Qinetiq orders grow as defence boom continues

Defence firm Qinetiq said momentum for new orders had continued through the most recent quarter, as geopolitical tension continues to fuel global spending on defence.

The FTSE 250 firm expects to deliver “high single digit organic revenue growth” this year, in line with prior guidance, with full-year revenue under contract holding steady in the most recent quarter, it told markets.

“We have delivered a good operational and financial performance in the quarter, and our services and products continue to be of high relevance and significant value to our customers in a heightened threat environment,” Steve Wadey, group chief executive, said in a statement.

“Against a backdrop of political transition in our core markets, I am pleased that order intake momentum has been maintained, which underpins our long-term sustainable growth.”

Cash conversation at the half held consistent with historical levels at around 80 per cent, while the firm said its £100m share buyback programme remained”on track” to be completed in 2024.

Some £62m shares had been purchased as at the end of the second quarter.

Like other defence companies, Qinetiq has benefitted from rising geopolitical tensions around globe. Government military spending has soared in the wake of conflicts in Ukraine and the Middle East, as well as ongoing tensions between China and Taiwan.

“Reflecting the global threat environment and increase spending over the long-term by our customers in our core markets, we secured a number of highly strategic orders in the quarter,” Qinetiq said.

These include three-year, £150m deal with the British Army to deliver “tactical military communications,” and a ten-year, £237m contract with the German Army.

Based in Farnborough, Qinetiq employs around 8,500 people from the defence setor. It will publish interim results on Thursday 14 November.