QinetiQ Group plc Fourth Quarter Trading Update (3430W)
17 Abril 2023 - 3:00AM
UK Regulatory
TIDMQQ.
RNS Number : 3430W
QinetiQ Group plc
17 April 2023
News release
QinetiQ Group plc
Fourth Quarter Trading Update
17 April 2023 - QinetiQ Group plc ("QinetiQ" or "the Group")
today issues a trading update covering its fourth quarter to 31
March 2023.
Strong operational performance in fourth quarter - upgrading
full year guidance
The Group has delivered strong operational performance during
the fourth quarter, reflecting continued disciplined execution of
our strategy. Today, we are pleased to announce that we expect our
results for FY23 to be ahead of our previous guidance and the upper
range of market consensus expectations.
Following an impressive fourth quarter, full year order intake
is up by 40% at a record-high of more than GBP1.7bn, demonstrating
the continued high demand for our distinctive offerings. Subject to
audit, we expect to deliver high-teens percentage total revenue
growth at stable margins, with underlying operating profit of at
least GBP175m, including the benefit of the Avantus and Air Affairs
acquisitions. In addition to the robust orders, revenue and profit
performance, cash flow management continues to remain consistently
strong and we have successfully reduced leverage to below 1x, ahead
of our original guidance by 12 months.
Global Products performance has been good, in particular our US
business has delivered well, with high order intake of $280m and
impressive revenue growth of 25%, prior to the benefit of Avantus.
We have won a number of key contracts in the US that will support
the delivery of our ambitious growth targets. These include a $93m
4-year sole source Indefinite Delivery Indefinite Quantity (IDIQ)
Digital Night Vision Technology contract and c.$20m of orders to
support the ongoing US Army Robotic Combat Vehicle Light (RCV-L)
experimentation. Since completion of the acquisition of Avantus at
the end of November 2022, the business has continued to perform
well, including two successful re-competes and selection for a new
$80m multi-year contract with a national intelligence customer. In
the first four months of our ownership, whilst new business awards
were lower than assumed, we achieved good performance across our
contracts delivering $100m revenue at our expected margin of 10.8%.
Integration is progressing ahead of plan and we are actively
pursuing revenue synergies by leveraging and cross selling our
offerings to our existing and new customer base. The combination of
capabilities across QinetiQ and Avantus has created a disruptive
defence and intelligence business in the US and we remain on-track
to deliver on the strategic and financial returns outlined
previously.
In EMEA Services, we have achieved a number of strategic wins
with continued good growth in the UK and Australia. In the UK we
have won a GBP259m 10-year renewal of the Maritime Strategic
Capability Agreement (MSCA) with the Submarine Delivery Agency to
deliver critical sovereign capabilities in the assurance of the
Royal Navy's surface and subsurface fleet, including the UK's
continuous at sea deterrent. In addition, we won an GBP80m 10-year
mission data contract, known as SOCIETAS, with the UK MOD to
provide expertise, training and support to accelerate and transform
mission data production enabling the military to be better
protected in a rapidly changing threat landscape and enhance the
performance of advanced military systems. In Australia we have won
a A$13m 3-year contract to develop and manufacture a high energy
defensive laser weapon system prototype, to establish a sovereign
in-country High Energy Laser manufacturing capability for
Australia, demonstrating our global leverage of advanced technology
from the UK into Australia. Integration of Air Affairs is
progressing to plan and performance remains in-line with
expectations.
Steve Wadey, Group Chief Executive Officer said:
"Our better than expected Group performance and strong order
book is testament to our employees and their clear focus on the
disciplined execution of our strategy. The integrations of Avantus
and Air Affairs, two strategically significant acquisitions in the
US and Australia, are progressing well and create a strong global
platform. These achievements, coupled with effective use of our
balance sheet, provide positive momentum for us to deliver
sustainable performance in the years ahead and we remain on-track
to reach our strategic growth ambition.
"Our distinctive offerings remain in high demand, demonstrating
we are well placed to respond to our customers' long-term needs
driven by world events and the importance of a technologically
advanced defence industry to the national security interests of our
3 home countries."
Inside information
This announcement contains inside information and the person
responsible for making this announcement is James Field, Company
Secretary and Group General Counsel.
Preliminary results
We will announce our full year preliminary results on 25 May
2023. We will be hosting an in-person results presentation with
live webcast, at 09:30 hours BST on 25 May 2023 at Numis'
auditorium, 45 Gresham Street, London EC2V 7BF. To register to join
this event, please see details on our website here:
https://www.qinetiq.com/en/investors/results-reports-and-presentations/full-year-results-webcast-2023
About QinetiQ
QinetiQ (QQ.L) is a leading science and engineering company
operating primarily in the defence and security markets. We work in
partnership with our customers to solve real world problems through
innovative solutions delivering operational and competitive
advantage. Visit our website www.QinetiQ.com . Follow us on
LinkedIn and Twitter @QinetiQ. Visit our blog www.QinetiQ-blogs.com
.
For further information please contact :
John Haworth, Group Director Investor Relations: +44 (0) 7920 545841
Lindsay Walls, Group Director Communications
(Media enquiries): +44 (0) 7793 427582
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