QinetiQ shares surge on buyback extension, profit leap, record orders

(Alliance News) - QinetiQ Group PLC on Thursday extended its share buyback as it reported strong profit growth supported by a record order intake.

In response, shares in the defence technology company jumped 10% to 475.62 pence each in London on Thursday morning.

Farnborough, Hampshire-based QinetiQ said it swung to a pretax profit of GBP155 million in the half-year to March 31 from a loss of GBP106 million the year prior.

Underlying operating profit increased 18% to GBP218 million from GBP185 million at a margin of 11.3%, up from 9.6%.

Revenue edged down 0.5% to GBP1.92 billion from GBP1.93 billion, but increased 1.3% on an organic basis driven by a good UK performance.

Earnings per share totalled 20.1 pence, swung from 33.0p losses per share a year ago. On an underlying basis, EPS grew 21% to 31.5p from 26.1p.

The FTSE 250 listing flagged a record order intake of GBP3.57 billion, up 83% on-year, and record year-end backlog of GBP4.8 billion.

Chief Executive Steve Wadey said: "We have delivered a resilient performance in more challenging markets, with organic revenue growth, margin expansion and strong cash generation driven by disciplined execution and restructuring. Our record order intake and GBP4.8 billion backlog provide clear visibility of sustainable growth and strong multi-year cash flows."

Free cash flow ticked up to GBP159 million from GBP113 million a year ago.

Qinetiq's total dividend was raised by 24% to 11.00 pence per share from 8.85p, including a final payout of 8.0p, lifted from 6.05p.

In addition, it announced a GBP200 million extension to its existing share buyback programme, over two years commencing in March 2027, when the firm completes its current buyback.

In January 2024, QinetiQ announced a GBP100 million share buyback, which it extended by GBP50 million in November of that year, with a further GBP200 million extension announced in March 2025.

For financial 2027, it expects revenue growth between 3% and 5%, an operating margin 11.0% to 11.5%, EPS growth of 8% to 10% with more than GBP550 million of free cash flow targeted over financial 2027 to 2029.

By Jeremy Cutler, Alliance News reporter

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