QinetiQ serves up fourth consecutive year of growth

(Sharecast News) - QinetiQ reported its fourth consecutive year of growth on Thursday, with its orders up 25% excluding the LTPA amendment, making for its largest annual order intake in nine years.
The FTSE 250 defence technology company said its revenue was up 18% to £1.07bn, or ahead 10% on an organic basis for the year ended 31 March.

Underlying operating profit grew by 7% to £133.2m, or 2% on an organic basis, with underlying earnings per share 2% higher at 20p.

The firm reported underlying cash conversion of 133% pre-capital expenditure.

During the year, QinetiQ said it secured £168m of orders under its engineering delivery partner (EDP) contract, and won four major long-term contracts in the UK, the US and Belgium.

It completed the acquisitions of MTEQ in the US and NSC in the UK, and managed to grow its international revenue to 31% from 21% over four years.

The company also said it had improved employee engagement by 10%, driving what it called a "high performance culture".

Looking at its response to the ongoing Covid-19 coronavirus pandemic, QinetiQ said it had implemented "robust" action to build resilience to the immediate challenges.

It said it was partnering with its customers to respond to their evolving priorities, engaging its employees to adapt its working practices, and accelerating its capabilities to meet the needs of what it termed "a new world".

As it had previously announced, guidance for group performance and a dividend decision would be made later in the year.

"Our immediate priority in response to the Covid-19 crisis remains protecting the health and wellbeing of our people who are doing a fantastic job continuing to deliver critical work for our customers," said chief executive officer Steve Wadey.

"The impact on our performance has been limited to date, predominantly in our shorter-cycle products business.

"We have taken prudent actions to boost the resilience of our company by managing cash outflows and reducing costs in the short-term, whilst ensuring we continue to deliver for our customers."

Wadey noted that the company delivered a fourth consecutive year of top-line growth, adding that its strategy was working to successfully become a "truly integrated" global company.

"With strong order intake, organic profit growth and net cash on balance sheet, we enter this period of uncertainty in a strong position enabling us to be agile and proactive in addressing both the short-term challenges and pursuing medium to long-term growth."

At 0844 BST, shares in QinetiQ were up 4.93% at 319p.