QinetiQ reflects on uncertain UK defence market
UNCERTAINTIES within the UK defence market have led defence supplier QinetiQ Group, which has a large facility in Malvern, to provide a cautious third quarter training update.
The FTSE250 company said: “While the Government’s Strategic Defence and Security Review was published in December 2015, it is likely to take some time before its impact is clear.
“Additionally, the Single Source Regulations Office (SSRO) is not expecting to publish the single source profit rate for the next financial year until March 2016.”
QinetiQ said the performance of its EMEA (Europe, Middle East and Africa) Services arm was in line with expectations in the period and revenue under contract for this financial year is as anticipated at this stage, but the division has continued to experience some de-scoping and delay to orders.
During the period, EMEA Services won a contract with Motorola Solutions to provide monitoring, assessment and assurance services in support of the delivery of the UK Emergency Services Network. It also secured a £153m five-year renewal from the UK Ministry of Defence (MOD) for aircraft engineering support.
In December, QinetiQ sold Cyveillance Inc. to Looking Glass Cyber Solutions Inc. for net disposal proceeds of £22m.
“Trading in Global Products was as expected during the period, and revenue under contract for this financial year is as anticipated at this stage, but its performance remains dependent on the timing and shipment of key orders in what is a shorter order cycle business,” the firm said.
Among the division’s new orders in the period, the OptaSense business was awarded a contract to protect approximately 2,000km of pipeline which, once installed, will be the world’s largest distributed fibre sensing project.
The total value of the project is more than $30m of which approximately half has been contracted with OptaSense.
