QinetiQ cautious on impact of defence cuts
DEFENCE group QinetiQ, which is axing 260 jobs from its base in Worcestershire, said it had made “solid progress” during the first half of the year with revenue increasing 7% to £865m from last year’s H1 figure of £806m.
Pre-tax profit during the six months to the end of September was £51.6m, up from £45.1m in the corresponding period last year. Net debt was reduced to £327.0m from £452.3m in H1 last year.
The group said it had been helped by demand from Afghanistan but remained cautious because of the uncertain outlook in the United States. It is continuing with the restructuring of the UK business in light of recent defence spending decisions .
Leo Quinn, group chief executive, said Officer of QinetiQ Group plc, said the debt reduction was a yardstick of the company’s progress and was crucial in building a stable platform for the business.
“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.
“Government policy reviews in both the US and UK have impacted the letting of contracts in our services businesses, but tight control on costs and the strong demand in Global Products have produced a solid performance. At the same time, the level of cash generation demonstrates our determination to strengthen the balance sheet.
“Work continues on streamlining the group structure and processes, building up the leadership team and embedding the changes we have put in place,” he said.
“As yet the effect of new Government policy, in both the US and UK, has not worked through to detailed implementation. Absent any immediate material change in customer requirements, overall the board believes that the group will meet its expectations for the current financial year, as the Global Products business fulfils current order demand. We will continue to position the group for profitable growth in the medium term,” he added.
