25th May 2022. 9.02am

Regency View:


Regency View:


Qinetiq prelims underline second half momentum

Last week, Qinetiq (QQ.) released their Preliminary Results for the year ended 31st March 2022…

The defence tech firm said it had made “good progress with strong second half momentum” and profits were “within our short-term guidance”.

Qinetiq’s provisional full year numbers looked solid with orders up 9% on an organic basis and revenue up 5% on an organic basis.

Underlying operating profit dipped to £137.4m versus £151.8m the year prior, but the group’s second half momentum looks set to continue into their next financial year.

Qinetiq CEO, Steve Wadey commented:

“Recent world events have reinforced the long-term needs of our customers, including capabilities utilising differentiated technology, test and training solutions which are directly aligned with our strategy”…

With a clear focus on disciplined execution of our strategy, increasing demand for our solutions and good revenue coverage, we have positive momentum and are on-track to deliver sustainable global growth.”

QQ. Daily Candle Chart

QQ. Daily Candle Chart

Vodafone shareholder e& will consider joint investments

We highlighted in last week’s BUY Vodafone (VOD) report that UAE telecom group Etisalat (e&) had become Vodafone’s largest shareholder (9.8%).

e& said on Friday that it will consider joint investments with Vodafone and is seeking to cooperate on procurement as well as research and development.

Etisalat CEO, Hatem Dowidar said he was confident in Vodafone’s strategy, including streamlining the business and consolidation in Europe.

“I believe that they are clear on what needs to be done and they’re trying to do it”…

“The channel will be open if there is an investment where us coming in as a partner makes sense for us,” Dowidar added.

Dowidar said e& bought the stake because it saw Vodafone as undervalued and dividend returns are higher than the cost of debt backing the deal, adding there are no plans to increase the holding “at the moment” and e& would remain a passive investor.

VOD Daily Candle Chart

VOD Daily Candle Chart

Sunak’s windfall tax report spooks energy firms

Our position in Centrica (CNA) took a bit of a hit this week after a news report that Chancellor Rishi Sunak had ordered plans be drawn up for a possible windfall tax…

The Treasury is seeking to raise cash to support households facing higher energy bills, the Financial Times reported on Monday. When asked for comment, the Treasury did not provide a specific response.

Shares of British power generators Drax, Centrica and SSE all lost ground on Monday – marking their worst day since the start of the pandemic.

Sunak has previously said that if energy companies did not reinvest profits earned from soaring oil and gas prices back into jobs, growth and energy security then no option was off the table when it comes to the possibility of windfall taxes.

In our view, the windfall tax is to be expected, but it does not change our stance that Centrica look well positioned to capitalise on a consolidating UK energy market.

CNA Daily Candle Chart

CNA Daily Candle Chart


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