Qinetiq reports a solid first quarter result

QINETIQ, the former research arm of the Ministry of Defence, said yesterday that first quarter results were in line with its expectations and reaffirmed its previous guidance for performance in the full-year to 31 March 2016.

This is welcome news for the FTSE 250-listed defence firm, which lost its chief executive Leo Quinn to infrastructure group Balfour Beatty last October.

The group said its EMEA services division delivered a “solid” performance during the first quarter, although some customer contract award decisions were deferred due to the government’s ongoing Strategic Defence and Security Review (SDSR) which was announced earlier this month.

While revenue under contract is as expected at this stage in the financial year, the firm warned that in 2016 “there will be uncertainty and the potential for interruptions to order flow.”

The firm said it was “well-positioned” to meet the dual challenges of budget pressures and increasing global security threats, although the specific allocation of the UK defence budget was unlikely to be determined until completion of the SDSR at the end of this calendar year.

Qinetic completed an additional £22m of its share buyback plan during the quarter and expects to finalise it in the next few months.