Qinetiq Share Discussion Threads

[dr darkstar] 19/10/2010 16:44

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[clubman] 19/10/2010 15:01

This stock was 15% down earlier now up strange one.

[pseudosphere] 19/10/2010 12:33

Article on BBC Website regarding DTR termination:

[etome] 19/10/2010 11:31

Oh dear...


MOD terminates Package 1 of the Defence Training Review Programme (DTR)

Following the Secretary of State's announcement today, QinetiQ confirms that it has been advised by the Ministry of Defence (MOD) that the procurement for Package 1 of the DTR programme is to be terminated with immediate effect. The MOD has stated that it believes that commercial and financial close, scheduled for March 2011, cannot be achieved within the prescribed period and the project is unaffordable. As a consequence, the MOD has concluded it is necessary to terminate the DTR procurement and Metrix's appointment as preferred bidder.

The MOD has confirmed that it intends to examine a range of alternative proposals for the rationalisation of defence training. These will consider how training may be delivered in the future from a Defence Technical College and St Athan in Wales will continue to be an option for its location. The MOD will commence work on alternative options as soon as possible.

Since the appointment of Metrix as preferred bidder in 2007, QinetiQ has incurred costs of GBP37m which to date have been capitalised on the balance sheet of the Group. We expect to write off the capitalised costs as an exceptional item and the QinetiQ Board's expectations of Group underlying performance for the year remain unchanged by this.

Commenting on today's announcement, Leo Quinn, Chief Executive said: "We are disappointed by today's news, but believe that the principles behind the programme remain unchanged. We look forward to discussing alternative solutions with the MOD for providing consistent high quality training across the Forces in a way which delivers value for money within the current budgetary constraints."

[hazelton] 10/10/2010 07:31

I knew of one of these people some years ago. They often went back as contractors as there is not a huge pool of people who know the detailed technical stuff. It dreadfully sad , you just lose the capability in the end. In twenty years time we cannot point to housing estates to show the world how well we are capable of doing.

[pseudosphere] 09/10/2010 18:04

At the Malvern site, where 260 jobs are to go in the current redundancy exercise, the consultation period for 70 of these employees has been extended until November 18. Of the remaining 190, a large number are being issued with compulsory redundancy notices. It is the intention of QinetiQ to try and develop part of the site for 300 new houses. Forget science, invest in bricks!

[zeppo] 08/10/2010 11:46

Interims 18th November.

Many employeees still being warned that their jobs are 'under threat'.
Many redundancies have already gone through.

I do not believe that all contract successes(or failures) are announced as they happen.

Que Sera Sera.

z

[wad collector] 28/9/2010 18:02

As you say.Wonder how much behind the scenes haggling is reducing the potential profits if St Athans stays.

[mw] 27/9/2010 10:49

Also see



- not quite as negative, but who knows?

[mryesyes] 15/8/2010 05:32

My point was not about redundancy payments to QQ staff, I went on a tangent about MOD staff. However am pleased to see our company is responsive to coalition thinking on this, and it shows QQ can see its umbilical being cut and that it can only pay low severance. BTW you talk as if people joining in 2001 joined like yesterday. I guess from this all but the kids have been on the QQ/MOD/Defra merrygoround for over 10 years.
There are no (new) profitable new contracts for QQ, the US work was not profitable it just used our resources. The MOD is our only client that can keep us going as we are in Hampshire.
Its easier to make redundancies and keep our pensions quiet, in an ideal world we would go back to those who made millions from the flotation that we all love and hate but they are already getting the pension, and badged up from service
New broom £1 is not the bottom IMHO, may even go under and Cameron buy back our facilities

[wad collector] 14/8/2010 22:21

Blimey ,this is dipping,what happened to all those big fat DTR contracts?

[pseudosphere] 14/8/2010 15:06

mryesyes

Your figures for redundancy payments from QinetiQ are way out of date. Following the results of a ballot of union members on 24/06/2010 the terms for redundancy starting from 01/07/2010 were slashed. The new figure, assuming an additional payment in lieu of notice (12 weeks), for the example you give of an ex-DERA member of staff with 15 years service, is £31250! For staff joining after 01/07/2001 the terms are even worse: 2 weeks pay per year of service + payment in lieu of notice. I can supply a breakdown of how the above figure was derived on request.

[mw] 13/8/2010 08:55

Chinese walls lead to chinese whispers......so they say.

Some years ago - I took the view that the UK business (essentially non-manufacturing) was one of managed decline, and that the way ahead would be to embrace overseas opportunities where there was adequate customer finance to more fully exploit technology.

The only UK growth area I could see was to extend into support activities, perhaps taking on board some of tasks done by the MoD. I didn't foresee the potential move into defence training - which I thought was a step too far out of the comfort zone.

I feel (it has to be said, in hindsight) too much money was taken out of QQ by the MoD (and others) during and after flotation, leaving the company little option but to take on debt to grow the business in time to meet the expected UK decline. A more sustainable transition might have allowed for organic growth of other business opportunities, but I suspect that the (then) management were not entirely masters of their own destiny.

It will be interesting to see the outcome of Liam Fox's root and branch defence review process, announced today. Who knows, there may be opportunities for the fleet of foot...

[pseudosphere] 12/8/2010 22:56

mw

The latest news on the BBC is certainly not helping the share price, although the effect is likely to be short term:



QinetiQ are not currently in a strong enough position financially to realistically contemplate the purchase of DSTL, probably the favoured option, even if the appropriate "Chinese Walls" could be put in place to satisfy government concerns.

The first of the key areas you mention for future growth prospects is US based, which is probably unfortunate for the UK workforce. I have often wondered about the relative performances of the UK and US operations and there is insufficient information in the annual reports to determine the true picture. As we know the non-UK business was largely purchased by means of debt financing. My concern is that the interest due on this debt may have been paid from QinetiQ group, rather than US only profits, which would tend to flatter the overseas operations, at the expense of the UK results. Greater transparency would be desirable to clarify such matters.

You are right that at some point buyers will return, or alternatively the company may be taken over. The issue is the price point at which this occurs and whether it is much lower than the share price at flotation! I would estimate a lower limit on the share price of approximately £1 but if this were to be breached then the consequences are unpredictable.

[mw] 12/8/2010 16:06

ps

Interesting you mention an old re-integration rumour. At the time I recall feeling that the loss of CDA was a mistake (from a completeness of suppport point of view). I also felt that DERA could have taken over some procurement activities directly from the (then) MOD(PE) - with cost and time savings. But there was a lot of suspicion around at the time - and there would no doubt have been conflicts of interest.
Meanwhile the share price plumbs new depths. At some point buyers will return, I've no doubt.

[zeppo] 11/8/2010 18:43

At the Farnborough Airshow BAe showed a big emphasis on developing security capabilities. The had a display which combined facial mapping with iris recognition.

QQ., I believe, are well into robotics through Talon etc. and airport security systems?

Perhaps others know more about QQ.s involvement in these areas.

z

[mw] 10/8/2010 19:38

Somehow, I feel (I hope) that when the dust has settled and the big cuts have been made in the procurement programmes (and organisations), those who aspire to future capabilities will place value on the smaller scale research and development programmes. The bigger defence contractors have many more hungry mouths to feed.
The key areas to watch may well be robotics and cyber security.

[pseudosphere] 10/8/2010 18:09

DSTL are also suffering in the downturn, according to some of those who jumped ship. There were rumours of the last government looking to see if the 2 organisations could somehow be reintegrated to save money but not sure how likely this now is.

[mw] 10/8/2010 17:48

... some of which were lost to DSTL

[pseudosphere] 10/8/2010 17:09

mw

Good point, you tend to forget all the amalgamations along the way and focus on your own area. The formation of DERA added DTEO,CBDE,CDA to those already in DRA.

[mw] 10/8/2010 16:04

PS,
Not only RSRE, but also ARE,RAE,RARDE,AAEE etc via DRA then DERA.

[pseudosphere] 09/8/2010 22:28

Selborne_Edge

You are mistaken regarding the 1990s if you judge the size of a government research organisation in proportion to the monetary value of the programmes it was then supporting. It is true that the management style started to change, for the worse, from this point onwards, when the organisation changed its name from RSRE to DRA. It is inevitable in the current economic climate that further shrinkage is likely to occur, as defence programmes are cut back but the extent is impossible to quantify, at the present time.

[selborne_edge] 09/8/2010 20:54

Sadly the 'downsizing' had to take place. As a government research organisation it was grossly over-staffed and with the forthcoming defence review, the process will continue. It started in the 1990s and has some way to go.