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QinetiQ to Float on Stock Exchange

28 February 2005

UK technology consultancy QinetiQ is preparing to float on the London Stock Exchange for over 1 billion (GBP) later this year.

The research group, which spun off from the Defence Evaluation and Research Agency in 2003, would be the biggest floatation of a UK technology firm since the heady days of the dot-com era.

""Late 2005 is getting into the window for an initial public offering (IPO),"" QinetiQ's chief executive Sir Ian Chisholm told The Independent newspaper. ""But for this to happen there must be three things: the company needs to be doing well, the markets have to be receptive and the shareholders must be in the mood to sell.""

Last year, QinetiQ hired investment bank Morgan Stanley to assess the company's readiness for floatation on a stock market. The company was found to be in a fit state, notwithstanding some changes to its management needed to comply with the Combined Code on corporate governance.

While 80 precent of the group's work concerns top-secret defence operations, it also markets technologies it has developed for commercial use. This section of the business has performed ahead of expectations since its part privatisation, turning a 56.7 million GBP profit in the financial year ending 31 March 2004.

Capital raised in the float will be used to fund acquisitions, said Chisholm. The company acquired two American defence technology companies last year and, Chisholm explained, has further ambitions in the US market.

""The US remains a fast-growing market that has a great propensity to buy exactly what we have to offer,"" he said.

Many technologies developed by the agency in its previous incarnation have gone on to be widely used in the commercial sector, including carbon fibre and the liquid crystal display.

Other commercially viable technologies currently in development at the research body include a technique which enables mobile phone companies to share 3G transmission masts, which is not currently possible.





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