Qinetiq Group (LON:QQ) holds a unique position in the global defense market, providing capability generation and assurance in challenging times. The company is working tirelessly with the UK MOD to provide world-class Test and Evaluation (T&E) facilities in the face of a tight budget environment. In addition, it is building its global footprint, leveraging both its technological expertise and global defense budget dynamics.
FY18: Second successive year of growth
FY18 group orders were £687.4m, up from £276.3m at H118. FY19 revenue under contract at the start of FY19 stood at 75% for EMEA Services and 51% in Global Products. The latter reflects the shorter-term nature of contracts in this division. FY18 revenue at £833.0m (FY17: £783.1m) was up 3% on an organic basis, with EMEA Services up 4% and Global Products down 4% on the same basis. Acquisitions and currency drove revenue growth to 6%. Underlying operating profit was £122.5m (FY17: £116.3m), with a higher contribution from non-recurring items. Excluding these non-recurring trading items, currency and acquisitions, underlying operating profit fell by £3.4m (H118: £3.6m) in EMEA Services, primarily due to a lower baseline profit margin on single-source contracts (c 75% of the division). Underlying basic earnings per share of 19.3p (FY17: 18.1p) increased by 6.6% and the dividend increased 5% to 6.3p (FY17: 6.0p).
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