Qinetiq Regulatory News (QQ.)

10 February 2016

QinetiQ Group plc

Third Quarter Trading Update

QinetiQ Group plc ('QinetiQ') today issues a third quarter trading update and reaffirms previous guidance for Group performance in the full year to 31 March 2016.

Trading Environment

The UK defence market remains uncertain. While the Government's Strategic Defence and Security Review was published in December 2015, it is likely to take some time before its impact is clear. Additionally, the Single Source Regulations Office (SSRO) is not expecting to publish the single source profit rate for the next financial year until March 2016.

EMEA Services

The performance of EMEA Services was in line with expectations in the period and revenue under contract for this financial year is as anticipated at this stage, but the division has continued to experience some de-scoping and delay to orders. During the period, EMEA Services won a contract with Motorola Solutions to provide monitoring, assessment and assurance services in support of the delivery of the UK Emergency Services Network. As announced in November 2015, it also secured a £153m five-year renewal from the UK Ministry of Defence (MOD) for aircraft engineering support.

In December, QinetiQ sold Cyveillance Inc. to Looking Glass Cyber Solutions Inc. for net disposal proceeds of £22m. Cyveillance is a former business unit of the US Services division, sold in May 2014, and more recently has been reported in EMEA Services. In the full year to 31 March 2015, it had revenues of $18m.

Global Products

Trading in Global Products was as expected during the period, and revenue under contract for this financial year is as anticipated at this stage, but its performance remains dependent on the timing and shipment of key orders in what is a shorter order cycle business.

Among the division's new orders in the period, the OptaSense business was awarded a contract to protect approximately 2,000km of pipeline which, once installed, will be the world's largest distributed fibre sensing project. The total value of the project is more than $30m of which approximately half has been contracted with OptaSense.

Outlook

Overall, the Board's expectations for Group performance in the current financial year remain unchanged from those set out in QinetiQ's interim results announcement dated 19 November 2015. ENDS

Notes to Editors:

QinetiQ will announce its preliminary annual results on 26 May 2016.

Download the QinetiQ investor relations app for iPad and iPhone from the App Store.

A FTSE250 company, QinetiQ uses its world class knowledge, research and innovation to provide high-end technical expertise and advice, to customers in the global aerospace, defence and security markets. QinetiQ's unique position enables it to be a trusted partner to government organisations, predominantly in the UK and the US, including defence departments as well as other international customers in targeted sectors.

For more information see www.QinetiQ.com

Follow us on twitter @QinetiQ

For further information please contact: