QinetiQ faces down defence cuts with 'self help' plan
QinetiQ shares rose 11% today on increased profits and sales – and optimism that it can overcome government defence cuts.
Robot technology: Defence contractor Qinetiq will be hit by government cutbacks
The maker of bomb disposal robots and sniper detectors is planning to revamp the business and reduce debt in the face of cutbacks by its UK and US government clients.
The defence technology firm posted underlying pre-tax profits of £51.6m in the six months to September 3, up from £45.1m a year earlier. Revenue was up 7% at £865m.
Its shares rose 10.9p to 109.90p in today's trading.
The early retirement of the Harrier fleet and cancellation of the Nimrod MRA4 will impact on UK revenues, but Qinetiq said the Government's plans to invest in cyber security were a positive for the group.
It admitted the trading environment in the US was challenging, but said the markets in which it was well placed like IT, cyber security and logistics remained attractive.
'Our goal is to become more competitive and to use our deep relationships with customers to help them find solutions to the challenges they face,' said chief executive Leo Quinn.
'As yet the effect of new government policy, in both the US and UK, has not worked through to detailed implementation.'
Meanwhile, the company said it had cut net debt by a quarter to £327m over the past year, and cost cuts and self-help measures were starting to pay off.
Qinetiq was created out of the formerly state-owned Defence Evaluation and Research Agency. It controversially floated on the stock market in February 2006, netting huge windfalls for its directors.
The group has around 40 UK sites, with facilities in Farnborough in Hampshire, Malvern in Worcestershire, Salisbury and Boscombe Down in Wiltshire, Portsmouth, Plymouth, Glasgow and Christchurch in Dorset.
According to stock market legend, the company's odd name is a reference to the inventor Q in the James Bond films.
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