QinetiQ ends year in line with forecasts, finance chief departs
By Josh White
Date: Tuesday 16 Apr 2024
(Sharecast News) - QinetiQ Group reported a good operational performance in the final quarter of its financial year on Tuesday, in line with market expectations.
The FTSE 250 defence technology specialist said that with strong organic revenue growth and a stable operating profit margin, its order intake for the year ended 31 March topped £1.7bn, achieving a book-to-bill ratio of 1.1x amid sustained high demand for its offerings.
It said the £100m share buyback programme initiated in January had progressed well, with six million shares purchased to-date at a cost of £22m.
Throughout the fourth quarter, QinetiQ said it saw trends it had identified in its interim results and third-quarter trading update, with EMEA services showing robust revenue growth driven by successful programme execution and long-term contracts.
Conversely, global solutions experienced slower growth due to challenging market conditions in the United States, resulting in modest revenue growth for Avantus in the second half.
Despite market challenges, QinetiQ said global solutions secured significant contract awards totaling $977m during the year, with a funded book-to-bill ratio of 1.2x, ensuring revenue visibility for the 2025 period.
Looking ahead, QinetiQ said it anticipated another strong year of growth in 2025, with EMEA services expected to drive stronger growth, while global solutions would maintain stable performance.
"During the fourth quarter we have continued to deliver against our strategy and driven good revenue growth and stable operating profit margin," said chief executive officer Steve Wadey.
"We have had a particularly strong period in EMEA services, thanks to excellent contract delivery across our programmes, and we expect further strong growth in this segment."
Wadey said the performance of global solutions was impacted by ongoing market conditions in the US, but added that a strong order intake at Avantus provided the firm with confidence in its platform for future growth.
"With a clear focus on disciplined execution of our strategy, high demand for our distinctive offerings and the good progress we have made this year, we have a robust plan to deliver long-term sustainable growth and compelling value for our shareholders."
QinetiQ also announced a number of executive appointments on Tuesday, with Martin Cooper appointed as the new group chief financial officer, succeeding Carol Borg, effective immediately.
Cooper, bringing over 25 years of experience in senior finance roles, including positions at BAE Systems, was expected to join the QinetiQ board by October.
During the interim period, Heather Cashin, the current group financial controller, would serve as interim group CFO, with support from former group CFO David Smith.
Additionally, QinetiQ said it had appointed Iain Stevenson as the chief operating officer and Will Blamey as chief executive of UK defence.
Stevenson, previously deputy chief executive of AWE, would join in July, leveraging his extensive experience in leading large business divisions in defence and construction sectors.
Blamey, who had been with QinetiQ since June 2018, would assume the role of chief executive of UK defence, having played a vital role in major programme development and delivery at QinetiQ.
Both positions would report to group CEO Steve Wadey.
At 0843 BST, shares in QinetiQ were down 4.53% at 341.6p.
Reporting by Josh White for Sharecast.com.
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