24th Jan 2008 07:01
QinetiQ Group plc24 January 2008 QinetiQ Group plc24 January 2008 Interim Management Statement QinetiQ Group plc ('QinetiQ'), the international defence and security technologycompany, today issues the following Interim Management Statement, covering theperiod from 1 October 2007 to 23 January 2008. Group tradingTrading in the third quarter has remained robust and the results for the thirdquarter and trading outlook for the remainder of the year to 31 March 2008remain in line with the Board's expectations. QinetiQ North America (QNA)QNA has seen continued strong order levels across its business. In theTechnology Solutions Group Talon order visibility and shipment levels remainstrong and orders are expected for other products such as LAST Armor which isbeing incorporated into Force Protection Inc's Mine Resistant Ambush Protected(MRAP) vehicle programme for the US DoD. The Systems Engineering & TechnicalAssistance division has seen strong order flow including a $62m, 3 year taskorder to train Iraq's army helicopter pilots. The Mission Solution Group hasbeen awarded a new five year contract expected to be worth in excess of $100m toprovide environmental test and integration services at the Goddard Space FlightCenter for NASA and IT Services continues to see firm order levels despitebudget pressures being experienced by a number of its federal customers. In January 2008 the Mission Solutions Group announced the acquisition for up to$6.0m of the Virginia based network security specialist, Pinnacle CSI whichspecialises in services to enhance the protection of critical interagencynetworks within the Intelligence community. The Group continues to pursue ahealthy pipeline of acquisition opportunities to supplement the strong organicgrowth in the QNA sector. Europe, Middle East and Australasia (EMEA)The previously announced EMEA reorganisation and portfolio review remains ontrack and the new structure will be in place from 1 April 2008. Consultationshave commenced with affected staff and are due to complete in April 2008. Orderflow in the EMEA business is in line with expectations and notable amongst thewins is a £33m order as part of the successful consortium on the UK Government'se-Borders programme. In October EMEA announced the acquisition of Boldon James for initial cashconsideration of £15.7m. Boldon James is a UK based provider of softwaresolutions for high end secure messaging primarily for military, government andsecurity customers worldwide. This acquisition enhances QinetiQ's portfolio ofsecurity based software products and broadens its customer base. As part of the programme to build out established UK service offerings intoother defence markets globally, the Group has announced in January 2008 itsfirst acquisitions in Australia; Ball Solutions Group (consideration £6m);Novare Services (consideration £4m); and Aerostructures (consideration £5m).These three acquisitions provide the Group with a skilled workforce of over 275employees with combined historical turnover in excess of £20m per annum. Thiscreates an initial platform to provide consulting services, principally to theAustralian Department of Defence, and growth opportunities through theintegration of these businesses and leveraging appropriate offerings from the UKand North American businesses. The transactions are expected to complete inFebruary 2008. VenturesThe Ventures businesses continue to make satisfactory operational progress. TheTarsier business won an order from Doha International Airport for a three radarhead installation and has also successfully demonstrated a prototype of theintegrated camera system enhancement at London Heathrow. Financial positionThe balance sheet remains strong and there have been no significant changes inthe financial position of the Group since that reported as at 30 September 2007,other than in respect of the acquisitions noted above which were funded throughan increase in bank borrowings. OutlookThe Board remains confident about the outlook for the Group. Notes to Editors About QinetiQ:QinetiQ (pronounced ki net ik as in 'kinetic energy') is a leading internationaldefence and security technology business that was formed in July 2001 from theUK Government's Defence Evaluation & Research Agency (DERA). QinetiQ has over 13,500 employees, who deliver technology-based services and exploit QinetiQ's strengths in technology research by selling systems solutions, products and licences to government and commercial customers in a spectrum ofdefence, security and related commercial markets. In February 2006, QinetiQ Group plc was listed on the London Stock Exchange(main market) and joined the FTSE250 in June 2006. In the year to 31 March 2007,QinetiQ delivered a 17.4 per cent rise in underlying operating profit before tax to £106.0m on turnover which rose by 9.3 per cent to £1,149.5m. For further information see www.QinetiQ.com Contacts:QinetiQ Investor Relations: Adrian Colman +44 (0)7740 432699 DisclaimerAll statements other than statements of historical fact included in this document, including, without limitation, those regarding the financial condition,results, operations and businesses of QinetiQ and its strategy, plans and objectives and the markets and economies in which it operates, are forward-looking statements. Such forward-looking statements, which reflect management's assumptions made on the basis of information available to it at this time, involve known and unknown risks, uncertainties and other important factors whichcould cause the actual results, performance or achievements of QinetiQ or the markets and economies in which QinetiQ operates to be materially different fromfuture results, performance or achievements expressed or implied by such forward-looking statements. Nothing in this document should be regarded as aprofit forecast. 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