Qinetiq reports 45 per cent jump in first-half profits

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Qinetiq, the defence group, cheered the market yesterday, as it reported a better-than-expected 45 per cent jump in interim profits and raised its full-year earnings estimate by a fifth.

The group said its performance was boosted by a good showing in its UK services and overseas technology businesses, but cautioned that severe defence budget cuts by governments around the world could threaten it in the longer term.

Leo Quinn, chief executive, said: "The customer base into which we're selling is contracting and there's a reluctance to commit to new orders in an uncertain market."

Qinetiq reported a £75m pre-tax profit for the six months to September, on revenues of £740m.

Revenues were down 9 per cent, in part because of delays to service contracts in the US and UK defence markets. However, the declining revenues were offset as cost-cutting measures, including 750 redundancies in the first half.