British defence technology group QinetiQ said its key UK and US markets were still tough and that the outlook was uncertain given a lack of clarity on defence spending plans at home and abroad.
“QinetiQ’s principal markets have remained challenging with defence budgets on both sides of the Atlantic under pressure in light of government programmes to reduce fiscal deficits,” the company said in a statement on Thursday. “With detailed policy reviews still underway, visibility on future defence spending remains limited.”
The company, which makes bomb disposal robots and sniper detectors, said its US Services revenues had continued to run below last year in the period since November due to delays in the award of new contracts, less procurement and the impact of in-sourcing by the US government, Reuters reports.
QinetiQ, formerly Britain’s state-owned defence research agency, said delays and shorter duration contract awards were also being experienced across UK Services, which is working through the conclusions of last year’s Strategic Defence and Security Review (SDSR).
Britain last year slashed its defence budget 8 percent to help lower a huge budget deficit, cutting its army, navy and air force. US defence spending, also important to QinetiQ, was seen as flat at best.
However, QinetiQ said its global products unit continued to perform strongly as a result of deliveries of vehicle survivability products and gunfire detection systems to support operations in Afghanistan.
“Absent any material change in customer requirements or levels of production output, overall the board believes that the group will exceed its previous expectations for the current year, as the global products backlog is delivered,” the company said.
Shares in QinetiQ, which have risen 17.7 percent in the last three months, closed at 131.60 pence on Wednesday, valuing the company at around 870 million pounds.