29th Sep 2006 07:01
QinetiQ Group plc29 September 2006 QinetiQ Group plc29 September 2006 QinetiQ Group plc - Pre-Interim Close Trading UpdateQinetiQ Group plc, the international defence and security technology company,today issues the following trading statement in respect of the six months ending30 September 2006. The company's interim results will be announced on 30November 2006. The Board confirms that the outlook for the year remains in line with thatdescribed in the Company's 2006 Report and Accounts published in June and thestatement issued at the Company's Annual General Meeting on 28 July 2006.Progress in the evolution of the business remains consistent with expectationsat the IPO. The UK business has, as expected, traded broadly in line with the prior year.There have been some notable sales successes including a £52.5m extension to oursupport package contract with MOD for the Typhoon project, a £10m contract fortest and evaluation services to Lockheed Martin for the Merlin helicopter and anumber of new wins for our secure hosting facilities, including a £1.6m contractwith Aegate. We have also successfully flown our Zephyr solar powered UAVnon-stop for 18 hours, with strong customer interest being shown. As previously indicated, a significantly greater proportion of UK profit isalways earned in the second half and this year that trend will be amplified bythe previously announced restructuring programme in the Defence & TechnologySector (D&T), the costs of which have been incurred in the first half and areexpected to total some £9m. The prior year performance of the Security & DualUse Sector (S&DU) benefited from £9.4m of royalty income in respect of LCDpatents which have now expired, but partially offsetting this we see some firsthalf margin benefit from the timing of revenue investments within S&DU. QinetiQ's North America Sector (QNA) is delivering good underlying organicgrowth. Continuing strong shipments of the Talon robot have been supported bythe recent receipt of a further $23m of funded contracts and strong customerinterest in SWORDS, the armed variant. With the US DoD budget having been signedthree months into their current fiscal year, order intake was slower thanexpected at the beginning of the period but has accelerated as the half hasprogressed. Overall growth has, as expected, been somewhat held back by theanticipated decline in revenue from Westar's high margin Air Filters businesscompared with the first half of last year. The OSEC acquisition, completed inMay 2006, has traded in line with our expectations at the time of itsacquisition. The weakening US dollar, which has declined by some 4% year onyear, has impacted the translation of the trading results of QNA operations,although we continue to maintain the majority of our net debt in US dollars tomitigate the economic impact. QinetiQ's operating cash conversion remains in line with expectations, whichinclude the impact of the cash outflows associated with the restructuringprogrammes announced at the end of the prior financial year.The Board considers that QinetiQ has made a solid start to its first full yearas a public company. For further information please contact:Nicky Louth-DaviesHead of Media and Corporate AffairsQinetiQT: +44 (0)1252 392809www.qinetiq.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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