QinetiQ agrees to sell US business to Serco for $292 million

QinetiQ Group plc announced the sale of its US business to Serco for $292 million and reported first-half results that exceeded analyst expectations for the fiscal year 2027.

The defense technology company will return £200 million in proceeds to shareholders by adding £100 million to its existing share buyback programs for fiscal years 2028 and 2029. The sale resulted in a £175 million non-cash impairment charge.

For the first half of fiscal 2027, revenue reached £923 million, up 3% year-over-year. Operating profit on a pre-RDEC basis came to £110 million, an increase of 14% from the prior year. The operating margin stood at 11.9%, up 120 basis points year-over-year.

Net debt was £274 million, translating to leverage of 0.8 times, with cash conversion at 64%. Order intake totaled £771 million, representing 9% year-over-year growth.

The EMEA Services division posted revenue of £738.1 million, up 4% on a constant currency basis. Operating profit for the segment was £92.2 million with margins of 12.5%, up 100 basis points year-over-year. Order intake was £488 million, up 6% year-over-year, with a book-to-bill ratio of 0.8 times.

Global Solutions revenue came in at £185.1 million, down 4% year-over-year. Operating profit was £17.5 million with margins of 9.5%, up 210 basis points year-over-year. Order intake increased 14% with a book-to-bill ratio of 1.5 times.

The company confirmed its fiscal 2027 guidance, projecting revenue growth of 3% to 5%, an EBITA margin of 11.0% to 11.5%, earnings per share growth of 8% to 10%, and cash conversion above 90%.