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Summary
- QinetiQ Group PLC had anticipated revenue growth of high teens percentage during FY21 ending 31 March 2021.
- The Company had targeted operating profit margin ranging from 12% to 13% over the medium to long term.
- had won a £127 million five-year contract from the UK MOD related to rendering services on Typhoon combat aircraft.
QinetiQ Group PLC (LON: QQ.) is the LSE listed industrial stock. QQ.’s shares have generated a return of approximately 3.66% in the last 12 months. It is listed on the FTSE 250 Index.
The Company will announce its preliminary results on 20 May 2021.
Business Model
QinetiQ Group PLC is an FTSE 250-listed science and engineering Company operating in the defense, security, and aerospace markets. The Company has two broader business segments, i.e., EMEA Services and Global Products.
(Source: Company presentation)
Q4 FY21 Trading Update (for the three months ended 31 March 2021, as of 14 April 2021)
- The Company had expected high teens percentage revenue growth and high single-digit percentage revenue growth on an organic basis during FY21.
- Moreover, QQ. had anticipated a full-year underlying operating profit of at least £147 million during FY21. Also, the underlying operating profit margin during FY21 would be expected to remain ahead of the margin achieved during H1 FY21.
- The strong performance was driven by excellent delivery of the EMEA services portfolio as it neutralized the adverse impact of the Covid-19 pandemic in the Global Products division.
- Meanwhile, the gain made through the sale of three businesses last year would get offset by the goodwill impairment of the German business.
Recent Developments
On 04 January 2021, the Company had revealed the details of a £127 million five-year contract from the UK MOD related to rendering services on Typhoon combat aircraft. Moreover, the order was won through EDP (“Engineering Delivery Partner”) framework. With this, the total order won through EDP had now crossed £500 million. The Company provide engineering expertise through EDP to the UK MOD.
On 03 December 2020, the Company had announced the sale of OptaSense to Luna Innovations Inc. for the total cash consideration of £29 million. This disposal would not impact the full-year guidance provided with the interim results.
Share Price Performance Analysis of QinetiQ Group PLC
(Source: EODHD/Others, Thomson Reuters)
- shares were trading at GBX 347.20 and were up by close to 8.16% as of 14 April 2021 at 01:32 PM GMT. QQ.’s 52-week Low and High were GBX 234.20 and GBX 351.80, respectively. QinetiQ Group PLC had a market capitalization of around £1.84 billion.
Business Outlook
The Company had anticipated full year FY21 results to remain better than previous guidance. Furthermore, the Group had targeted a compound annual growth rate of mid-single-digit percentage in revenue over the next five years driven by the acquisitions aligned with the strategic objectives. Moreover, QQ. had expected capital expenditure to fall in the range of £90 million to £120 million per annum for the next two years. From a medium to long term perspective, the Company had targeted operating profit margin ranging from 12% to 13%. However, the Group had expected operating profit margin to remain lower by 100 basis points in the short-term due to an accelerated investment towards digital transformation and the evolution of the business mix. Overall, the Company is well-positioned to drive long-term growth driven by continued execution of the strategy.
