MoD to give up QinetiQ veto

QinetiQ is to get a one-off payment from the Ministry of Defence (MoD) after the two parties signed an agreement releasing the MoD from accumulated costs incurred in previous years.

The defence technology firm will trouser £65m with the payment being reflected in the accounts for the next financial year, which starts on April 1st. The deal settles liabilities which otherwise would be expected to be recovered through revenue rates over a decade.

QinetiQ has also obtained MoD agreement to changes in its special shareholder rights. If approved, these will include removal of the MoD's right to veto any transaction or activity.

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Commenting on the proposed changes to the rights, Leo Quinn, Chief Executive Officer said: "This is a positive step in further modernising QinetiQ and was one of the key objectives of our 24-month self-help plan. As the group continues to transform itself into a competitive commercial business we look forward to working alongside the MoD, our key UK customer, in the next phase of our development."

As for current trading, the group said it remains on course to deliver on its expectations for the current financial year, but admitted the market outlook beyond the current year is uncertain as forward visibility remains lower than normal.

NR