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QinetiQ growth strategy progressing despite challenges
QinetiQ (QQ.) 301.7p
Loss to Date: 11.5%
Original entry point: Buy at 341p, 12 December 2019
In a recent trading update defence and security specialist QinetiQ (QQ.) reported strong first-quarter orders and cash generation, despite the challenges presented by Covid-19.
QinetiQ is in a more fortunate position than some companies because it provides mission critical services to governments on long-term contracts, which are deemed essential and which helped keep the work flowing despite widespread global restrictions aimed at tackling the pandemic.
In addition 2019’s acquisition of US-based advanced sensor solutions provider MTEQ ensured revenues pushed ahead despite some delays in customer deliveries.
The strategy to internationalise the business and focus on mission-led innovation made good progress over the last few months with new contracts won in the US and Australia.
With data intelligence and analytics becoming more crucial in modern warfare, the £25 million acquisition of data and cloud specialist Naimuri, announced with the trading update, looks
like a good fit. The company provides services to the UK intelligence and law enforcement communities and has worked alongside QinetiQ on several programmes.
SHARES SAYS: QinetiQ continues to deliver on its growth strategy and remains a buy.