QinetiQ delivers strong Q1 following self-help programme

Privatised defence firm QinetiQ Group performed well in the first part of the financial year as its UK Service division continues to benefit from a more competitive cost base and better project execution as a result of the rigour embedded during the self-help programme.

The division is continuing to build on its core services expertise, securing a contract to establish a new Unmanned Air Systems Capability Development Centre (UASCDC) to support the MOD with the rapid development of UAS programmes from concept to deployment.

In US Services, the performance continued to reflect uncertainties in the federal services market with customers delaying contract awards. The division still has a large number of submitted bids awaiting award decisions.

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The Global Products division had a strong first quarter, receiving orders for the Q-Net vehicle survivability product that were expected in the second half of the year. Two key orders, with a combined value of $44m, were for Navistar's MaxxPro MRAP vehicles operating in Afghanistan and for the US Army's Heavy Expanded Mobility Tactical Truck - the first time Q-Net has been fitted to a large haulage vehicle.

During the quarter the firm continued to generate cash and also completed a programme to repay $177m of private placement debt.

"Despite continuing uncertainty in the US market, the board believes that QinetiQ's increased competitiveness and agility will enable the group as a whole to perform in line with its expectations for the current financial year," the firm said.

The share price rose 1.51% to 168p by 13:00.

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