Join our community of smart investors

QinetiQ sees orders soar

Orders rose by a quarter last year
May 21, 2020

Defence technology group QinetiQ (QQ.) secured its largest order intake in nearly a decade in the year to 31 March. On the back of £168m of orders under its engineering delivery partner framework contract, total orders jumped by a quarter to £972m, excluding amendments to long-term partnering agreements with the Ministry of Defence. 

IC TIP: Buy at 309p

Statutory operating profit only rose 2 per cent to £118m, held back by a £14m goodwill impairment on its advisory services and German aircraft operations. However, organic revenue growth of 10 per cent was driven by a double-digit increase in the larger Europe Middle East and Australasia services division.

The £90m spent on the Manufacturing Techniques and Newman & Spurr Consultancy acquisitions meant net cash almost halved to £85m, offsetting strong free cashflow generation. As previously announced, a decision on the final dividend has been deferred.

House broker Numis expects adjusted pre-tax profit of £125m and EPS of 18.8p in 2021, down from £132m and 20p in 2020.

QINETIQ (QQ.)    
ORD PRICE:309pMARKET VALUE:£ 1.8bn
TOUCH:309-310p12-MONTH HIGH:394pLOW: 233p
DIVIDEND YIELD:0.7%PE RATIO:17
NET ASSET VALUE:156p*NET DEBT:£84.7m**
Year to 31 MarTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20160.7690.216.85.7
20170.7813221.56.0
20180.8314524.46.3
2019 (restated)0.9112320.16.6
20201.0712318.72.2
% change+18--7-67
Ex-div:na   
Payment:na   
*Includes £320m in intangible assets or 56p a share **Includes £27.9m in lease liabilities