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Qinetiq Group plc

QinetiQ Group delivers profitable growth and progress

QinetiQ Group (LON: QQ.) have issued results for six months to the 30th September 2019.

Statutory resultsUnderlying* results
H1 2020H1 2019^  H1 2020  H1 2019^
Revenue£486.5m£420.3m£486.5m£420.3m
Operating profit£68.5m£47.8m£59.7m£51.6m
Profit after tax£62.2m£50.1m£52.0m£45.8m
Earnings per share11.0p8.9p9.2p8.1p
Interim dividend per share2.2p2.1p2.2p2.1p
Total funded order backlog£3,083.6m£1,882.1m
Total orders in the period1£410.8m£298.1m
Net cash flow from operations£77.0m£54.9m£77.0m£54.9m
Net cash£173.5m£220.8m£173.5m£220.8m

*Definitions of the Group’s ‘Alternative Performance Measures’ can be found in the glossary.

^ Restated due to the retrospective adoption of new accounting standard, IFRS 16, in respect of finance leases. Refer to Note 1.

1 H1 2020 excludes LTPA contract amendment signed 5 April 2019.

Delivered strong operational and financial performance

  • 38% increase in orders, 30% on an organic basis, driven by growth across the Group
  • 16% revenue growth, 10% on an organic basis, driven by good performance in both divisions
  • Underlying operating profit up 16% including £1.6m non-recurring trading items (H1 2019: nil), excluding them up 8% on an organic basis
  • Strong cash performance with 129% underlying cash conversion pre-capex
  • Underlying EPS up 14%; 2.2p interim dividend – one third of FY19 full year dividend

Continued focus on strategy implementation

  • On-track with delivery of new LTPA contract for UK Ministry of Defence (MOD)
  • Grown international revenue to £150.8m (H1 2019: £129.7m) – 31% of total revenue
  • Won £67m secure navigation programme for UK MOD
  • Good acquisition performance, including 50% growth in QinetiQ Target Systems revenue
  • Announced acquisition of MTEQ; US presence to increase to c25% of Group revenue

Priorities and expectations for the remainder of the year

  • Operational performance; 96% of forecast FY20 revenue under contract (H1 2019: 90%)
  • Win further competitions and pursue campaigns globally
  • Drive sustainable profitable growth through continued investment
  • Maintaining expectations for Group operating profit in FY20

Steve Wadey, QinetiQ Group plc Chief Executive Officer said:

“Our strategy to drive value for our customers and shareholders continues to gather momentum. We delivered a strong first half result, with organic growth in orders, revenue and profit driven by a good performance across our businesses, both in the UK and internationally. We are maintaining expectations for full year operating profit with high single digit revenue growth.

“Our focus for the remainder of the year is to win further campaigns globally, successfully deliver key programmes, and complete the acquisition of MTEQ to transform the scale of our US operations as we build an integrated, global defence and security company.”