QinetiQ Group (QQ) H1 2027 earnings summary

Executive summary

• H1 revenue rose 3% to £923.2m; segment operating profit increased 14% to £109.7m, with an 11.9% margin.

• Order intake grew 9% to £771m; total backlog closed at £4.4bn, including U.S. unfunded orders.

• Agreed $292m sale of the U.S. business to Serco focuses the portfolio on the U.K., European NATO and allied markets; completion is expected in Q1 2027, subject to approval.

• FY27 guidance was confirmed, with increased shareholder returns planned after the sale completes.

Financial highlights

• Reported revenue was £923.2m, up 3%; underlying profit before tax rose 12% to £114.4m.

• Underlying basic EPS increased 18% to 16.8p; the interim dividend rose 33% to 4.0p per share.

• Operating cash flow was £113m; free cash flow was -£3.4m.

• Order intake increased 9% to £771m; funded backlog was £4.1bn and total backlog was £4.4bn.

Outlook and guidance

• FY27 guidance on the current reporting basis: revenue growth 3–5%, operating margin 11.0–11.5%, EPS growth 8–10% and cash conversion above 90%.

• Excluding the U.S. business, FY27 revenue growth is expected at 4–6%, with operating margin of 11.5–12%.

• FY27–FY29 free cash flow target is £550m; post-sale ROCE target is 25–30%.

• U.S. operations were tracking in line with full-year expectations; H2 growth is weighted to space development work.