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Investing.com - Defence and security company Qinetiq Group PLC (LON:QQ) on Thursday reported first half results ahead of analyst expectations, with underlying operating profit of £96.0 million exceeding forecasts despite a 3% organic revenue decline.
The company maintained its full-year guidance, which may surprise investors who had anticipated a potential downgrade.
For the six months ended September 30, 2025, QinetiQ posted revenue of £900.4 million, down from £946.8 million in the same period last year. Despite the revenue drop, underlying operating profit margin of 10.7% exceeded the 10% guidance provided in the company’s first quarter trading update.
Underlying earnings per share remained flat at 14.2p, reflecting benefits from the company’s accelerated share buyback program.
The company secured orders worth £2.4 billion during the period, including a significant £1.5 billion Long Term Partnering Agreement (LTPA) extension to transform the UK’s Test & Evaluation capabilities for future warfare. Book-to-bill ratio stood at 0.9x, impacted by near-term UK market conditions.
"Operational performance in the half has been in line with our expectations," said Steve Wadey, Group Chief Executive Officer. "Despite tough market conditions, we delivered against our record order backlog and implemented our restructuring activities, including disposal of the US Federal IT business."
QinetiQ maintained its full-year guidance, projecting approximately 3% organic revenue growth pre-FX and Federal IT disposal, with margins around 11% and cash conversion of approximately 90%. The company expects earnings per share growth of 15-20%.
The board declared an interim dividend of 3.0p per share, representing a 7% increase from the 2.8p paid in the prior year, in line with its progressive dividend policy.
With revenue cover of 89% for the second half of fiscal 2026 and a significant backlog of £4.8 billion (funded and unfunded), QinetiQ expressed confidence in its long-term growth prospects despite challenging market conditions.