Qinetiq shares higher on rising security threats

LONDON (Reuters) - Shares in British defence technology company Qinetiq (QQ.L) rose on Thursday as it reported flat first-half profits, announced a share buyback and dividend rise, and highlighted how its products could help governments counter rising security threats.

Saying it was on track to meet annual forecasts, Qinetiq announced a 50 million pound share buyback over the next year and increased its interim dividend by 6 percent.

Shares in Qinetiq gained 11.7 percent to 263 pence, hitting an all-time high and making the company the top riser on Britain's mid-cap index.

Qinetiq Chief Executive Steve Wadey said the attacks in Paris on Friday which left 129 people dead illustrated a growing threat to which governments would look to respond.

"It's going to be important in the years to come to work out how our businesses focus on supporting our governments to deal with those threats," Wadey said in an interview.

"The company does have core competencies in that domain and we'll need to work out how we can apply those to support our customers."

A spokesman for the company told Reuters Qinetiq had not been in talks with the French government to provide additional protective measures after the Paris attacks, denying earlier media reports.

After several negative statements from other defence companies such as Cobham (COB.L) in recent weeks, analysts said that Qinetiq's on track update was reassuring.

"People like the idea of buying defence stocks at the moment," Haitong analyst Edward Stacey said.

"No magic has happened today. The company's been over-looked by investors and it's getting a deserved catch-up."

(Reporting by Sarah Young, editing by David Evans)