QinetiQ Group plc Trading and COVID-19 update (3213I)
01 Aprile 2020 - 08:00AM
UK Regulatory
TIDMQQ.
RNS Number : 3213I
QinetiQ Group plc
01 April 2020
News release
QinetiQ Group plc
Trading and COVID-19 update
1 April 2020 - QinetiQ Group plc (QinetiQ or the Group) today
issues a trading update covering its fourth quarter to 31 March
2020.
FY20 results: performance in line with expectations
Building on a strong first half to the financial year, the Group
has continued to perform in line with our expectations during the
remainder of FY20 despite the impact of COVID-19. However, given
the unprecedented nature of COVID-19 and the Board's wish to adopt
a prudent course of action to protect the long term, it will
postpone the decision on the proposal of a full year dividend until
later in the year.
Response to COVID-19
The COVID-19 crisis is affecting all our key markets and we
continue to monitor closely the impact on our business. We have
seen some level of disruption to customer trials and product
shipments due to changing customer priorities and travel
restrictions. Whilst we have a strong order book, underpinned by
significant long-term contracts we are taking a measured approach
to protecting skills and critical capabilities, delivering flexibly
for our customers and ensuring resilience within the business.
Our priorities are:
1) Protecting the health and wellbeing of our employees and their
families
Our primary concern is for our people, whose knowledge and
expertise are key to our success. Globally, we are taking steps to
ensure that employees can work effectively and safely from home
while continuing to feel supported. For those employees who need to
work on our sites to enable delivery of critical defence and
national security programmes, we have implemented a range of
safeguarding measures including social distancing, additional
cleaning services and provision of personal protection equipment as
necessary to ensure our working environments are safe and
clean.
2) Continuing the delivery of critical work for our customers
The work QinetiQ does is vital to maintaining the capabilities
of defence, security and critical national infrastructure,
including the emergency services. Whilst our customers are facing
significant challenges due to the threat of COVID-19, we are
working closely with them to ensure we can provide support to the
delivery of their priorities at this critical time.
3) Maintaining the ongoing strength of QinetiQ for the long-term
The full impact of COVID-19 on our business is difficult to
predict and is dependent upon the extent and duration of actions
aimed at reducing the spread of the virus. To protect the business
we are implementing a series of actions in the short-term to
sustain our skills and critical capabilities for the long-term.
These temporary measures include the CEO and CFO agreeing to a
salary reduction of c.33% and the wider Board agreeing to a 25%
reduction in fees. We are also taking a prudent approach to
controlling cash outflows, including reducing operating expenditure
and deferring discretionary capital expenditure.
Maintaining balance sheet strength
We have a strong balance sheet and expect to end FY20 with
c.GBP60m of net cash available. We have an undrawn committed
revolving credit facility of GBP275m. The facility had an initial
term of five years and two one-year options to extend the final
maturity to September 2025.
Our customers are typically well-rated governments and at
present we do not anticipate the current COVID-19 situation to
negatively impact their payment practices.
Given the uncertainty surrounding the economic outlook, we
believe it is appropriate to remain prudent. In addition to the
pro-active steps we are taking around cost and investment, the
Board has decided to postpone the decision on the proposal of a
final full year dividend until later in the year when there is
greater clarity.
Outlook
With a strong balance sheet and order backlog of nearly GBP3bn
we enter FY21 from a position of strength, however we are realistic
that restrictions imposed by Governments internationally to counter
the spread of COVID-19 will have an impact on revenues. We are
working closely with our customers to understand their immediate
priorities and will provide a fuller assessment of the situation at
our full year results presentation.
Steve Wadey, Group Chief Executive Officer said:
"The business remains robust with good liquidity, a strong
balance sheet and significant order backlog. However we believe,
based on recent events, it prudent to implement a number of
short-term actions to control cash outflow. Our immediate
priorities are to protect the health and wellbeing of our employees
and their families; to continue to deliver the vital work we do for
our customers; and to sustain the skills and critical capabilities
of our business for the long-term. Our customers face unprecedented
challenges in overcoming COVID-19, while continuing to deliver
critical defence and security capabilities; we play a key role in
supporting them to do this.
"I would like to thank our people, who have risen to the
challenge this environment creates for QinetiQ and our customers.
Over the past weeks they have shown considerable commitment and
agility in responding to the changing ways of working while
continuing to safely support our customers. Never has our shared
purpose of saving lives, defending sovereign capabilities and
delivering where others can't felt more real or relevant."
About QinetiQ
QinetiQ (QQ.L) is a leading science and engineering company
operating primarily in the defence, security and critical
infrastructure markets. We work in partnership with our customers
to solve real world problems through innovative solutions
delivering operational and competitive advantage. Visit our website
www.QinetiQ.com . Follow us on LinkedIn and Twitter @QinetiQ. Visit
our blog www.QinetiQ-blogs.com .
For further information please contact
+44 (0) 7908
Ian Brown, Group Head of Investor Relations: 251123
+44 (0) 1252
QinetiQ press office: 393500
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