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QinetiQ stock soars 12% on 2024 results beat, increased guidance

Published 05/23/2024, 08:33 AM
Updated 05/23/2024, 08:36 AM
© Reuters.  QinetiQ stock soars 12% on 2024 results beat, increased guidance

QinetiQ saw its shares surge more than 12% in London trading Thursday, after the company reported better-than-expected earnings and revenue for the fiscal year 2024.

The firm posted revenue of £1,912 million, a 2% increase compared to consensus estimates.

EBITA for the year came in at £215 million, also 2% above consensus, and an earnings per share (EPS) of 29.4p, surpassing expectations by 6%.

Cash conversion was robust at 104%, resulting in a net debt of £151 million, which is 14% lower than consensus estimates.

In the Europe, the Middle East and Africa (EMEA) Services division, organic revenue grew by 19% to £1,417 million. EBITA for this segment was £163.4 million, with a margin of 11.5%, a slight decrease of 10 basis points compared to FY23.

Looking ahead, QinetiQ is increasing its guidance for the fiscal 2025, expecting strong growth in EMEA Services and stable performance in Global Solutions.

“This is a healthy set of FY24 results from QinetiQ, although not in our view, sufficient to support the +10% initial share price reaction,” Jefferies analysts commented.

“The higher exit-rate for FY24F should lead to LSD upgrades to FY25F EBITA forecasts, with the orderbook cover for expected revenue of 64%, tracking ahead of where it was last year (61%) and enhanced to 70% if unfunded US orders are included,” analysts added.

“More broadly, we sense a growing level of confidence about the group's ability to deliver £2.4bn of revenue organically in FY27F.”

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