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QinetiQ, the defence, security and aerospace company, announces its interim results for the half year ended 30 September which saw:

  • Double digit increase in Group order intake with 13% orders growth in EMEA Services
  • Landmark contracts secured by ‘Explore’ businesses: Training, UAS Services and OptaSense®
  • High cash conversion
  • £150m share buyback underway; 40% complete at 14 November 2014
  • 29% increase in interim dividend reflecting confidence in financial strength and Organic-Plus strategy
  • Despite challenging markets, the Board’s expectations for Group performance in the current financial year are unchanged
H1 2015 H1 2014
(restated^)
Business Performance – continuing operations+
Revenue £365.6m £377.4m
Organic change at constant currency (2)% (16)%
Underlying operating profit £49.3m £49.5m
Underlying operating margin 13.5% 13.1%
Underlying profit before tax £46.0m £42.9m
Underlying net cash from operations (post capex) £57.0m £58.0m
Underlying cash conversion ratio 116% 117%
Underlying earnings per share 6.3p 5.9p
Net cash £205.7m £120.5m
Dividend per share 1.8p 1.4p

+The Group completed the sale of US Services on 23 May 2014. Total Group performance in H1 2015 included approximately two months contribution from US Services compared to six months in the prior period. Continuing operations (above) comprise EMEA Services and Global Products but exclude US Services.

The statutory reporting summary below includes the effect of the US Services disposal in H1 2015 and other specific adjusting items as outlined in the Group overview on page 3, notably a one-off net benefit of £27.1m in the prior period following closure of the Group’s defined benefit pension scheme to future accrual.

H1 2015 H1 2014
(restated^)
Statutory Reporting
Operating profit from continuing operations £48.0m £74.8m
Profit attributable to shareholders £32.9m £62.1m
Earnings per share including US Services 5.1p 9.5p

Leo Quinn, Group Chief Executive Officer said:

“With EMEA Services continuing to deliver strong performance and a number of ‘Explore’ businesses winning landmark contracts, QinetiQ is well positioned to deliver growth in sustainable earnings through the next stage of its Organic-Plus strategy. The Group creates value through its unique expertise and innovation, underpinned by financial discipline. This has enabled it to invest in the differentiated capabilities most needed by customers in today’s global defence environment and beyond.

“QinetiQ has a portfolio that combines high-quality earnings and strong cash generation with growth opportunities in new sectors and geographies. Equally importantly, it has the right people to deliver this strategy – a workforce committed to delivering value and proud of the customers they serve. This adds up to a significant change from five years ago and, as I leave the Group, I want to thank all our employees for their contribution to this transformation.

“Despite challenging markets, the Board’s expectations for Group performance in the current financial year are unchanged.”

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