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QinetiQ Shares Plummet 20% Following Delays in UK and US Defence Contracts

The British defence firm cites restructuring costs, government policy changes, and geopolitical uncertainty as reasons for reduced revenue and profit forecasts.

A QinetiQ Banshee Jet 80+ is displayed during the Association of the United States Army annual meeting and exposition at the Walter E. Washington Convention Center in Washington, U.S., October 14, 2024. REUTERS/Nathan Howard/File Photo
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The UK defence sector represents around 50 per cent of group revenue, UK intelligence about 25 per cent and global solutions — which is predominantly its US sector — about 25 per cent

Overview

  • QinetiQ warned of delays in awarding short-term defence contracts in both the UK and US, impacting revenue and profit expectations for the fiscal year ending March 31, 2025.
  • The company announced a £140 million impairment charge related to its American business, which is undergoing restructuring to drive future growth.
  • Organic revenue growth for the current fiscal year has been reduced to approximately 2%, down significantly from 14% in the previous year.
  • In the UK, the Labour government has promised to accelerate defence procurement, but industry clarity is pending a government spending review this spring.
  • Despite challenges, QinetiQ plans a £200 million share buyback over the next two years, signaling confidence in its long-term strategy.