Results Centre

QinetiQ, the defence, security and aerospace company, announces its preliminary results for the year ended 31 March 2016 which saw:

Solid operating performance in FY16
8% increase in orders due to a multi-year contract renewal
Stable revenue and profitability with continued high cash conversion
Disposal of non-core Cyveillance business for net disposal proceeds of £22m
6% increase in the full year dividend; £47m remaining of share buyback programme
Focus on delivery of FY17
Markets continue to be challenging with some de-scoping and delay to orders
74% of FY17 revenue under contract, broadly consistent with previous year (77%)
Board expectations for Group performance in FY17 remain unchanged
Creating the conditions for growth
Set out vision and strategy
Reorganised the company
Launched a transformation programme to improve customer focus and competitiveness
2016 2015
Business Performance – continuing operations+
Orders £659.8m £613.6m
Revenue £755.7m £763.8m
Underlying operating profit £108.9m £111.3m
Underlying operating margin 14.4% 14.6%
Underlying profit before tax £108.7m £107.8m
Underlying earnings per share 16.3p 15.2p
Underlying net cash from operations (post capex) £103.6m £114.9m
Underlying cash conversion ratio 96% 103%
Net cash £274.5m £195.5m
Full year dividend per share 5.7p 5.4p
Statutory Reporting
Operating profit from continuing operations £75.3m £109.5m
Profit attributable to shareholders £106.1m £104.7m
Total earnings per share 18.1p 16.6p

+The Group completed the sale of US Services on 23 May 2014. Total Group performance in 2015 included approximately two months contribution from US Services. 2015 continuing operations (above) comprise EMEA Services and Global Products but exclude US Services. The statutory reporting summary above includes the effect of specific adjusting items and discontinued operations.

Steve Wadey, Chief Executive Officer said:

“Last year we delivered a solid operating performance in challenging markets. The expertise of our scientists and engineers is well matched to emerging themes in global markets. We are capable of more. I have set out our vision and strategy, reorganised the company and launched a transformation programme. These changes are creating the conditions for growth.”

The UK Government’s Strategic Defence and Security Review has brought clarity to key defence programmes but will require further savings to be delivered from ongoing defence transformation. This will provide future opportunities for EMEA Services to build on its strong record of delivering more for less, whilst recognising that in the short term there will continue to be uncertainty and the potential for interruptions to order flow. Although revenue under contract for FY17 is slightly below that of a year ago, the division’s performance as a whole is expected to remain steady this year.

The Group’s Global Products division has shorter order cycles than EMEA Services. At the beginning of the financial year, FY17 revenue under contract was slightly above that of a year ago, but the performance of Global Products remains dependent on the timing and shipment of key orders.

Overall, the Board’s expectations for Group performance this financial year remain unchanged.

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