QinetiQ Group plc
Pre-close statement and update on LTPA
29 March 2018
QinetiQ Group plc ('QinetiQ' or 'the Group') today issues an update before entering its closed period for the full year ending 31 March 2018.
The Group maintains its expectations for overall performance for FY18. Underlying trading in both the EMEA Services and Global Products divisions was as expected during the final quarter of the year.
QinetiQ's largest contract is the 25-year Long Term Partnering Agreement (LTPA) with the UK Ministry of Defence (MOD), signed in 2003 and running until 2028 with five-year repricing points. The Group is in detailed and constructive repricing discussions with the MOD regarding the operation and management of 15 LTPA sites and facilities not covered by the amendment signed in December 2016. Given the number of the facilities involved in the discussions, QinetiQ and the MOD have developed an interim pricing arrangement for twelve months beginning 1 April 2018, covering QinetiQ's continued delivery of test, evaluation and training support services. This interim arrangement will be under existing LTPA contract terms. The Group is confident of successfully concluding the repricing discussions within this twelve month timeframe.
As stated in the trading update on 8 February 2018, the EMEA Services division is bidding for a number of new opportunities with UK Government that will enable enhanced capability while also driving cost efficiencies. We are now the sole bidder negotiating with the UK MOD regarding the Engineering Delivery Partner programme which we will deliver in partnership with Atkins and BMT.
QinetiQ's preliminary results for the full year ending 31 March 2018 will be announced on the 24 May 2018.
Ends
Background information on the LTPA contract:
· |
The Long Term Partnering Agreement (LTPA) is a key contract for QinetiQ covering a significant part of our UK Test and Evaluation (T&E) and training support capabilities. o Under the contract, QinetiQ receives approximately £300m revenue per annum, consisting of approximately (i) £200m to operate, manage and ensure the availability of sites and facilities ("Non-Tasking" services), and (ii) £100m for utilisation of the sites and facilities ("Tasking" services) |
· |
In December 2016, in line with our strategy to lead and modernise UK T&E, we successfully renegotiated the Non-Tasking element of the air ranges and test aircrew training facilities under the LTPA, representing approximately £100m revenue per annum, with pricing agreed until 2028. |
About QinetiQ:
QinetiQ is a leading science and engineering company operating primarily in the defence, security and aerospace 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:
David Bishop, Group Director Investor Relations and Communications: |
+44 (0) 7920 108675 |
Ian Brown, Group Head of Investor Relations: |
+44 (0) 7908 251123 |
Jon Hay-Campbell, Group Head of External Communications: |
+44 (0) 7500 856953 |
Disclaimer
This document contains certain forward-looking statements relating to the business, strategy, financial performance and results of the Company and/or the industry in which it operates. Actual results, levels of activity, performance, achievements and events are most likely to vary materially from those implied by the forward-looking statements. The forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words 'believes',' expects', 'predicts', 'intends', 'projects', 'plans', 'estimates', 'aims', 'foresees', 'anticipates', 'targets', 'goals', 'due', 'could', 'may', 'should', 'potential', 'likely' and similar expressions, although these words are not the exclusive means of doing so. These forward-looking statements include, without limitation, statements regarding the Company's future financial position, income growth, impairment charges, business strategy, projected levels of growth in the relevant markets, projected costs, estimates of capital expenditures, and plans and objectives for future operations. Forward-looking statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Nothing in this document should be regarded as a profit forecast.
The forward-looking statements, including assumptions, opinions and views of the Company or cited from third party sources, contained in this announcement are solely opinions and forecasts which are uncertain and subject to risks. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to be correct. Actual results may differ materially from those expressed or implied by these forward-looking statements. A number of factors could cause actual events to differ significantly and these are set out in the principal risks and uncertainties section of this document.
Most of these factors are difficult to predict accurately and are generally beyond the control of the Company. Any forward-looking statements made by, or on behalf of, the Company speak only as of the date they are made. Save as required by law, the Company will not publicly release the results of any revisions to any forward-looking statements in this document that may occur due to any change in the Directors' expectations or to reflect events or circumstances after the date of this document.
