Qinetiq profits fall on lower miitary spend

The FTSE 250 company, which supplies military robots and vehicle armour systems, reported pre-tax profits for the year of £119.4m in the 12 months to March 31, down from £152.1m. Revenues also slipped for the year to £1.19bn, down from £1.3bn.

Leo Quinn, chief executive, said: "Four years ago, QinetiQ faced significant challenges. Our response has been to build a stronger Group from the ground up: leaner, debt-free and focused on those capabilities most needed by our customers following the recent reset in defence budgets."

Mr Quinn said the sale had been a "key milestone in the company's transformation".

The sale has resulted in a non-cash goodwill impairment of £84m in tday's results, but the companny said the full impact of the disposal and associated transactions would be fully accounted in the financial results for the year ending 31 March 2015.

The sale to US engineering group, The SI Organization, would allow QinetiQ to focus on its core British defence and products business and on expanding in cybersecurity.

The division, which accounted for 36pc of QinetiQ's sales in its 2012/13 financial year, was first out up as a possible sale last May after it became one of many firms hurt by cuts to the US defence budget, which saw QinetiQ write down £256m of the arm's value.

Under the conditional agreement, QinetiQ will sell the unit for an initial cash sum of $165m, which could increase by $50m depending on the division's gross profit over the year to March 2015.

Mr Quinn joined Qinetiq in 2010, following two profits warnings, with a mission to lower the company's debt and turn it around.

But n today's results the company said it hiking its full-year dividend by 21pc, reflecting confidence that its strategy of attracting new commercial customers was gaining traction.

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