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QinetiQ warns of delays to some UK contracts

The EMEA Services division continues to see some customer contract award decisions deferred

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Despite the delays, QinetiQ maintained full-year guidance

Defence firm QinetiQ (LON:QQ.) delivered an in-line trading update and maintained its guidance for the full-year, despite some bureaucratic delays to contract approvals.

In a brief update, it said the Government's Strategic Defence and Security Review (SDSR), and public consultation on the proposed approach to calculating the baseline profit rate for single source contracts, are both underway. 

It added that the EMEA [Europe, Middle East and Africa] Services division continues to see some customer contract award decisions deferred due to uncertainties in the UK market or delayed by requirements for additional approvals.

As anticipated, the group's Global Products division continues to trade at similar levels to the prior year.

“The SDSR is expected by year-end and will provide clarity,” said Liberum.

“Proceeds of any savings generated can now be reinvested rather than banked by the Treasury, which is a positive step. Disruptive technology spending in the S&T budget (albeit currently just 1.2% of overall spending) rises from 5% to 20% over 3 years,” it added.

Shares eased a halfpenny to 224.3p in a strongly rising market.

Quick facts: QinetiQ

Price: 295 GBX

LSE:QQ.
Market: LSE
Market Cap: £1.67 billion
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