Presenting the company’s annual results June 7 — Qinetiq’s fiscal year ends March 31 — Chief Executive Graham Love said the September 2005 purchase of Verhaert Design and Development of Belgium has contributed more than expected to Qinetiq’s sales.
“We’ll continue to make the sorts of acquisitions we had made in the past,” Love said. In a Web cast to investors June 7, Love referred to the Verhaert purchase as “the first part [of our] European space strategy.” He declined to specify possible companies or technologies that Qinetiq was seeking to add to its space portfolio.
Europe’s space-hardware sector features dozens of small companies that have carved out a small business mainly on the strength of European government contracts, which by long-standing European rules must be spread throughout the territories contributing to the European Space Agency ().
But with flat European government space budgets, some of these companies — and also divisions of larger enterprises — are willing to sell. European satellite prime contractors have complained that while the bigger companies have merged from four to two in the last six years, the subcontractor population has not decreased. Qinetiq has said that Verhaert and future purchases will enable the company to occupy a middle ground between the small component makers and the prime contractors.
Qinetiq reported that its space division, which does not include the company’s satellite navigation business — GPS chipsets and European Galileo-related contracts — had revenues of 25.5 million British pounds ($47.2 million) for the year ending March 31 — a 42.5-percent increase over the previous year. Without the Verhaert purchase, the space division would have reported a 15.1-percent decrease in revenues due to a drop in British space research contracts compared to the previous year.
Qinetiq led a team of British companies in developing the small Topsat medium-resolution optical Earth observation satellite, which was successfully launched in October. The company also is under contract to ESA to develop ion engines for future use in Earth observation and science satellites.
The drop in British space spending was “more than offset by a strong initial contribution from the acquisition of Verhaert, which delivered 10.3 million pounds of revenue, Qinetiq said in its June 7 financial statements.
Qinetiq purchased a 90-percent stake in Verhaert in September 2005 for 4.1 million pounds in cash. Qinetiq in February completed an initial stock offering on the London Stock Exchange that raised net proceeds of 132.7 million pounds.