(Bloomberg) -- U.K. defense contractor QinetiQ Group Plc became the latest company buffeted by supply chain troubles, warning that issues on a large complex program could force it to write down its short-term guidance.
QinetiQ shares fell as much as 11% in early London trading, the biggest intraday drop in seven years.
The company said in a trading update that it was grappling with technical and delivery issues on the program, and was working with the customer -- which it didn’t identify -- to mitigate the risk to less than 15 million pounds ($20.5 million).
QinetiQ also flagged Covid 19-related delivery and supply chain challenges in the U.S., with the expectation that its underlying operating profit margin for the year would come in at the lower end of its expected range, prior to any writedown.
The London-based company, which grew out of a research arm of the U.K. government, operates in a range of areas, from cybersecurity to making robots used to disarm bombs.
It is currently maintaining medium to long-term guidance on organic revenue growth, though anticipates margins being lower in the near-term, due to both rising investment on its digital transformation program, and “by the evolution of our business mix.”
Supply chain issues are snarling up businesses across the globe, with U.S. President Joe Biden on Wednesday setting out plans to accelerate efforts to facilitate the flow of goods through the economy.
On Wednesday, he announced that the Port of Los Angeles would start operating 24 hours a day and 7 days a week, with retailers committing to stepping up efforts to move goods. Companies including FedEx Corp and United Parcel Services Inc have pledged to expand their delivery schedules.
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