QinetiQ sells US business for $292 million and expects to return £200 million to shareholders
Key Facts
QinetiQ agreed to sell the entire issued share capital of its US subsidiary, QinetiQ Inc., to Serco for $292 million in cash, the company said on 12 November 2026. The consideration is subject to customary completion adjustments, on a cash-free, debt-free basis. Sharecast reported that QinetiQ shares rose nearly 5% in early trading on Thursday, following the sale announcement and first-half results. The company said the deal is part of its focus on directing resources toward the UK, Europe and NATO allies. It plans to return £200 million of the proceeds to shareholders by increasing share buybacks in FY28 and FY29.
Under the plan, QinetiQ will increase its scheduled share buyback programmes for FY28 and FY29 by £100 million a year. The group said its renewed geographic focus reflects growth and return opportunities it considers more attractive in the UK, Europe and NATO ally markets. It added that it would increase organic investment in digital technology, artificial intelligence, infrastructure and employees. The company announced a review of its US business and the options available to enhance returns in May 2026. After assessing the relevant options, it said the agreed sale was the best route to deliver value for stakeholders.
QinetiQ Inc. generated revenue of $172 million and underlying operating profit of $13 million in the six months ended 30 September 2026. The carrying value of the US business on the group’s balance sheet was £393 million on 31 March 2026. In connection with the deal, QinetiQ recognised a non-cash impairment charge of about £175 million related to the US business in its FY27 first-half results. This means the period’s statutory results were affected by a write-down of the business, while the group continued to deliver growth in underlying operating performance measures. FY27 guidance assumes revenue of $385 million for the US business, at a margin of about 7%.
At group level, first-half FY27 revenue rose 3% to £923 million, compared with £900 million in the corresponding period. Underlying operating profit increased 14% to £110 million, from £96 million, while new orders rose 9% to £771 million, against £707 million. Statutory results, however, recorded an operating loss of £79 million, after a profit of £64 million in the first half of FY26. Statutory underlying earnings per share turned into a loss of 21.6 pence, compared with a profit of 7.1 pence in the corresponding period. The funded order book was £4.124 billion, down 5% from £4.345 billion a year earlier.
QinetiQ reaffirmed its FY27 guidance on a current reporting basis, targeting revenue growth of between 3% and 5% and an operating margin of between 11.0% and 11.5%. It also expects earnings-per-share growth of between 8% and 10% and cash conversion of more than 90%. Net debt was £274 million in the first half of FY27, compared with £181 million in the corresponding period, with leverage at 0.8 times. The group is targeting more than £550 million in free cash flow during FY27–FY29. It also declared an interim dividend of 4.0 pence per share for the half year ended 30 September 2026, payable on 5 February 2027 to shareholders registered on 8 January 2027.
The deal remains subject to customary regulatory approvals, including US antitrust and foreign investment approvals, as well as arrangements for classified activities. QinetiQ expects the sale to complete in the first quarter of 2027. The cash consideration and plan to return part of the proceeds to shareholders are therefore contingent on completing these processes. In early trading on the announcement day, the shares rose nearly 5%, according to Sharecast. The 11 November close, before the sale announcement was published, was 523.00 pence, down 12.00 pence or 2.24%, according to the company’s investor relations page.