Qinetiq shares plunged by a fifth yesterday as contract delays by the UK and US governments resulted in a profit warning.
The defence tech company said it has been hit by ‘tough’ trading and ‘geopolitical uncertainty’ as it forecast annual revenue growth would slow to 2 per cent.
It is likely to mean an operating profit £30million lower than last year for QinetiQ, which specialises in high-tech areas such as robotics, laser and cyber.
The company also recorded one-off charges totalling £180million. Shares fell 20.7 per cent to 416.2p.
Shore Capital analyst Jamie Murray said the profit warning was a ‘direct consequence’ of the defence review in the UK and proposed defence cuts by the Trump administration in the US.
The update comes despite hopes that defence companies are in a good position to profit from the renewed focus on defence spending in Britain and Europe as fears deepen about Donald Trump’s commitment its allies.
High-tech: QinetiQ systems can be found on board the USS Gerald R. Ford. The defence tech company said it has been hit by ‘tough’ trading
But political uncertainties still hang over budgets in the UK, the US and Australia – QinetiQ’s main customers.
It has resulted in delays to the firm’s contracts understood to include robotics work in the US, the Thundercloud weather services used by UK military forces including the SAS, and engineering services in both countries.
Chief executive Steve Wadey told analysts it was ‘clearly disappointing’, but added: ‘We do see this as a short-term effect on the business.’