QinetiQ Group plc Q1 Trading Update and Acquisition of Naimuri (8781S)
July 14 2020 - 1:00AM
UK Regulatory
TIDMQQ.
RNS Number : 8781S
QinetiQ Group plc
14 July 2020
News release
QinetiQ Group plc
First Quarter Trading Update and Acquisition of Naimuri
14 July 2020 - QinetiQ Group plc ("QinetiQ" or "the Group")
today issues a trading update covering its first quarter of trading
and announces the acquisition of Naimuri Limited ("Naimuri").
First quarter performance
As we entered the COVID-19 crisis, we took decisive action to
maintain the strength of our company and ensure we retain the
critical skills and capabilities to drive long-term growth. Our
response has continued to focus on our three strategic priorities
of protecting the health and wellbeing of our employees, continuing
to deliver critical work for our customers and maintaining the
strength of QinetiQ for the long-term. The actions we have taken
have increased the resilience of our company, allowing us to
maintain a strong balance sheet and position the company for growth
as we emerge from this crisis.
Order intake throughout the first quarter continued to be
strong, despite COVID-19 related disruption in all of our markets.
Although revenue and profit have been impacted by the disruption,
the proactive and robust cost management actions taken have reduced
the impact on profitability and delivered a strong cash
performance. As we have stated previously, due to the on-going
uncertainty of the COVID-19 crisis around the world, we will
provide guidance for Group performance as soon as possible to do
so.
EMEA Services
We have seen limited impact from COVID-19 within EMEA Services
as the division benefits from long-term contracts and delivers work
that is critical to sovereign defence capabilities. Some customer
trials and training activity have been delayed causing impacts such
as reduced flying hours in Germany; however, much of this activity
is now resuming.
Global Products
In Global Products we experienced more significant disruption
causing delays to customer deliveries, which are beginning to
resume; however, top line growth continued, driven by the
contribution of MTEQ.
Strategy Update
Our strategy to deliver mission-led innovation for our
customers' advantage and grow the company, whilst enhancing returns
for shareholders continues to gain momentum. With growing
uncertainty globally and an increasingly complex threat
environment, we believe our strategy is increasingly relevant to
this new world and will support growth in the coming years. We
successfully delivered a number of strategic milestones in the
first quarter demonstrating our progress as we leverage our
capabilities globally.
We are delivering on our commitment to lead and modernise UK
test and evaluation:
-- Through our Engineering Delivery Partner (EDP) programme, we secured
a GBP30m five year contract to provide mission data and technical
services to the RAF Typhoon Delivery Team. This contract is an example
of partnering with UK MOD to deliver better programme performance
and long-term savings.
-- We have continued to operate all the ranges under the Long Term
Partnering Agreement (LTPA) during the COVID-19 crisis to support
critical national defence outputs, including the first firing of
the Martlet missile from a Wildcat helicopter at MOD Aberporth,
a key milestone in demonstrating the ability to protect the UK's
new aircraft carriers.
We are continuing to successfully build a more international
company in our key home countries:
-- On 13 July 2020 we announced the signing of an agreement with the
Defense Counterintelligence & Security Agency (DCSA) to operate
all our US defence operations under a new Special Security Agreement
(SSA), replacing the previous Proxy Agreement. This agreement fundamentally
improves how we approach the largest defence market in the world
and is a major milestone in our growth strategy.
-- In Australia we have secured a contract to design and construct
an unmanned aerial systems (UAS) flight test range for the Queensland
Government, leveraging our skills and experience of operating some
of the most advanced land, sea and air ranges in the world under
the LTPA for the UK MOD.
We are increasing our focus on delivering mission-led innovation
to meet our customers' needs:
-- We have secured a managed service contract with the UK MOD, worth
up to GBP30m, to provide an Open Source Intelligence capability,
enabling our Armed Forces to use publicly available information
and social media content to improve understanding of global events,
emerging threats and to support operational decision-making. This
win builds momentum in our strategy to grow our data analytics and
intelligence capability critical to the future of modern warfare.
-- Today, we announce the acquisition of Naimuri on a cash-free, debt-free
basis for GBP25m. Naimuri is a leading software development and
data analytics company, providing agile cloud-based services and
technology to the UK Intelligence and Law Enforcement communities.
QinetiQ partners with Naimuri on several critical programmes delivering
mission-led innovation around data-intensive challenges. We will
invest and build upon Naimuri's strong capabilities in data analytics,
data intelligence and agile software development to meet customer
needs and drive growth in both the security and defence sectors.
In the 12 months to 31 July 2020, Naimuri is expecting to deliver
in excess of GBP9m revenue and GBP2m EBITDA. Naimuri employs c.70
people with its headquarters and main facility in Manchester. Naimuri
will be reported in EMEA Services, managed within the Cyber & Information
business.
-- On 25 June 2020 we announced the disposal of Boldon James Limited
to HelpSystems International Limited for GBP30m. Boldon James provides
data classification and secure email solutions, and in the year
ended 31 March 2020 generated GBP9m revenue. The disposal of Boldon
James and acquisition of Naimuri have been strategy-led choices,
generating capital from a non-core asset and reinvesting in a capability
that is central to our vision-based strategy, to drive growth and
shareholder value
AGM
QinetiQ's 2020 Annual General Meeting (AGM) will be held at 11am
today at our registered office at Cody Technology Park, Ively Road,
Farnborough, Hampshire, GU14 0LX.
About QinetiQ
QinetiQ (QQ.L) is a leading science and engineering company
operating primarily in the defence, security and critical
infrastructure markets. We work in partnership with our customers
to solve real world problems through innovative solutions
delivering operational and competitive advantage. Visit our website
www.QinetiQ.com . Follow us on LinkedIn and Twitter @QinetiQ. Visit
our blog www.QinetiQ-blogs.com .
For further information please contact :
John Haworth, Group Head of Investor Relations: +44 (0) 7920 545841
Chris Barrie, Citigate Dewe Rogerson (Media enquiries): +44 (0) 7968 727289
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END
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