QinetiQ Group (LSE:QQ.) said on Tuesday that it remains on course to deliver its full-year outlook, projecting an operating margin of around 11% and earnings per share growth of between 15% and 20%, after securing more than £3 billion of orders so far this year.
The UK defence specialist said cash conversion for the 2026 financial year is expected to be close to 90%. While acknowledging continued near-term uncertainty around defence spending in its core markets, the company stressed that its financial guidance remains unchanged.
Total order backlog is currently around £5 billion, supported by a qualified pipeline of approximately £11 billion. QinetiQ added that its book-to-bill ratio has stayed above one and is expected to remain at that level for the full year, with revenue cover broadly in line with expectations outlined at the half-year stage.
Order intake since the interim results has included a £205 million five-year Typhoon contract, an 18-month £67 million agreement to develop and manufacture laser technology, and a £20 million UK contract focused on next-generation laser weapons development. The group also pointed to a two-year extension worth AUD$67 million for the Joint Adversarial Test and Training programme, alongside a £34 million UK award supporting a mission-critical C4ISR programme. QinetiQ noted that it was unsuccessful in the re-competition for the ACE contract, which is expected to transition during the year.
From an operational standpoint, the company said strong programme execution and timely delivery of milestones across UK and US contracts continue to underpin margin performance and cash generation. It highlighted a DragonFire laser weapon trial conducted in November, which allowed the programme to progress to its next phase, and confirmed that in December it supported a multi-day trial for the Dutch Navy — described as the first such trial carried out by a NATO ally using its facilities.
QinetiQ also said it is advancing restructuring initiatives across the group, including aligning its US operations more closely with national defence and security priorities, implementing changes in Australia, and streamlining activities in the UK. The company expects to generate around £150 million in free cash flow, with distributions to shareholders planned through dividends and share buybacks.
Chief executive Steve Wadey said in a statement, “We have made positive progress securing more than £3bn orders year to date,” adding that the group has an order backlog of around £5 billion and a qualified pipeline of £11 billion.
Leave a Reply