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Highlights:
- Site Sale Completed: QinetiQ sells its 407-acre Cody Technology Park to Tristan Capital Partners for £112 million.
- Leaseback Agreement: Following the sale, QinetiQ will maintain operations on a portion of the site under a 15-year lease.
- Debt Reduction and Future Growth: The transaction is expected to reduce QinetiQ's net debt while facilitating further development at the technology park.
QinetiQ Group plc (LSE:QQ) announced on Monday the sale of its 407-acre freehold site at Cody Technology Park (CTP) in Farnborough to a fund managed by Tristan Capital Partners for £112 million. This transaction reflects QinetiQ's strategic priorities and aims to enhance its focus on core business operations while ensuring continued growth in the defence and technology sectors.
The sale is anticipated to complete within eight weeks, resulting in an immediate cash inflow of £112 million for QinetiQ. Following the completion, the company will enter into a 15-year leaseback agreement, allowing it to continue occupying its existing footprint at the site. This arrangement will enable QinetiQ to maintain its presence in Farnborough while reducing its net debt by approximately £65 million. The impact on underlying operating profit and cash flow is expected to be minimal, as the company will forfeit rental income from other tenants at the park.
Previously managing and maintaining the entire site, QinetiQ will now occupy about one-third of the space under the new leaseback arrangement. The remainder of the site will accommodate 96 other tenants, vacant spaces, and common areas. As part of the transaction, QinetiQ anticipates recognizing a one-off non-cash accounting loss of around £30 million upon completion, in line with IFRS 16 accounting standards.
Group Chief Executive Officer Steve Wadey expressed satisfaction with the partnership, emphasizing the commitment of Tristan Capital Partners to investing in the long-term future of Cody Technology Park as a center of excellence in defence, science, and technology within Hampshire. Wadey highlighted that this sale aligns with QinetiQ's strategic priorities and reinforces its dedication to serving customers effectively.
Wadey further asserted that the company remains fully committed to Farnborough as its group headquarters and a significant hub for science and technology in the UK. The deal is expected to initiate a program of investment by Tristan Capital Partners aimed at further developing and modernizing the technology park, benefiting all current and future tenants. This strategic move allows QinetiQ to channel resources into its core business while ensuring the technology park's growth and modernization.
