Qinetiq reinstates dividend after improved second quarter

Qinetiq Group has reinstated both its dividend and full-year guidance after a strong finish to the first half, the defence technology specialist confirmed on Wednesday.

Qinetiq said order intake in the six months to 30 September had been “particularly strong”.

“Our focus on recovery delivered good revenue and profit performance during the second quarter, resulting in us finishing close to our original targets, despite Covid-19 impact in the first quarter,” it added.

“As we enter the second half, we are now renewing our focus on driving sustainable growth while being mindful of the potential risk of further impact due to the pandemic.”

The former government-controlled group anticipates full-year order intake to be up on the previous year, with “high single digit percentage revenue growth”. It is maintaining its medium to long-term operating profit margin guidance of 12% to 13%.

“However, we expect the short-term margin to be around 100 basis points lower, driven by Covid-19 disruption, increased investment in our digital transformation programme and evolution of our business mix,” it said.

The board agreed to pay an additional dividend of 4.4p share, representing the deferred final dividend from last year. That brought the total dividend for the 12 months to 31 March to 6.6p a share.

Steve Wadey, chief executive, said: “The business remains robust with encouraging new orders and significant order backlog, good liquidity and a strong balance sheet.

“We have delivered a good first half performance and as a result are able to reinstate guidance and confirm payment of the previously deferred dividend.”

As at 1100 BST, shares in Qinetiq were ahead 4% at 280.2p. The additional dividend will be paid on 16 November to shareholders on the register at 9 October.