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Investing/.com -- QinetiQ (LON:QQ) shares rose more than 2% on Thursday after the defense contractor reaffirmed its full-year forecast in a first-quarter trading update that offered limited new detail on revenue coverage.
The company maintained guidance for fiscal year 2026, including approximately 3% organic revenue growth, an operating margin of about 11%, and earnings per share growth in the range of 15% to 20%. Cash conversion is expected to remain strong.
QinetiQ said the year is unfolding as expected, having started with 75% revenue cover. It did not disclose the current revenue cover level.
For the first half, revenue is projected to account for 46% to 48% of the full-year total. EBITA margin for the period is forecast to be around 10%, implying approximately £95 million in EBITA.
Consensus figures show £105 million, suggesting a larger contribution is required in the second half to meet full-year targets.
In the U.K. defense segment, QinetiQ secured a five-year, £1.5 billion extension to the Long Term Partnering Agreement, a contract previously disclosed in the company’s full-year results.
In U.K. intelligence, the company won contracts worth up to £110 million to provide operational support and training to the Ministry of Defence.
This compares to a forecast of £198 million for first-half revenue in that division and total orders of £388 million in fiscal 2025.
Revenue in the Europe, Middle East and Africa services segment continued to be driven by program execution, the company said.
In the U.S., QinetiQ reported continued progress on its restructuring program. Operations remain focused on maritime systems, advanced sensors, space and missile defense mission support, and persistent surveillance systems.
Orders in the quarter included a $41 million sensor integration contract for the U.S. Army, a $49.9 million indefinite delivery/indefinite quantity agreement for sensor data management, and annual framework funding under the Strategic Capabilities Office contract.
Jefferies analysts said the trading update was light on new detail but noted that QinetiQ’s performance appeared to align with expectations.
The £110 million in U.K. intelligence awards was described as a solid result within the context of the company’s forecast.