Defence supplier QinetiQ maintains position

DEFENCE supplier QinetiQ has said its third quarter performance was in line with expectations and that its full year outlook remains unchanged.

The firm said the performance of its UK Services continued to benefit from a more competitive cost base and better project execution.  

It added that a five-yearly periodic review of the Long Term Partnering Agreement had been successfully completed and terms had been agreed with the MoD for the provision of test, evaluation and training support services through to March 2018.

“The division continues to explore the medium-term opportunities presented by QinetiQ’s ability to support the MoD in its defence transformation programme,” it said in a trading update.

In the US, it said the high level of uncertainty in the federal services market has been maintained by the extension of the sequestration deadline to March 1, 2013.  
Delays to contract awards continue to impact the performance of the US Services division and a significant number of bids remain outstanding.  

“The division is continuing to plan and implement cost reductions to retain competitive rates in challenging market conditions,” it added.

The performance of the Global Products division for the year will be first-half weighted following the delivery of two key orders for the Q-NetTM vehicle survivability product, plus additional spares orders, during the first six months of the year.

It said that a strong net cash position in the half year had helped to ensure the group’s balance sheet and cash generation remained healthy.

In outlook, it said: “Visibility remains much lower than usual, particularly in the US.  Despite this uncertainty, with the benefit of the strong first half performance the board believes the group as a whole will perform in line with its expectations for the year, absent any material change in customer requirements.”