QinetiQ says trade solid despite U.S. uncertainty

886

British defence technology company QinetiQ said first-quarter trade had been solid but warned that it could be hit by contract delays caused by the U.S. presidential elections.

QinetiQ, which makes high-tech military equipment such as bomb disposal robots and sniper detectors, on Thursday said while uncertainty over defence spending was reducing in the UK, conditions in the U.S. were still unpredictable.
“Visibility remains extremely limited in the U.S., with delays continuing in the award of both Department of Defense and federal civil business,” the company said in a statement, Reuters reports.
“The uncertainty is expected to continue at least until the outcome of the U.S. presidential elections, particularly as the overhang of possible sequestration is unlikely to be resolved before the end of the calendar year.”

The U.S., which remains the world’s largest market for weapons, already has plans in place to cut $487 billion from its defence budget.

Congress could also make a further $500 billion in military spending cuts in January under a process known as “sequestration.”

QinetiQ, formerly Britain’s state-owned defence research agency, said its U.S. business still has a large number of submitted bids awaiting award decisions.

QinetiQ’s UK services business has performed well since April, benefitting from a more competitive cost base and the impact of a self-help programme, it said.
“Despite continuing uncertainty in the U.S. market … the group as a whole to perform in line with its expectations for the current financial year,” the company said.

Shares in QinetiQ, which have risen 10 percent in the last three months, closed at 165.50 pence on Wednesday, valuing the company at around 1.06 billion pounds ($1.64 billion).