Qinetiq Share Discussion Threads

[mw] 29/11/2007 13:11

Thanks for bringing this to our attention wc. QQ always has been a good long term bet IMHO. The defence work is what will provide the majority of the earnings and if a steady year on year growth is reflected in the share price I will be happy. Although the whizzo technology grabs the headlines it is unlikely to provide major income in the short term, again in my opinion. It is the icing on the cake, which from time to time should provide a bit of excitement.
Crucially QQ is able to develop new ideas from within the security of a steady main income stream, a luxury many other high tech firms would be envious of, I suspect.

[wad collector] 29/11/2007 13:00

From todays Independent:

The Investment Column: The case for the defence: Qinetiq a good long-term bet
Brewin Dolphin; Acta
Edited by Andrew Dewson
Published: 29 November 2007
Our view: Buy

Current price: 182p

So far, the only admirers Qinetiq has won since its controversial flotation last March have been headline writers. But for investors, who made what and how cheaply are merely footnotes – what matters is how the company performs going forward and how management is going to spark some life into the shares.

At least yesterday's interim results gave investors something to cheer about. Operating profit was 35 per cent better than in the first half of 2006 at £46m, slightly ahead of forecasts, on the back of strong sales, up 18.5 per cent to £638.8m. Pre-tax profits rose by 9.3 per cent to £25.9m, and the interim dividend will be increased by 10.8 per cent to 1.33p per share.

The company also announced 400 job cuts as part of a review of its Europe, Middle East and African operations. Most of the job losses will be in the UK, where most of Qinetiq's EMEA manufacturing and operations are based. Qinetiq hopes that by spending £35m on restructuring now it will save £10m per year by 2009.

Perhaps not surprisingly given its defence budget, Qinetiq's most lucrative market is the United States. Organic growth was an impressive 24 per cent and the company is also seeing benefits from three US acquisitions over the last year. Revenue from the States increased by 54.7 per cent to £256.6m, making up almost a third of operating profits.

As a defence contractor, Qinetiq is never going to be far away from controversy, and certainly senior management got a once-in-a-lifetime deal when the company floated. Once-in-many-lifetimes to be more accurate.

But regardless of that, it is difficult to argue that Qinetiq has failed to deliver on its promises since it came to the market. The stock trades on an undemanding multiple of under 13 times forecast 2009 earnings and, if investors are not bothered by the ethics of the defence industry, Qinetiq looks in good shape to provide decent long-term upside.

Gosh I feel like a Ramper.

[wad collector] 28/11/2007 23:08

I see the results have set the BB ablaze. I guess we are all just bored with QQ's tidal movements.

QinetiQ to cut 400 despite profit jumpAngela Jameson, Industrial Correspondent
QinetiQ, the defence research business in which the chairman and chief executive made more than £35 million on the flotation of the business, will eliminate 400 jobs across the UK.

The defence research group, which was the subject of a critical report from the National Audit Office (NAO) last week, will cut the administrative and support jobs as part of a reorganisation of its business intended to focus on growth areas.

The defence company, which has had strong growth in its business in the United States, will reorganise its Europe, Middle East and Australasia divisions, leading to a charge of up to £35 million in the second half of the year.

It plans to put more than 100 separate business units into four large divisions focused on managed services, technology solutions, consulting and products – a move that it believes will improve operating profit by £10 million a year after it has cut out duplication and unnecessary overheads.

Graham Love, the chief executive, said that the reorganisation would put the company in a stronger position to address growth markets and would eliminate duplicated overheads. "It is not clear who will go yet, but we will run a restructuring and redundancy programme," Mr Love said.

The company said that it intended to be a net recruiter of scientists over the year, taking on about 400.

"We are restructuring this business so that we can accelerate the growth. We are certainly upskilling the organisation," Mr Love said.

QinetiQ has established a venture fund within its own business with a dedicated executive team, which will aim to exploit QinetiQ's successful research more aggressively. Building on the success of the emerging American business, QinetiQ wants to accelerate the growth of its business in Australia, where it has won its first contract, and the Middle East.

News of the reorganisation came as the company announced strong results for the first half of the year and said that the results for the full year were likely to be ahead of expectations. Underlying operating profit at the group rose by 34.5 per cent to £46 million, with organic growth of 21.6 per cent in the six months that ended on September 30. Pretax profits rose by 9.3 per cent to £25.9 million.

[wad collector] 28/11/2007 12:51

Results out - solid .Future looks secure enough to hopefully create some persistent share price rise.

[gunter guil] 28/11/2007 07:20

Interims out. Good strong figures for north america despite impact of $ weakness. Things are looking good.

[ianwest] 23/11/2007 11:37

Gordon Brown absolutely slated over the disposal of QQ in the NAO report. With any luck it might persuade him that keeping the gov's 19% stake is more trouble than its worth and he might dispose of it, leaving the way clear for a takeover by BAE or someone else suitably large at a nice premium to current languishing share price...

[cyberpost] 23/11/2007 09:20

Qinetiq deal 'cost UK taxpayers'


UK taxpayers could have gained "more money" from the privatisation of defence research firm Qinetiq, the National Audit Office (NAO) has said.

While saying taxpayers could have gained "tens of millions" more, the NAO also condemned an incentive scheme that netted fortunes for Qinetiq's bosses.

The government defended the sale and said it was excellent value for money.

But Lord Moonie, the minister behind the original sale to a US buyout firm, said that he had tried to delay it.

He was a defence minister in 2003 when a third of Qinetiq was sold to the US private equity group, Carlyle, for £42m.

Stock markets had slumped and Lord Moonie felt that the Ministry of Defence (MOD) would not receive a decent price for its shareholding, said BBC business editor Robert Peston.

But he was unable to resist Treasury pressure for the sale, Lord Moonie told the BBC.

"We were reluctant to proceed with the sale, but a combination of the Treasury and the fact we needed the money for items in our budget persuaded us to go on with it," said Lord Moonie.

'Excessive'

Carlyle's one third of Qinetiq grew in value to £372m, giving it a nine-fold return on its money.

Qinetiq's 10 most senior managers gained £107.5m after the move, a return of 19,990% for their total £540,000 investment in shares, a return labelled "excessive" by the NAO.


Qinetiq's two most senior executives, chairman Sir John Chisholm and chief executive Graham Love, made spectacular gains.

Sir John invested £129,000 in the company and now has shares worth £23m. Graham Love turned £106,000 into £20m.

Qinetiq's bosses were allowed to negotiate the terms of the incentive scheme with Carlyle while the private equity firm was bidding for the business, the NAO added.

Conservative MP Edward Leigh, chairman of the Commons Public Accounts Committee, said the taxpayer had been "short-changed" and that top Qinetiq managers had "won the jackpot".

The Liberal Democrats said the deal amounted to giving away "the family silver".



State agency to FTSE 250

Acting leader Vince Cable said: "It is completely unacceptable that the government has sold off a valuable national asset for a pittance, providing huge profits for the Carlyle group and the senior civil servants involved.

"This deal didn't sell the family silver; it gave it away."

Good value?

But the Ministry of Defence has defended the deal.

"It has delivered excellent value for money, generating more than £800m for the taxpayer, while protecting UK defence and security interests," said Baroness Taylor, Minister for Defence Equipment and Support.

She added that she is constrained by what she is allowed to say ahead of a hearing by the Public Accounts Committee in December.

Criticism of the deal will infuriate many business people, said the BBC's Peston.

"Although they acknowledge that Carlyle secured the stake at a great price, they point out that the MoD kept more than half of Qinetiq," he said.

"So the increase in value of Qinetiq as it moved into the private sector has actually generated very good returns for the taxpayer."

[wad collector] 23/11/2007 09:17

Well glad someone made a small fortune.

[ianwest] 22/11/2007 11:53

hopefully this latest broo-ha-ha about the QQ sale will result in the government relinquishing its golden stake and the share price rising to where it should be...

[damanko] 01/11/2007 21:44

More up activity than down recently, makes me think that (as usual) the market, ie the boys & girls in the city - know rather more than we do. Bought these mid 2006 at 1.67 or so, so am happy at the progress. But will hold whatever, long term business growth seems assured to me (of the company), whatever the share price. With the American business, despite the colour of the impending administration, defence spending will not decline. That's good enough news for me.

[gunter guil] 01/11/2007 14:00

me too. enjoy while it lasts!

Things seem to be going quite nicely in the US. Little article in the Washington post a couple of days ago:


Qinetiq to Do Tech Support for Navy

By Doug Beizer
Special to the Washington Post
Monday, October 29, 2007; Page D04

The Navy office that develops command and control and other information systems will receive technical support from McLean-based Qinetiq North America under a five-year, $24 million contract.

Qinetiq will provide the Space and Naval Warfare Systems Command's Office of the Chief Engineer with technical reviews and studies. The work, to be performed by the company's Mission Solutions Group, covers the office's space and enterprise information systems.

The chief engineer's office is responsible for making sure technical policies and standards are followed, said Steve Matthews, senior vice president of Qinetiq's Mission Solutions Group. Qinetiq's engineers will work with those in the chief engineer's office, he said.

"We will stand side by side with them and provide them support," Matthews said.

For example, if a contractor produces a satellite communications system for the command, the Navy and Qinetiq engineers will work together to ensure that the system's design and development meet specific milestones.

The Space and Naval Warfare Systems Command is charged with developing and supporting a variety of integrated systems, including command and control, communication, intelligence, surveillance and reconnaissance. It also is responsible for the Navy's business information technology and space capabilities.

In addition to systems engineering, the command also handles acquisition management, information assurance, engineering and logistics, research and development, and support operations.

Qinetiq North America's 2007 revenue is expected to be about $1 billion. The company has 5,500 employees, with about 600 to 700 in the Washington area. Qinetiq North America is the U.S. subsidiary of Qinetiq Group, a British defense company.

Doug Beizer is a staff writer with Washington Technology. For news on this and other contracts, go to

[corrientes] 01/11/2007 12:41

Good lord - I'm in profit.

[wad collector] 01/11/2007 10:18

It would be interestig to know what is going on behind the scenes at the MOD at the moment about Metrix.Having raised doubts about the 2nd phase of DTR , the share price has surprisingly continued to rumble upwards .Almost up to the issue price!

[ianwest] 31/10/2007 10:40

"Sir John seemed happy to confirm that the MoD and Qinetiq might be fooling about with cameras and projectors for camouflage purposes"

[wad collector] 25/10/2007 13:30

My reading of the DTR statement is that it merely affirms the process is in motion.Anyone else spotted anything different? No harm to remind the stockmarket of its existence.
I see the later UPDATE clarifies that there is a potential problem.

[ianwest] 23/10/2007 15:44

thought I'd try and find out some more about these Heathrow RFID trials (reply first, then my original)...

----------------

Hi Ian,

No update as yet apart from to say that the equipment has been installed and we will be pushing forward with the trial shortly.

I will be in contact in the next couple of weeks to put a date in your diary to come and see the technology.

Donna Casey
Media Relations Manager
Heathrow Airport
Tel: [phone]
Fax: [phone]
Mobile: [phone]


----- Forwarded by Phil Groves/Public_Affairs/LHR/BAA on 23/10/2007 10:18
-----

Hi
I was wondering if you could provide any updates as to the progress of the RFID trials at Heathrow which were originally due to begin in September 2007.

I appreciate that you cannot give any details of participants, exact details of the technology etc, but any update you can give as to when the trials are due to begin (if they haven't already), how long they are expected to last for, when results may be announced etc would be much appreciated.

I look forward to your response.

Ian West

[ianwest] 16/10/2007 16:50

QQ price seems to have been edging up the past few days...?

'course, we were due the results of the Heathrow RFID trial in September, but they were delayed. we don't know for sure that it was QQ involved, but if it was, and if they went well...

although general newsflow seems to be excellent ATM - virtualy a story a day!

[ianwest] 10/10/2007 09:53

well, there's certainly no shortage of newsflow:

10 October 07
QinetiQ North America wins US Army Research and Technology Protection Contract valued at up to $35.8m

09 October 07
QinetiQ's North America subsidiary Foster-Miller unveils 'transformer-like' robotic platform

08 October 07
QinetiQ successfully demonstrates "Day Night All Environment" visibility solution for helicopter pilots

...

doesn't seem to be doing much for the share price though - yet...

[ianwest] 03/10/2007 13:48

price starting to recover slightly, looks like...

[wad collector] 01/10/2007 21:35

This is a stubborn share - just when it seems to be making a sustained recovery,the share price slips back again.Latest directorial buy sends one positive message.Ah well ,must get out of the habit of looking ; it can become an obsession - I will try not to look for a whole week.I could give it up any time if I wanted to....

[wad collector] 27/9/2007 17:24

Ahh ,some upwards momentum at last .Next stop £3. ;-)
BAE is soaring at the moment , time a bit of Arms Sector enthusiasm rubbed off on QQ.

[ianwest] 24/9/2007 10:01

could this be why the QQ price is slipping?

Heathrow needs more time before RFID luggage trial


of course we don't know for sure that it was QQ going to be involved in the trials, but there aren't that many RFID companies out there, especially ones with RFID chips that work near metal (luggage zips etc...)

very frustrating. I reckon Omni-ID and Ocellus could both be big big winners (to say nothing of their very many other products), yet the price is slipping continually..

[dr darkstar] 22/9/2007 22:15

and so how many have they sold?
and how many have the competition sold?
I thought you put ducks in baths .. not dead ducks!!

[wad collector] 21/9/2007 20:27

Cool toy, not sure it will fit in my bath.

[davy99] 21/9/2007 10:03

Looks like QQ. should be on the up today + next week.

Nice new product: