Rapid expansion for Qinetiq

24-08-2006

Defence firm QinetiQ have registered a pre-tax profit increase of 37.6 per cent in their preliminary results, the company has announced.

Boosted business from a period of sustained investment in what it described as a "commercialisation of defence technology" was responsible for the increase, the company claimed, helping to provide an overall profit growth of ten per cent.

It pointed out that prosperity in its US market from its sales of Blackhawk helicopters, desert kit and 500 Talon robots had played a key part in helping it increase its profits. But the firm has also had to cope with shifting sands in the competitive struggle for Ministry of Defence contracts, moving away from its traditional research specialisation into more hardware-oriented markets.

"I am delighted with the performance underpinning these results, which demonstrate real delivery against our growth strategy," Sir John Chisholm, executive chairman of QinetiQ, said.

"The successes of the year we have just completed have laid a solid foundation for delivering on these opportunities."

He warned, however, that constricted defence budgets on both sides of the Atlantic could prevent further growth in the next few months.

Qinetiq's results are the first since its flotation in February, since when its shares have dropped around 13 per cent from its initial public offering flotation price of 200p per share. They have not provided a boost for the defence group's share price, however, which fell by 2.5 per cent in trading this morning.

Alan Sharman, director general of the Defence Manufacturers Association (DMA), told the BBC that Qinetiq's future was "quite promising".

"It has obviously got good technology and it's investing in states for example where it sees a good market. And contrary to the concern that relationships between it and the US might become difficult, my understanding is that they are continuing well and they have made investments there.

'Of course there is the potential for spinning out a lot of the technology, and it is a matter of how successful they can be in continuing to do that."


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