Defence company QinetiQ found favour with investors today as chief executive Leo Quinn unveiled a plan to revamp the loss-making firm.
Shares in QinetiQ Group leapt 13% to 131.5p after the company announced plans to sell unprofitable divisions and re-organise its business into three units: US Services, UK Services and Global Products.
Shareholders welcomed the move, despite QinetiQ also suspending dividend payments for 12 months.
Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: "The shares seem to be getting the benefit of the doubt ... The company is looking to increase cashflow and reduce debt."
The firm said its full-year pre-tax profit plunged 34% to £85.7m, from £130.2m in the year-earlier period, because in delays in the award of government contracts. Sales remained stagnant at £1.6bn.
Markets have been difficult "while the UK and US governments develop policies to address their spending and deficit challenges have caused the group's performance over recent years to fall below its potential," the company said.
"Our markets are likely to remain uncertain for some time, but we now have a decisive programme of self-help to restore value," Quinn said in a statement.
The company also plans to cut debt, which stands at £457m, according to the company accounts.
