Qinetiq shares drop 10pc on ‘order unpredictability’

DEFENCE and tech group Qinetiq’s shares dived almost 10pc yesterday after it warned of an order slowdown.

In a trading update ahead of its annual meeting, the FTSE 250 business called the trading environment “dynamic” – especially in the UK after the snap election – with both “opportunities and challenges” that result in “near-term unpredictability of orders”.

Investors took fright at the news, with shares in the company, which runs services such as missile test ranges and the test pilot training school for the MOD, suffering their biggest drop in almost a year to 248.2p. Qinetiq shares have tracked steadily downwards since hitting an all-time high of 319.7p in May, and they fell another 26.2p yesterday.

The update said revenues for the Europe Middle East and Africa (EMEA) services business – which makes up almost 80pc of total sales – were “similar to a year ago” but cautioned that “orders have been slower than expected with some customer contract award decisions deferred or delayed”.

The smaller global business was in a similar position but Qinetiq said it expected overall revenue growth in the year. The sudden rise and fall of the shares around the release of the update has raised eyebrows, with some analysts describing it as an “over reaction”.