PRE-tax profit and operating margins have both risen at defence supplier QinetiQ despite a £125m drop in revenues.
The group, which operates a base in Malvern where it has axed around 300 jobs over the past 15 months, has seen year-on-year revenues drop from £864.9m to £739.6m for the six months ended September 30.
However, H1 pre-tax profit has gone from a loss of £37.6m in 2010 to £80.5m in the black this year.
Operating profit for the half year has also moved out of the red at £24.3m for 2010 to £79.7m.
Underlying pre-tax profit has climbed 45% from £51.6m to £74.9m while underlying operating margins have risen 7.5% to 11.2%.
Underlying operating profit has climbed 27% from £64.9m to £82.6m and net debt has fallen significantly from £327m to £145.3m.
The plc, headquartered in Farnborough, said today the uplift in group margin had been driven by UK services and global products and its American operations had been successfully integrated under new leadership.
It added that its board’s expectations for the current year had been upgraded by approximately 20% and an interim dividend payment of 0.9p reflected confidence in the medium term.
Chief executive Leo Quinn said: “Rapid execution of our self-help plan is building a stronger QinetiQ. The group is better focussed on delivering its customers’ changing needs, and this is starting to come through in its underlying performance.
“The board believes that, absent any material change in customer requirements, the group will exceed its original expectations for the current year by approximately 20%, although market uncertainties mean that visibility beyond the current year remains lower than normal.”
In a separate announcement, deputy chairman Sir David Lees is to step down from QinetiQ ‘s board at the end of January after six years with the firm. He will be replaced by engineer Michael Harper who is also a non-executive director of BBA Aviation and chairman of both the Vitec Group and Ricardo.
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