Qinetiq defends against tough markets

In a trading statement ahead of its half year results to 30 September Qinetiq said the uncertainty was due both to the UK Government's ongoing strategic defence and security review and the drive by the US Secretary of Defense to reduce non-operational costs. Decisions on orders continued to be delayed across the sector and visibility remained limited, particularly in the UK, the company said. In the UK, revenues were running below last year, but the businesses continued to make progress on their restructuring programme to enhance competitiveness through a better focus in offerings and a reduction in costs. In the US, revenues were running at a similar level to the second half of last year, following the impact of government insourcing. The products business in the US had now received significant orders for its new vehicle survivability product, but this continued to be largely offset by the performance in the UK, where the business is suffering delayed or cancelled orders. The Group said it was implementing its self-help plan to "refocus the businesses, build a more commercial performance-oriented culture and strengthen the balance sheet". Looking ahead, Qinetiq said its Board believed the Group would meet current year expectations and it was continuing to reposition the business for a return to profitable growth over the medium term.