QinetiQ confirmed on Thursday that it is assessing every option for its struggling U.S. business while simultaneously raising its guidance for the 2027 financial year. The announcement prompted investor optimism, with the British defence services contractor's shares climbing as much as 11% to roughly after the update - the largest one-day gain on the STOXX 600 index.
Headquartered in Hampshire, the company provides testing, training and engineering services. It has been pursuing a programme of restructuring, trimming costs and simplifying its portfolio, with particular attention on its U.S. operations.
Analysts at Jefferies said that exiting the U.S. business - regarded by some as lower quality and more volatile - would, despite potential short-term pain relative to the price paid for it, leave QinetiQ as a higher-quality enterprise with a clearer strategy. QinetiQ's U.S. unit delivers capabilities such as advanced sensing, surveillance, cyber and intelligence, and accounted for 15% of group revenue in the year ended March 31.
Management attributed continued difficulties in the U.S. defence services market to several pressures. In its statement, the firm pointed to budgetary constraints, a customer shift in spending toward platform and hardware programmes, and slower awards of contracts as factors that made the market challenging during the year.
Guidance and financials
For fiscal 2027 QinetiQ now expects revenue growth in the range of 3%-5% and an operating margin between 11% and 11.5%. That is an upgrade from the group's January outlook, which anticipated roughly 3% organic growth and an 11% operating margin.
The company reported a strong commercial performance in 2026, with order intake rising 83% to