QinetiQ maintains full-year outlook

22nd Jul 2014 09:10

Security and defence group QinetiQ has maintained its outlook for the full year, although noted the uncertainty caused by the Ministry of Defence's (MoD) transformation programme and within its own Global Products division. The FTSE 250-listed company explained that the uncertainty caused by the MoD's programme was short-term and across the whole UK market, adding that the performance of its EMEA Servcies divison as a whole was expected to remain steady during the 12-month period. The division performed well during the first quarter, with utilisation levels remaining high, particularly in the Weapons and Maritime businesses. It also benefitted from continuing productivity improvements and better project execution embedded during its self-help phase eighteen months ago. There were "a wide range of possible outcomes" for the performance of its Global Products division, the company explained, as it has a "lumpy" revenue profile, which is dependent on the timing and shipment of key orders. "Although newer products are recording notable milestones, the drawdown of American overseas military forces is expected to continue to depress demand for conflict-related products, and the division is unlikely to see significant benefits from the repositioning of its US operations until later in the year," QinetiQ said. The division has shorter order cycles than EMEA Services and continues to be affected by the drawdown of overseas US military forces. Both visibility and predictability of key orders has continued to be limited. Overall, the balance sheet remained strong during the first quarter, with $248m of private placement debt paid down at the end of June. Shares had risen 0.82% to 208.70p by 09:05.NR