UK DIP provides opportunities and should ease delays; Execution still key

Research evidence excerpt

UK DIP provides opportunities and should ease delays; Execution still key

Deutsche Bank Group

Deutsche Numis Research

Rating Company Date

Buy QinetiQ Group 1 July 2026

Company Update

Europe

United Kingdom

Reuters Bloomberg Exchange Ticker Price at 30 Jun 2026 (GBP) 422.40

QQ.L QQ/ LN LSE QQ

Price Target 600.00

Aerospace & Defence

Aerospace & Defence ADR ISIN 52-week range 549.50406.00-

QNTQY US74732F1066

UK DIP provides opportunities and

Valuation & Risks should ease delays; Execution still key

Richard Paige

Few surprises Research Analyst

After much delay, the DIP was finally published yesterday. From an overall +44-20-7545-4606

perspective, there are few surprises, given that this is the funding and

Thomas Elgar, CFA

implementation plan for the Strategic Defence Review (SDR), published last year, Research Analyst

and has also been well trailed in the press recently. The headline is confirmation of +44-20-7541-1556

the c. £15bn increase in defence funding over the next four years, reportedly c.

£1.5bn above the figure under discussion before John Healey resigned as Defence Price/price relative

Secretary earlier this month. This would take annual defence spending from £54bn 600

to £79.1bn by 2029, or 2.7% of GDP. That still implies a funding gap of roughly £13bn

versus the c. £28bn four-year requirement reportedly identified by defence officials, 400

although publication of the DIP should reduce the recent uncertainty that has been

holding back spending decisions. It also implies a 6.2% CAGR, with total spending 200

2024 2025 2026

plans in the document suggesting greater front-loading than we had expected.

QinetiQ Group – (Rebased)

Key allocations over the next four years include more than £63bn for the nuclear Performance (%) 1m 3m 12m