursday reported a solid first quarter, but warned its full-year margin will be at the lower end of guidance.
QinetiQ also cautioned that it is experiencing supply issues on a "large complex programme", which it didn't name, that could result in the need for a one-off write down. It is working to cap the risk at below GBP15 million.
Shares in the Farnborough, Hampshire-based defence technology firm were 9.7% lower in London on Thursday morning at 297.21 pence each, making it the worst performer in the FTSE 250.
QinetiQ said its half-year performance was in line with market consensus forecasts, with "excellent" order intake of GBP700 million, up 25% year-on-year.
For the full-year, QinetiQ expects mid-single-digit organic revenue growth at around 5% but warned its underlying operating profit margin will be at the lower end of its 11% to 12% expected range.
"This expectation includes short-term effects of the customer's mission shifting from Afghanistan and Covid-related delivery and supply chain challenges in the US," the firm said.
Despite the short term woes, QinetiQ stressed it is maintaining its medium to long-term guidance. It continues to target mid-single digit percentage percentage compound annual organic revenue growth over the next 5 years.
"Similarly, we continue to target operating profit margin of 12% to 13%, although in the short-term we continue to anticipate margins being about 100 basis points lower, driven by increased investment on our digital transformation programme and by the evolution of our business mix," the defence technology firm said.
Capital expenditure remains in the region of GBP90 million to GBP120 million per annum for the next two years.
Chief Executive Steve Wadey said: "Overall the group has delivered strong operational performance in the first half of the year. We continue to deliver for our customers around the world, with EMEA Services delivering very strong performance to offset short-term weaker US performance in Global Products, due to the changing customer mission and Covid.
"We remain focused on delivering our strategy to build an integrated global defence and security company, through both organic growth and acquisitions. I am pleased with our continued strategic momentum, demonstrated by excellent order intake including a range of significant contract wins."
By Paul McGowan; [email protected]
Copyright 2021 Alliance News Limited. All Rights Reserved.
Related Shares:
Qinetiq