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QinetiQ outlines growth strategy after a challenging year

Strong cash generation and a strategy to tackle changing military needs were slightly overshadowed by further developments at the MOD

While a 2 per cent dip in underlying operating profit to £109m is unlikely to get pulses racing, boss Steve Wadey's description of "solid" performance seems fair considering the barrage of headwinds that faced QinetiQ (QQ.) in the reported period. Fortunately, governments worldwide have recently unveiled rising budgets to counter a growing number of terrorist threats, although this time they want their money's worth.

IC TIP: Hold at 239p

Mr Wadey is confident that QinetiQ's core capabilities match the requirements of today's austerity-driven governments, but also admits that "staying the same won't be good enough". In light of these challenges, he outlined three strategic pillars centred on expanding internationally and becoming more innovative in matching customer requirements. So far this pledge has involved opening up a small office in Canada, partnering with BAE Systems (BA.) on a project in Chile, investing in next-generation robotics, developing cable fibre-optic sensor solutions for the rail industry and modernising the group's test and evaluation facilities.

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