QinetiQ INTERIM MANAGEMENT STATEMENT

30 Jul 08. QinetiQ Group plc (‘QinetiQ’), the international defence and security technology company, is today issuing the following Interim Management Statement which covers the period from 1 April 2008 to 29 July 2008. This coincideD with its Annual General Meeting

At the meeting the Chairman of QinetiQ, Sir John Chisholm, made the following statement:

Trading and financial position

The year has commenced well and the trading outlook remains in line with that described in the Group’s preliminary results announcement on 28 May 2008.

QinetiQ North America (QNA)

QNA has seen continued strong activity levels across its business and a recent reorganisation of the IT Services division across the Systems Engineering and Mission Solutions divisions positions us well to build on core strengths in these important markets. In the Technology Solutions Group Talon shipment levels remain strong and we have now delivered over 2,000 units to the US Department of Defense. The Mission Solutions division continues to increase the level of work it undertakes with NASA and recently won a $225m, nine year contract to support information management and communications activities at Kennedy Space Center. In addition it was awarded a $90m, three-year contract to provide ongoing launch support services across a variety of NASA sites.

Europe, Middle East and Australasia (EMEA)

The year has started satisfactorily and the outlook for the full year remains in line with the Board’s expectations. In the UK we continue to successfully provide MOD with value for money offerings such as the £24m, ten year award to provide through-life support to sustain the Harrier aircraft programme through the remainder of its service life.

Unmanned vehicles continue to be a key area of focus. This was evidenced in the period with EMEA being closely involved in the UK’s Mantis airborne Unmanned Autonomous System programme and the US Defense Advanced Research Projects Agency’s (DARPA) Vulture air vehicle programme which will create a new category of ultra-long-endurance aircraft utilising expertise developed from our highly successful Zephyr programme.

EMEA’s expansion into international and adjacent markets continues to make good progress. The recently acquired

Australian businesses have been integrated and are making a positive contribution to the Group. We have now recruited a new CEO, Mike Kalms, to lead this business going forward. Mike has extensive experience in the Australian defence industry.

The previously announced portfolio review of EMEA to identify any non-core activities is nearing completion. This may lead to further strategic partnering, IP licensing, new venture creation or exit from certain non-core activities.

Ventures

The Ventures businesses comprising both the retained ventures and those in our venture fund with Coller Capital are making satisfactory operational progress. In June 2008 the official launch of the Tarsier system installed at London’s Heathrow airport received widespread national media and industry coverage for this important runway monitoring system.

Financial position

The balance sheet remains strong and there have been no significant changes in the financial position of the Group since that reported as at 31 March 2008.

Outlook

The Board remains confident about the outlook for the Group in the coming year.