QinetiQ remains on track for year

Defence firm QinetiQ said it remains on course to achieve expectations for the financial year ending March 31st 2013 after a robust UK services performance and as challenging US market conditions persist.

The group, which last month secured a £1bn deal with the Ministry of Defence to support to the armed forces over the next five years, said UK Services continues to perform well.

The division is "benefiting from a more competitive cost base, better project execution and improved alignment with customer needs and it is also continuing to explore the medium-term opportunities presented by MOD's defence transformation programme," QinetiQ said in a statement.

However it cautioned that in the US, market conditions remain challenging with order flow and visibility much lower than usual as customers defer decisions due to continued budget uncertainty.

QinetiQ said the business is proactively managing its cost base in order to maintain competitive rates.

"These actions are focused on cutting property and infrastructure costs, as well as reducing management layers, and will result in an exceptional charge this financial year of approximately $25m," it said.

Meanwhile QinetiQ reiterated that the performance of Global Products for the year will be first half weighted following the delivery of key orders for Q-Nets and spares during the first six months of the year

Last week QinetiQ confirmed its OptaSense distributed acoustic sensing (DAS) business has signed follow-on contracts with Shell.

The group said its balance sheet and cash generation remain strong.

CJ