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06 Mar 06. BlackSky Reports Fourth Quarter and Full Year 2024 Results
First Very-High Resolution Gen-3 Satellite Delivering Imagery Five Days from Launch.
Company Secures Over $150m in Recent Contract Awards
2025 Total Revenue Forecasted to Grow 30% Over 2024
BlackSky Technology Inc. (“BlackSky” or the “Company”) (NYSE: BKSY) announced the successful Gen-3 launch and imaging performance along with results for the fourth quarter and full year ended December 31, 2024.
“I’m happy to report that within 5 days of launch our new Gen-3 satellite is already exceeding customer expectations for initial very-high resolution image quality,” said Brian E. O’Toole, BlackSky CEO. “The addition of very-high resolution imagery to our high-frequency monitoring constellation enables us to deliver AI-derived insights at the speed of conflict, providing our customers with advanced space-based intelligence solutions. Building on this significant milestone, we are now set to begin a regular cadence of Gen-3 satellite launches to expand our capabilities. With early Gen-3 success and a number of significant recent contract wins, we’re off to a strong start to 2025.”
Full Year Financial Highlights:
* Revenue of $102.1m
* Imagery & software analytical services revenue grew to $70.1m
* Imagery & software analytical service cost of sales(1), as a percentage of revenue, improved to 20%
* Net loss(2) of $57.0m
* Adjusted EBITDA(3) improved to $11.6 m compared to an Adjusted EBITDA loss of $1.0m in the prior year
(1) Cost of sales is defined as imagery and software analytical services costs and professional and engineering services cost, less depreciation and amortization expense.
(2) This represents our current estimate of net loss for the period ended December 31, 2024, which is subject to the completion of our financial closing procedures and adjustments that may result from the completion of the audit of our consolidated financial statements. As a result, this net loss estimate may differ from the actual net loss reported in our consolidated financial statements when they are completed and publicly disclosed in our Annual Report on Form 10-K.
(3) Non-GAAP financial measure. See “Non-GAAP Financial Measures” below and reconciliation table at the end of this press release.
Recent Highlights
* Successfully launched first Gen-3 satellite and began delivering imagery that is exceeding customer expectations for initial image quality five days after launch
* The National Reconnaissance Office extended its subscription for Gen-2 imagery services under the Electro-Optical Commercial Layer program into 2026
* Awarded a more than $100m seven-year subscription contract with an existing international customer for Gen-2 and Gen-3 satellite imagery
* Won multi-year contracts totaling approximately $20m to support India’s commercial earth observation capabilities, including imagery services and a dedicated space asset
* Awarded a multi-year contract valued up to $200m with the National Geospatial-Intelligence Agency under the Luno B program to provide mission-critical data and analytic services
* Won a multi-m-dollar expansion contract with the Defense Innovation Unit to demonstrate space-based tactical ISR capabilities and provide on orbit operations under the TACGEO program
* Awarded a six-figure contract with a new strategic international customer to provide on-demand Gen-2 imagery, analytic services, and training on BlackSky’s Spectra tasking and analytics platform
* Won a multi-year subscription contract with EMDYN, a geospatial intelligence fusion company, to deliver space-based imagery services to international customers
* Recent 2025 contract awards increases the December 31, 2024 backlog of $261m to approximately $390m
Financial Results
Revenues
Total revenue for the fourth quarter of 2024 was $30.4m, down $5.1m, or 14%, from the fourth quarter of 2023, which included a $7m one-time benefit under the Company’s Indonesian contract. Imagery and software analytical services revenue was $17.5m in the fourth quarter of 2024, down $1.6m from the prior year period primarily due to the upfront delivery of $2m of imagery orders for a project received in the fourth quarter of 2023. Professional and engineering services revenue was $12.9m in the fourth quarter of 2024, compared to $16.5m in the prior year period, which included approximately $7m for progress to date activities on capabilities to be delivered under the Indonesian contract. Professional and engineering services contracts are milestone-based contracts that may have quarter-over-quarter revenue variability, in contrast to the imagery and software analytical services, which are typically recurring subscription-based revenues.
For the full year 2024, total revenue was $102.1m, up $7.6m, or 8%, from 2023. Imagery and software analytical services revenue was $70.1m, up $4.7m, or 7% over the prior year.
Cost of Sales(1)
Total cost of sales as a percentage of revenue improved to 23% for the fourth quarter of 2024, compared to 34% in the fourth quarter of 2023.
For the full year 2024, cost of sales as a percentage of revenue improved to 27%, compared to 36% in 2023.
Operating Expenses
Operating expenses for the fourth quarter of 2024 were $29.6m, which included $2.8m of non-cash stock-based compensation expense and $10.0m in depreciation and amortization expenses. Operating expenses for the fourth quarter of 2023 were $28.1 m, which included $3.0m in non-cash stock-based compensation expense and $10.7m in depreciation and amortization expenses. Excluding the non-cash stock-based compensation and depreciation and amortization expenses from both years, cash operating expenses(3) for the fourth quarter of 2024 were $16.9m, compared to cash operating expenses of $14.5m for the fourth quarter of 2023. The year-over-year increase of $2.4m was primarily due to investments in the business, including bringing satellite production capabilities in-house.
For the full year 2024, operating expenses were $119.0m, which included $10.5m of non-cash stock-based compensation expense and $43.5m in depreciation and amortization expenses. For the full year 2023, operating expenses were $116.7m, which included $10.1m of non-cash stock-based compensation expense and $43.4m in depreciation and amortization expenses. Excluding the non-cash stock-based compensation and depreciation and amortization expenses from both years, cash operating expenses in 2024 were $64.9m, compared to cash operating expenses of $63.1m in 2023.
Net Loss(2)
Net loss for the fourth quarter of 2024 was $19.2m, compared to a net loss of $3.8m in the fourth quarter of 2023. The year-over-year increase in net loss of $15.4m was primarily due to changes in the (loss)/gain on derivatives, which are driven by fluctuations in the Company’s equity warrants and other equity instruments that are measured at fair value and driven by the Company’s common stock price.
For the full year 2024, net loss was $57.0m, compared to $53.9m in 2023.
Adjusted EBITDA(3)
Adjusted EBITDA for the fourth quarter of 2024 was $7.4m, compared to an adjusted EBITDA of $9.3m in the fourth quarter of 2023, which included $6.5 m of specific project-based revenue and operating expense savings. Excluding the one-time benefit in the fourth quarter of 2023, adjusted EBITDA improved $4.6 m year-over-year primarily driven by strong operating leverage achieved through higher revenues and improved gross margins.
For the full year 2024, Adjusted EBITDA was $11.6m, compared to an Adjusted EBITDA loss of $1.0m in 2023, delivering a $12.7m year-over-year improvement.
Balance Sheet & Capital Expenditures
As of December 31, 2024, cash and cash equivalents, restricted cash, and short-term investments totaled $53.8m. The Company also anticipates receiving approximately $27.9m in payments over the next 12 months as interim milestones on a few major customer contracts are met and expected to be billed. In addition, the Company received a $32 m cash prepayment in the first quarter of 2025 for work related to a recent contract win, further enhancing the Company’s liquidity. Capital expenditures for the fourth quarter of 2024 were $9.5m and for the full year 2024 totaled $50.2m.
2025 Outlook
BlackSky expects full year 2025 revenue to be between $125m and $142m, and full year 2025 adjusted EBITDA to be between $14m and $22m. In addition, the Company anticipates full year 2025 capital expenditures to be between $60 m and $70m, primarily driven by investments in the production and deployment of Gen-3 satellites. (Source: BUSINESS WIRE)
06 Mar 25. Top pension funds refuse to back defence industry. Some of Britain’s biggest pension firms have been accused of blocking Britain’s plans to boost defence in the wake of the Ukraine war. Aviva, Royal London and the National Employment Savings Trust (Nest) are among a group of pension giants that restrict or block investment in the defence industry on “ethical” grounds. The companies, which provide pensions to millions of Britons, say the restrictions apply to select funds and offer customers choice. However, the fact that defence is excluded on claimed ethical grounds has alarmed ministers and is likely to provoke anger among some customers. Rachel Reeves, the Chancellor, is understood to agree that investment in the British defence sector is ethical. She is working on plans to make it easier for investors to see if environmental, social and governance (ESG) funds exclude military spending. A Treasury spokesman said on Thursday night: “If opaque ESG ratings are blocking vital private investment to our defence sector, this has to change.” The spokesman did not refer to any specific companies, but ministers are understood to have concerns about the industry as a whole.
Sir Keir Starmer last week announced plans to increase government defence spending to 2.5pc of GDP to guard against “tyrants like Putin” in a move that it is hoped will boost both national security and growth.
The Prime Minister said: “The realities of our dangerous new era mean that the defence and national security of our country must always come first.”
The Government responded to a consultation on ESG ratings last year and indicated it would bring them within the scope of the Financial Conduct Authority (FCA), giving the City watchdog greater powers to regulate the sector.
Treasury sources told The Telegraph that the Government would lay secondary legislation later this year to enact that change. The Government hopes that by making ESG ratings more transparent, pension funds will be pushed by investors to add defence industry holdings to their portfolios.
Lord Dannatt, the former head of the British Army, said: “In the current climate, the principle [that defence companies are unethical] does not make sense.
“We don’t live in a perfect world and states have got to stand up for themselves and they need weapons and trained military to be able to do that. That’s the ethical argument.”
Lord Heseltine, the former defence minister, said excluding defence investments on ESG grounds was “ill-judged” and “does not reflect the interests of their pensioners”.
He said: “Defence is an ethical issue. It can be used, like vast numbers of human capabilities, in a bad way. But the idea that we should not see the moral responsibility of protecting the living standards and the freedoms of our society is unthinkable.”
Fred Thomas, Labour MP, said: “A stronger defence industry means a stronger economy, more jobs, and a safer Britain. If the Government is serious about creating growth, fixing defence must be part of the plan.”
Many pension funds either fully or partially block investment in arms companies based on rigid ESG rules. These rules exclude investment in polluting industries such as oil and gas, and companies deemed to damage society by, for example, treating workers poorly.
Around £17bn is invested in ESG funds in Britain. These ethical funds boomed in popularity after Covid with nearly 3,000 launched between 2020 and 2023 globally, attracting $600bn of investment. (Source: Daily Telegraph)
06 Mar 25. BigBear.ai Announces Fourth Quarter, And Full Year 2024 Results, And Provides 2025 Outlook
* 4Q 24 revenue of $43.8m (4Q 23 $40.6m) +8% year-over-year
* Exchanged $182.3m in 6.00% convertible senior notes due in 2026 for 6.00% convertible senior secured notes due in 2029; $58m has already converted into equity since the end of 4Q 24 resulting in $142.3m remaining debt on convertible notes.
* Cash balance of $50.1m, as of December 31, 2024; During 1Q 25, received gross proceeds of $64.7m of cash, following the exercise of previously issued warrants; combined with $58m of conversions on convertible debt, net debt1 has decreased from $150m to $27m and debt-to-cash ratio2 has decreased from 4.0 to 1.2 since the end of 4Q 24.
* 2025 Outlook provided between $160m – $180m revenue, and negative single digit Adjusted EBITDA*
BigBear.ai Holdings, Inc. (NYSE: BBAI) (“BigBear.ai” or the “Company”), a leader in AI-powered decision intelligence solutions, today announced financial results for the fourth quarter of 2024 and issued an investor presentation that has been posted to the Investor Relations section of the Company’s website.
“2024 was a pivotal year for the business. We demonstrated momentum through major contract wins, expanding our backlog and growing our pipeline, maturing our technology portfolio, and restructuring our debt to strengthen our financial position for the long term. These efforts were driven by strong execution from our team,” said Kevin McAleenan, Chief Executive Officer, BigBear.ai.
“On the financial front, we’ve kicked off the first quarter of 2025 by significantly deleveraging our balance sheet. Through a combination of cash proceeds from warrant exercises and debt reductions resulting from conversions on our convertible notes, we’re in a strong position for growth in 2025 and beyond,” said Julie Peffer, Chief Financial Officer, BigBear.ai.
Financial Highlights
* Revenue increased 8% to $43.8m for the fourth quarter of 2024, compared to $40.6 m for the fourth quarter of 2023 primarily due to additional revenue related to Department of Homeland Security and Digital Identity awards.
* Gross margin was 37.4% in the fourth quarter of 2024 as compared to 32.1% in the fourth quarter of 2023, primarily driven by year-end fringe and overhead true-up allocation adjustments in 4Q 24 of $2.7m with an offsetting increase in SG&A expenses.
* Primarily driven by the non-cash changes in fair value of $93.3m from derivative liabilities related to the 2029 convertible notes and warrants, net loss in the fourth quarter of 2024 was $108.0 m, compared to $21.3 m for the fourth quarter of 2023.
* Non-GAAP Adjusted EBITDA* of $2.0m for the fourth quarter of 2024 compared to $3.7m for the fourth quarter of 2023, primarily driven by increased Recurring SG&A*.
* SG&A of $22.2m for the fourth quarter of 2024 compared to $18.2m for the fourth quarter of 2023 and Recurring SG&A* of $18.0m in the fourth quarter of 2024 compared to $12.3m in the fourth quarter of 2023. The year-over-year increases include Pangiam’s headcount and operating expenses not included in the fourth quarter of 2023 as well as year-end fringe and overhead true-up allocation adjustments of $2.7m in the fourth quarter of 2024 which are offset in improved gross profit.
* Ending backlog was $418m as of December 31, 2024, an increase of $250m or 2.5x ending backlog as of December 31, 2023.
* The consolidated year-to-date results include results from Pangiam from the acquisition date of February 29, 2024 to December 31, 2024.
Financial Outlook
For the year-ended December 31, 2025, the Company projects:
* Revenue between $160m and $180m
* Adjusted EBITDA* — negative single digit millions
In the event that some form of US Government shutdown was to take place in 2025, or a substantial shift in government national security priorities, BigBear.ai would review its guidance as part of prudent financial planning and its efforts to build a long-term sustainable business.
The above information on Outlook, and other sections of this release contain forward-looking statements, which are based on the Company’s current expectations. Actual results may differ materially from those projected. It is the Company’s practice not to incorporate adjustments into its financial outlook for proposed acquisitions, divestitures, changes in law, or new accounting standards until such items have been consummated, enacted, or adopted, as the case may be. For additional factors that may impact the Company’s actual results, refer to the “Forward-Looking Statements” section in this release. (Source: BUSINESS WIRE)
06 Mar 25. Investors are piling into defence stocks as geopolitical tensions and the sector’s strong fundamentals boost performance, new data* from GraniteShares the global issuer of Exchange Traded Products (ETPs) with more than $9bn under management, shows. Total AUM in GraniteShares 3x Long Rolls-Royce Daily ETP (3LRR) and 3x Long BAE Daily ETP (3LBA) increased during February to nearly £80m from £44m and trading activity surged as investors reacted to Government plans to boost defence spending and the performance of the two companies. The 3x Long Rolls-Royce Daily ETP (3LRR) achieved returns of 78.09% and 3x Long BAE Daily ETP (3LBA) delivered 40.36% last month. Rolls-Royce’s defence division secured a major win with the £9 bn Unity contract from the UK Ministry of Defence, reinforcing its role in key programmes such as the Typhoon jet engines and nuclear submarine reactors. Rolls-Royce is seeing strong performance in its civil aerospace market.
Manuj Sarpal, Chief Technology Officer at GraniteShares, said: “Growing geopolitical tensions and uncertainty around the Trump administration’s NATO stance have driven European nations to boost defence spending, benefiting firms like Rolls-Royce and BAE Systems.
“Investor confidence in the defence sector is evident but beyond defence, Rolls-Royce is capitalizing on a recovering civil aerospace market, with large engine flying hours surpassing pre-pandemic levels at 102% by late 2024. Given the strong fundamentals and shifting geopolitical landscape, there could be further increases in investment in the defence sector in coming days.”
GraniteShares offers a range of exchange traded products (ETPs) listed on national exchanges in the UK, Italy, and Germany. They consist of a suite of Short and Leveraged Single Stock Daily ETPs tracking some of the most popular companies in UK, US and European markets.
GraniteShares: A brief history
GraniteShares is an entrepreneurial ETP provider focused on providing professional investors with innovative, cutting-edge investment solutions. We believe the future of investing lies at the nexus of alternative thinking, low fees, and disruptive product structures—the core of our high conviction philosophy. Backed by Bain Capital Ventures, we launched our first product in 2017 and are now among the fastest growing ETP issuers with over $9bn in assets under management, as of 19th December 2024 spanning a full array of investment strategies.
Investing in GraniteShares ETPs on U.S. listed stocks
Those trading GraniteShares new US leverage and inverse ETPs will not need to complete a W-8BEN form (US Department of the Treasury, Internal Revenue Service, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting).
There is no margin requirement and losses cannot exceed the amount invested.
05 Mar 25. Pension savings to be spent on rearming Britain in defence push. City leaders are working with ministers to funnel retirement funds into the arms industry. British pension savings will be used to bolster defence under City plans being drawn up to funnel billions towards rearmament. Pension funds are in talks about committing more money towards military spending by rewriting a voluntary code signed by the biggest retirement providers in 2023. The Mansion House Compact was drawn up to encourage pension funds to invest more into growth industries to boost Britain’s economy. It could now be rewritten to include “national resilience” among its core aims, unlocking billions for defence. It comes after Sir Keir Starmer raised Government defence spending to 2.5pc of GDP and pledged to hit 3pc in the next decade. Britain and Europe have rushed to outline plans to rearm after America’s dramatic diplomatic shift towards Russia, which has raised fears that America will no longer guarantee the Continent’s safety under Donald Trump’s presidency. Sources said the Mansion House initiative could be spearheaded by the City of London Corporation, the body which represents the Square Mile. Discussions are at an early stage, with an update expected at the annual Mansion House Dinner in July alongside the Chancellor. (Source: Daily Telegraph)
05 Mar 25. Defense tech startup Epirus secures $250m to make anti-drone weapons. Defense technology startup Epirus has raised $250m in a Series D funding round, as it looks to scale up production of its anti-drone weapons, the company said on Wednesday. Epirus did not disclose its valuation for this round. The company was previously valued at $1.35bn when it raised $200m in Series C funding. The cash infusion comes at a time when defense contractors are straining to meet the surge of demand for weapons following Russia’s invasion of Ukraine about three years ago. Epirus won a $66m contract in 2023 to supply its flagship product Leonidas to the U.S. Army. Torrance, California-based Epirus is among several aerospace companies that develop weapons which can destroy unmanned aerial vehicles using lasers or microwaves. The round, which was oversubscribed, was co-led by venture capital firm 8VC and Washington Harbour Partners LP, a D.C.-based investment firm. U.S. defense giant General Dynamics’ (GD.N) manufacturing unit, General Dynamics Land Systems, also participated. The latest round, which was oversubscribed, brought Epirus’ total funding to over $550m. (Source: Reuters)
05 Mar 25. UK finance, defence trade bodies explore funding blueprint for arms race.
* Lobby groups outline potential solutions to financing snags
* UK government pledges to up defence spending to 2.5% of GDP
* Defence shares have been rising, lenders face compliance burden
Top trade bodies for Britain’s financial services and defence industries met on Wednesday to craft a wishlist of policy reforms they say could drive more debt finance and equity capital towards Britain’s defence sector, sources said.
TheCityUK, UK Finance and defence industry peer ADS Group convened as European governments unveil rearmament plans driven by Russia’s war in Ukraine and fears that Europe can no longer be sure of U.S. protection. British Prime Minister Keir Starmer pledged last week to increase annual defence spending from 2.3% to 2.5% of GDP by 2027 and to target 3% – a level last seen just after the Cold War. On Tuesday, German lawmakers proposed a landmark overhaul of borrowing rules to fund its military and the European Commission said it could borrow up to 150 bn euros to lend to EU governments eyeing similar goals. TheCityUK and UK Finance between them represent some of Britain’s largest finance firms, including HSBC Barclays and Legal & General (LGEN.L), opens new tab. ADS’s membership includes defence giant BAE Systems. (Source: Reuters)
06 Mar 25. Melrose Industries PLC (“Melrose”, the “Company” or the “Group”), the aerospace technology group, today announces its audited results for the year ended 31 December 2024.
- Strong 2024 performance with profit at the top end of expectations despite industry-wide supply chain issues
- Guidance for 2025 confirmed with continued profit growth, completion of transformational restructuring and substantial positive free cash flow1
- New five-year targets launched, with high single digit (“HSD”) revenue CAGR to c.£5 bn, adjusted operating profit1 of £1.2bn+ and free cash flow1 (after interest and tax) of £600m
- Targets deliver >20% adjusted diluted EPS1 CAGR from 2024 to 2029, with free cash flow1 set to more than quadruple from 2025 to 2029.
Peter Dilnot, Chief Executive Officer of Melrose Industries PLC, today said: “Melrose delivered a strong 2024 performance driven by robust industry demand, ongoing aftermarket growth and the impact of extensive business improvement actions. This was achieved against the backdrop of ongoing industry-wide supply chain issues. We are well positioned for further progress in 2025, including the expected delivery of substantial free cash flow, despite ongoing industry challenges. We are also excited to launch our five-year targets that include more than 20% annual EPS growth through the period and free cash flow generation of £600m in 2029. Our confidence in future growth is underpinned by market leading technologies and established positions on all the world’s major aircraft.”
Highlights2
- Revenue of £3.47bn, 11% like-for-like growth on the prior year (6% including exited businesses)
- Adjusted operating profit1 (pre-PLC costs3) up 38% at £566m (2023: £420 m), at top end of expectations
- Adjusted diluted EPS1 up 45% at 26.4p compared to 18.7p in 2023. Statutory diluted EPS of (3.7)p (2023: 0.1p)
- Net debt1 of £1.32bn, representing leverage1 of 1.9x, in line with our expectations and within our target range of 1.5-2.0x. The Group generated £71 m of positive free cash flow1 (after interest and tax) in the second half of the year.
- Final dividend of 4.0 pence per share proposed, an increase of 14% on the prior year, with a total dividend of 6.0 pence, up 20% on 2023
- Strong operational progress with further improvements delivered in safety, customer quality and commercial contracts.
Divisional highlights2
Engines
- Revenue growth of 26% to £1.46bn with adjusted operating profit1 up 40% to £422m and adjusted operating margin1 up to 28.9%
- Adjusted operating profit1 included £274m of total variable consideration from our leading portfolio of engine risk and revenue sharing partnership (“RRSP”) contracts4, in line with our expectations
- Engines performance driven by strong aftermarket growth of 32%, especially in defence and repairs, plus the positive impact of ongoing business improvement initiatives
- Pratt & Whitney GTF fleet management plans on track with growing partner confidence on long-term position and programme performance
- Additive fabrication operational scale-up and commercial discussions with all engine OEMs progressing at pace; ongoing investment as previously announced provides excellent long-term growth opportunities.
Structures
- Revenue growth of 3% to £2.01bn (down 5% including exited businesses), reflecting defence growth offset by previously highlighted civil destocking and lower than expected OE production rates
- Adjusted operating profit1 of £144m with margins increasing to 7.2% from 5.1% in 2023; driven by benefits from restructuring and business improvements
- Good commercial progress including three non-core disposals and defence repricing 61% complete (on track for 85% target by the end of 2025)
- Strong operational step up, with zero lost time accidents in our civil business and quality escapes reduced by 18% across our core Structures division.
Guidance for 2025 full year5
- Revenue range of £3.55bn to £3.70bn, with growth moderated by ongoing industry-wide supply chain issues with greater impact on Structures
- Adjusted operating profit1 (pre-PLC costs3 of £30m) guidance maintained at the midpoint of £700m6 (range £680m to £720m), reflecting an adjusted operating margin1 of >19%
- Our guidance includes variable consideration of between £320m and £360m depending mainly on OEM build rates of certain engine programmes
- Substantial free cash flow1 generation of >£100m (after interest and tax) expected, representing an important inflection point as our transformational restructuring programme nears completion
- In line with historical and industry seasonality, profit and cash will be second half weighted.
Five year targets5, 7
- Group revenue of c.£5.0bn in 2029, reflecting HSD CAGR based on: current customer build rate assumptions being met by 2029; industry flying hours forecasts; and FX at US $1.25
- Adjusted operating profit1 of £1.2bn+ at Group level (post-PLC costs) at a margin of 24%+, including c.£500m of variable consideration; adjusted diluted EPS1 CAGR of >20%
- Group free cash flow1 of £600m (after interest and tax) to be generated in 2029, driven by adjusted operating profit1 growth, maturing portfolio of 19 RRSPs, the resolution of the GTF powder metal issue, the completion of restructuring and ongoing business improvements
- Leverage1 to remain below 2x during the period, with increasing headroom providing capital allocation optionality, including potential future share buybacks7.
06 Mar 25. Melrose targets £600m of free cash flow.
The shares were dragged down by profit taking on results day, but the company’s prospects are increasingly attractive
New five-year targets set out
* Engines margin hits goal a year early
Melrose Industries (MRO) shares were marked down by 10 per cent as investors took profits from their recent rally, after the aerospace giant reported annual profits at the top end of expectations, and raised its dividend by a fifth.
Adjusted operating profit rose 42 per cent to £540m, while the margin improved by 4 percentage points to 15.6 per cent as the engines business surpassed its 28 per cent target a year early.
Revenue growth was driven by the engines unit, as it delivered a sales uplift of 26 per cent on a strong performance across parts repair, the defence aftermarket and portfolio of risk and revenue share partnerships. At the higher-revenue-but-lower-profit structures business, top-line growth of 3 per cent was stymied by supply chain constraints and customer destocking.
Management anticipates a “step change” in cash generation ahead as profits improve, restructuring costs conclude and cash outflows related to the powder metal issues with Pratt & Whitney’s geared turbofan (GTF) engines fall off. Guidance is for positive free cash flow after interest and tax of at least £100m this year, after an outflow of £74m in 2024.
The improving picture was seen in the new five-year target for annual free cash flow of £600mn, alongside 2029 revenue of around £5bn and adjusted operating profit of at least £1.2bn.
Despite the tumble on results day, the shares are up by a third over the past six months. Investec analysts raised their target price from 735p to 1,000p and noted that the new targets imply an earnings per share compound annual growth rate of more than 20 per cent.
Melrose trades on 15 times forward consensus earnings for 2026, a rating well below its peer group. Buy. Last IC view: Buy, 613p, 27 Feb 2025.
(Source: Investors Chronicle)
05 Mar 25. Dassault Aviation ready to seize defence opportunities in Europe. French warplane maker Dassault Aviation’s (AM.PA) CEO said the company was monitoring government budget discussions and was ready to seize opportunities presented by Europe’s need to rearm given the defence shakeup caused by the U.S. president. European economies agreed over the weekend to boost defence spending to show U.S. President Donald Trump that the continent could protect itself and Germany, Europe’s largest economy, has announced major changes to increase military spending.
CEO Eric Trappier said he was delighted that “Germany realised that they have to invest in defence”.
He also urged the European Commission to bolster the defence industry with European funds, saying they should be allocated equitably across the European defence industry.
“We’ve been hearing about the European defence for the past 30 years. I pleaded for the European defence right from the year 2000,” the CEO said. (Source: Defense News Early Bird/Defense News)
04 Mar 04. AeroVironment Announces Fiscal 2025 Third Quarter Results. AeroVironment, Inc. (“AeroVironment” or the “Company”) reported today financial results for the fiscal third quarter ended January 25, 2025.
“We faced a number of short-term challenges in the third quarter, including the unprecedented high winds and fires in Southern California, which impacted our ability to meet our goals”
Third Quarter Highlights:
* Record funded backlog of $763.5m as of January 25, 2025
* Third quarter revenue of $167.6m down 10% year-over-year
* Third quarter net loss of $(1.8)m and non-GAAP adjusted EBITDA of $21.8m
“We faced a number of short-term challenges in the third quarter, including the unprecedented high winds and fires in Southern California, which impacted our ability to meet our goals,” said Wahid Nawabi, AeroVironment chairman, president and chief executive officer. “Nevertheless, we made significant progress towards executing our long-term growth strategy and building resiliency for the future.
“This quarter, we booked record Switchblade and Jump-20 orders, which helped expand our backlog to a record $764m. We also announced our new Utah manufacturing facility, which will more than double our Switchblade capacity and provide resiliency against regional weather events. Finally, we made significant progress towards completing our BlueHalo acquisition, which we now expect to close in the second quarter of calendar year 2025. While this has been a transition year pivoting away from Ukraine demand, we still expect a strong fiscal year 2025 including record fourth quarter revenue.”
FISCAL 2025 THIRD QUARTER RESULTS
Revenue for the third quarter of fiscal 2025 was $167.6m, a decrease of 10% as compared to $186.6m for the third quarter of fiscal 2024, reflecting lower product sales and service revenue of $16.2m and $2.8m, respectively. From a segment standpoint, the year-over-year decrease was due to a revenue decrease in UnCrewed Systems (“UxS”) of 44%, partially offset by revenue increases in Loitering Munitions Systems (“LMS”) of 46% and MacCready Works (“MW”) of 28%. The January 2025 Southern California high winds, fires and resulting blackouts and shutdowns negatively impacted revenue for the three months ended January 25, 2025.
Gross margin for the third quarter of fiscal 2025 was $63.2m, a decrease of 6% as compared to $67.3m for the third quarter of fiscal 2024, reflecting lower service gross margin of $6.4m, partially offset by higher product margin of $2.3m. As a percentage of revenue, gross margin increased to 38% from 36%, primarily due to increases in LMS product margins driven by favorable contract definitizations in Q2 and increased LMS sales volume, partially offset by lower service margins driven by lower volumes.
Loss from operations for the third quarter of fiscal 2025 was $(3.1)m as compared to income from operations of $14.3m for the third quarter of last fiscal year. The decrease year-over-year was primarily due to an increase in selling, general and administrative (“SG&A”) expense of $16.0m, which includes an increase of $10.1m of acquisition related expenses resulting from our expected acquisition of BlueHalo, and a decrease in gross margin of $4.1 m, partially offset by a decrease in research and development (“R&D”) expense of $2.6m.
Other income, net, for the third quarter of fiscal 2025 was $0.7m, as compared to $0.9 m for the third quarter of last fiscal year.
Benefit from income taxes for the third quarter of fiscal 2025 was $(0.6)m, as compared to provision for income taxes of $1.3m for the third quarter of last fiscal year.
Net loss for the third quarter of fiscal 2025 was $(1.8)m, or $(0.06) per diluted share, as compared to net income of $13.9m, or $0.50 per diluted share, in the prior-year period, respectively.
Non-GAAP adjusted EBITDA for the third quarter of fiscal 2025 was $21.8m and non-GAAP earnings per diluted share were $0.30, as compared to $28.8m and $0.63, respectively, for the third quarter of fiscal 2024.
BACKLOG
As of January 25, 2025, funded backlog (defined as remaining performance obligations under firm orders for which funding is currently appropriated to us under a customer contract) was $763.5m, as compared to $400.2m as of April 30, 2024. The Department of the Army issued a stop-work order on certain existing U.S. government contracts, previously awarded to the Company for foreign military sales funded by the U.S. government via foreign military financing. As of January 25, 2025, funded backlog included approximately $13 m impacted by the stop-work orders.
FISCAL 2025 — OUTLOOK FOR THE FULL YEAR
For fiscal year 2025, the Company now expects revenue of between $780m and $795m, non-GAAP adjusted EBITDA of between $135m and $142m, and non-GAAP earnings per diluted share of between $2.92 and $3.13. (Source: BUSINESS WIRE)
04 Mar 25. Astronics Corporation Reports 2024 Fourth Quarter and Full Year Financial Results
* Fourth quarter sales increased 6.8% to $208.5m; sales for 2024 were up 15.4% to $795.4m
* Fourth quarter net loss was $2.8m; adjusted EBITDA1 was $31.5m, or 15.1% of sales
* Aerospace segment fourth quarter sales increased 12% to a record $188.5m
* Cash flow from operations was $26.4m in the quarter and $30.6m for the year
* Bookings in the quarter were $195.9m; 2024 bookings totaled $808.1m
* 2025 revenue guidance maintained at $820m to $860m
Astronics Segment Sales and Bookings (Graphic: Business Wire)
Astronics Corporation (Nasdaq: ATRO) (“Astronics” or the “Company”), a leading supplier of advanced technologies and products to the global aerospace, defense, and other mission critical industries, today reported financial results for the three and twelve months ended December 31, 2024.
Peter J. Gundermann, Chairman, President and Chief Executive Officer, commented, “2024 was another year of solid progress ending with a strong fourth quarter. For the quarter, we achieved near record sales despite Boeing’s 737 production pause. The higher volume and improved operating efficiencies resulted in higher margins, with an adjusted EBITDA margin1 of 15.1%. We generated strong cash flow from operations of $26.4m in the quarter. The quarter closed a year of 15% sales growth, our third year in a row of substantial double-digit growth. Our margins improved steadily through the year and demand remained robust, resulting in an ending backlog of $599m. Our strong backlog, improving operating efficiencies, stabilizing supply chain, and our improved liquidity position from our recent financing activities position us well for the opportunities we see in 2025.”
Fourth Quarter Results
Growth in sales were driven by the Aerospace segment due to continued strength in demand primarily from the Commercial Transport market. Aerospace sales were up $19.8m, or 11.7%, which more than offset the $6.6m decline in Test Systems sales on lower defense revenue.
Higher volume and improving productivity drove gross profit up $10.1m to $50.1m, or 24.0% of sales. Adjusted gross profit2 of $52.5m, or 25.2% of sales, increased $12.6m, or 31.4%. Somewhat offsetting the improvements in volume, mix and productivity, were a $1.7m true-up to the warranty reserve related to a new product launch that requires a field modification and an additional $0.8m charge related to the Aerospace customer bankruptcy, both of which were initially reported in the third quarter.
In the fourth quarter of 2024, the $9.0m increase in selling, general and administrative expenses (“SG&A”) included a $4.8m reserve for the previously announced damage award that was related to a patent infringement dispute in the UK. Also accounting for the increase was a $2.2m increase in litigation-related legal expenses and $1.4m in restructuring-related severance charges incurred in our Test Systems segment.
On February 21, 2025, the UK High Court of Justice rendered a decision in the Company’s long-running patent infringement dispute in that jurisdiction. The ruling requires payment of approximately $11.9m and, as a result, SG&A expense in the quarter reflects the true-up of the legal reserves for that matter. Any additional amounts required to be paid by the Company related to certain other factors peripheral to the damages award will be determined at follow-up hearings expected to occur in the first half of 2025. The Company expects that payment of the final liability will be required in the second quarter of 2025, and that an appeal, if any, would likely be heard in early 2026.
Despite the reserve increase resulting from the infringement ruling, consolidated operating income increased $1.1m as leverage from higher volume helped to offset the unusual expenses. On an adjusted basis, operating income2 for the 2024 fourth quarter doubled to $23.8m, and adjusted operating margin2 expanded 550 basis points to 11.4%.
Impacting net income was $3.2m for the loss on extinguishment of debt which included the call premium of $1.3m on our previous term loan and the write-off of $1.9m of associated deferred financing costs.
Tax expense of $3.4m was primarily due to a valuation allowance applied against the deferred tax asset associated with research and development costs that are required to be capitalized for tax purposes, compared with a tax benefit of $5.4m in the prior year period.
As a result, consolidated net loss was $2.8m, or $(0.08) per diluted share, compared with net income of $7.0m, or $0.20 per diluted share, in the prior-year period. Adjusted net income2 increased $10.3m to $16.8m. Per diluted share, adjusted net income2 more than doubled to $0.48.
Adjusted EBITDA2 increased 27% to $31.5m, and was 15.1% of consolidated sales, primarily as a result of increased profitability from higher sales.
Bookings were $195.9m in the quarter. For the year, bookings totaled $808.1m, resulting in a book-to-bill ratio of 1.02:1. Backlog at the end of the quarter was $599.2m, the highest recorded for any year-end in the Company’s history.
Aerospace Segment Review (refer to sales by market and segment data in accompanying tables)
Aerospace Fourth Quarter 2024 Results (compared with the prior-year period, unless noted otherwise)
Record Aerospace segment sales of $188.5m were up $19.8m, or 11.7%. The improvement was driven by a 13.5% increase, or $16.7m, in Commercial Transport sales. Growth was primarily related to increased demand by airlines for cabin power and inflight entertainment & connectivity (“IFEC”) products which are in the Electrical Power & Motion and Avionics product groups. This was somewhat offset by lower sales of commercial lighting and safety products resulting from the Boeing strike.
Military Aircraft sales increased $7.2m, or 41.6%, to $24.5m driven by increased demand for Lighting & Safety products as well as progress on the FLRAA program. General Aviation sales decreased $2.5m, or 12.3%, to $17.7m.
Aerospace segment operating profit of $16.8m, or 8.9% of sales, improved over the prior-year period despite a $4.8m true-up in legal reserves related to the previously discussed UK judgment, an increase of $3.0 m in litigation-related legal expenses, $1.7m in warranty expense related to the previously-mentioned field modification, and a non-cash reserve associated with a customer bankruptcy of $1.0m. Adjusted Aerospace operating profit2 was $30.2m, or 16.0% of sales, reflecting the leverage gained on higher volume and improving production efficiencies.
Aerospace bookings were $182.5m for a book-to-bill ratio of 0.97:1. Backlog for the Aerospace segment was $537.6m at the end of 2024.
Mr. Gundermann commented, “Our Aerospace business continues to accelerate nicely, with consistent double-digit growth in revenue. Operating margin expansion validates the strong operating leverage of the business while 16.0% adjusted operating profit margin2 demonstrates solid progress towards our mid-teens target level. Demand remains strong with total bookings for the year of $733m for a book-to-bill of 1.04, supporting our expectation of continued growth in 2025.”
Test Systems Segment Review
Test Systems segment sales were $20.0m, down $6.6m from a strong comparator quarter in 2023.
Test Systems segment operating loss was slightly below break-even, consistent with the fourth quarter of 2023. Additional restructuring initiatives were implemented in the 2024 fourth quarter, which are expected to provide annualized savings of approximately $4m to $5m, beginning in the first quarter of 2025. During the quarter, the closure of a third Test facility in the last two years was substantially completed. Operating loss for the fourth quarter includes $1.4m in severance expense and the impact of contribution margin lost on lower sales volume. Adjusted operating profit margin2 was 7.3%, an improvement over the 2.5% of the comparator quarter, demonstrating the benefit from the restructuring initiatives implemented during 2024.
Bookings for the Test Systems segment in the quarter were $13.4m, for a book-to-bill ratio of 0.67:1 for the quarter. Backlog was $61.7m at the end of 2024.
Mr. Gundermann commented, “Our Test business initiated further restructuring during the fourth quarter to focus on the most critical initiatives going forward, including the radio test program for the U.S. Army, which is expected to enter volume production in the second half of 2025.”
Liquidity and Financing
Cash provided by operations in the fourth quarter of 2024 was $26.4m, primarily the result of improved working capital management and higher non-cash adjustments impacting net income, including loss on debt extinguishment and legal expense and reserve increases. Cash on hand at the end of the quarter was $18.4m. Capital expenditures in the quarter were $3.2m and $8.4m for the full year. Net debt was $156.6m, down from $161.2m at December 31, 2023.
On November 25, 2024, the Company amended the ABL Revolving Credit Facility, increasing the revolving credit line to $220 m with an interest rate of SOFR plus 2.75% to 3.25% (an increase of 0.25% to each such applicable margin). The Company had $10 m drawn on the facility at the end of 2024.
On December 3, 2024, the Company issued $165m aggregate principal amount of 5.500% Convertible Senior Notes. The Notes will mature on March 15, 2030, unless earlier converted, redeemed or repurchased. The Company has the flexibility to settle the Notes in stock, cash or a combination of both. The Company’s intention is to minimize dilution by net share settling the Notes whenever possible.
The Company repaid in full all outstanding indebtedness on its Term Loan Facility, which consisted of a repayment of principal of approximately $54.9m, plus accrued but unpaid interest, fees and expenses, including a call premium of $1.3m, which satisfied all of the Company’s indebtedness obligations thereunder.
2025 Outlook
The Company expects 2025 revenue to be approximately $820m to $860m. The midpoint of this range would be a 6% increase over 2024 sales. Sales in the first quarter are projected to be approximately $190m to $205m, with subsequent quarters stepping up from there.
Backlog at December 31, 2024 was $599.2m, a record year-end level.
Planned capital expenditures for 2025 are expected to be in the range of $35m to $40m. The higher level of expenditure is driven by a planned facility consolidation, additional capacity to handle anticipated growth and to compensate for constrained investment in recent years.
Mr. Gundermann concluded, “2024 was another year of strong double-digit growth for Astronics. We have averaged approximately 22% per year for the last three years. We expect growth to moderate in 2025, but margin improvement to continue. We begin the year with a strengthened balance sheet, an improving margin profile, and a record backlog. The signs are strong that 2025 will be a very good year for the Company.” (Source: BUSINESS WIRE)
04 Mar 25. Scottish space tech to power Danish financial innovation. Scottish space companies are driving new partnerships with Denmark’s finance sector, leveraging satellite data to enhance ESG reporting, strengthen cybersecurity, and validate investment decisions. This aligns with Denmark’s new national space strategy, announced in December 2024, which focuses on enhancing international partnerships. Scottish Enterprise is leading a new project in partnership with Glasgow City Innovation District and Copenhagen Fintech, which aims to demonstrate the pivotal role Scottish space companies could play in supporting the Danish financial sector. After discussions with key industry trade organisations, an open, in-person networking event will take place at the British Embassy in Copenhagen on 18 March. This builds on momentum from the Space Scotland Nordics Summit 2024, hosted in Copenhagen by the Embassy of the United Kingdom in Denmark, Space Scotland, as well as the Glasgow City Innovation District (GCID) Venture Studio Challenge. The GCID Venture Studio Challenge Pillar, a long-term initiative, is accelerating the growth of high-potential companies leveraging space data and satellite technology, fostering cross-sector innovation that aligns with the needs of industries such as finance. The event will showcase how Scottish companies are helping underpin 18% of the UK’s annual GDP, taking their capabilities and expertise to support forward-thinking Danish financial services securely and sustainability, driving innovation.
Julie Morrison, Global Head of Trade at Scottish Development International, said: “Ambitious Scottish companies are at the forefront of the development of space data applications. The Challenge Pillar Call was an important step in highlighting how that data can be used commercially across a range of sectors domestically. We’re confident that this event will demonstrate how groundbreaking space data applications developed in Scotland can be used by commercial partners internationally, specifically in financial services, opening up exciting new export opportunities.”
Alisdair Gunn, Director, Glasgow City Innovation District commented “We had a great response and outcomes from the GCID Venture Studio Challenge Pillar space programme. We’re delighted to be partnering with Scottish Enterprise to take space companies to Denmark and put Glasgow’s thriving space industry on the map.”
Thomas Krogh Jensen, CEO of Copenhagen FinTech added “This project unites Scotland’s pioneering satellite data companies with Denmark’s leading financial, investment, and ESG sectors to explore how satellite-driven insights can revolutionise
04 Mar 25. Eutelsat soars as investors bet on OneWeb satellites as European option to Starlink. Franco-British satellite operator Eutelsat said on Monday it was committed to boosting Europe’s autonomy in space-based connectivity and supplying internet access to war-torn Ukraine. The comments followed a nearly 50% jump in Eutelsat’s shares on Monday, amid a wider rally of Europe’s defence stocks, as investors bet on prospects of rising European demand for its OneWeb satellites.
“We have deployed and continue to operate hundreds of terminals across Ukraine and the Black Sea,” a Eutelsat spokesperson told Reuters, adding the company had played a key role in the region since the start of the war.
Reuters reported in February that U.S. negotiators working on a critical minerals deal had hinted at a potential shutdown of Elon Musk’s Starlink in Ukraine should a deal not be reached.
Friday’s clash between Ukrainian President Volodymyr Zelenskiy and U.S. President Donald Trump may have opened a door for other satellite operators to swoop in and replace Starlink in the war-torn country.
“US-European tensions put Starlink’s sales momentum at risk in Europe and OneWeb is the only other low-earth orbit option,” Stephane Beyazian, analyst at Oddo BHF, said. (Source: Reuters)
04 Mar 25. Thales CEO says European defence capacity tied to orders. Europe has the technology to assure its own defence but its ability to fill any gaps left by transatlantic tensions will depend on the extent to which political declarations turn into firm defence orders, the head of France’s Thales (TCFP.PA) said. European leaders agreed at a weekend summit that they must sharply increase defence spending to show U.S. President Donald Trump that the continent can protect itself.
“Does Europe have the necessary technology to produce the full spectrum of defence equipment that it needs? The answer is yes,” Thales CEO Patrice Caine told reporters, adding that France already supplied virtually all its own military needs.
But Caine, who leads France’s largest defence electronics group, said industrial capacity would track actual demand.
“Production capacity adjusts naturally to the level of contracts. It is more a question for buyers, governments and armies. Will the declarations be backed by extra contracts?” Caine told reporters after posting annual Thales results. (Source: Reuters)
04 Mar 25. Defence demand lifts Thales annual earnings. French defence and technology group Thales (TCFP.PA) posted stronger-than-expected 2024 earnings despite losses in space on Tuesday, lifted by robust arms spending and recovering air traffic, and forecast higher sales and profitability for 2025. Europe’s largest defence electronics firm said operating income rose 5.7% on a like-for-like basis to 2.419 bn euros as revenues gained 8.3% to 20.577bn, with defence growth dwarfing gains in aerospace and cyber on a constant basis. New orders rose by an underlying 6% to 25.289bn euros. Analysts had on average expected operating profit of 2.351bn euros on revenues of 20.138bn, and an order intake of 23.76bn, according to a company compiled consensus. Thales, whose shares soared alongside those of its peers on Monday after European leaders pledged to boost arms spending, said rising demand had repaid investments in defence capacity.
“Geopolitical instability is a constant and to a great extent it is feeding the investments made by countries in their defence,” CEO Patrice Caine told reporters. (Source: Reuters)
03 Mar 25. Senior makes progress despite customer headwinds.
The Airbus and Boeing supplier expects performance in its aerospace arm to improve as 2025 goes on
- Aerostructures sale on track
- Book-to-bill ratio of 1.12 times
FTSE 250 aerospace and defence components supplier Senior (SNR) grew its annual profits and dividend despite being hit by supply chain issues at major clients Airbus (FR:AIR) and Boeing (US:BA).
Aerospace revenue improved 7 per cent on the ramp-up of civil aircraft production, better pricing and a strong performance by the company’s high-pressure hydraulic fittings business, Spencer Aerospace. Notable contract wins in the year included a five-year aerofoils supply deal with Rolls-Royce (RR.).
While aerospace adjusted operating profit rose 14 per cent on higher prices and volumes, the pace of growth was stymied by production issues at Airbus and Boeing. In October, Senior’s shares tumbled by 13 per cent when the company warned about the impact of engine performance and interiors issues at Airbus and restricted production rates and employee strikes at Boeing.
There are still production difficulties to navigate. But management expects “increasing aircraft build rates, operational efficiency benefits and improved contract pricing” to boost the aerospace division’s performance as 2025 progresses.
The company also confirmed it is at “an advanced stage” of the disposal process with its aerostructures business, which posted a £7mn operating loss in the year.
Meanwhile, profit fell by 3 per cent at the smaller (but more profitable) flexonics division on a weaker land vehicles market and a subdued upstream oil and gas business performance in the Middle East and North America.
Free cash flow improved by 12 per cent to £17m, but return on capital employed slipped from 7.1 per cent to 6.8 per cent and the adjusted operating margin was flat at 4.8 per cent.
A rating of 17 times forward consensus earnings prices the outlook in. Hold. Last IC view: Hold, 153p, 5 Aug 2024. (Source: Investors Chronicle)
03 Mar 25. General Atomics (GA) today announced the strategic acquisition of North Point Defense, Inc. (NPD), a leading provider of Signals Intelligence (SIGINT) exploitation software and sensor integration, by General Atomics Integrated Intelligence, Inc. (GA-III), formerly known as General Atomics Commonwealth Computer Research, Inc. This acquisition enhances GA’s capabilities in the rapidly evolving SIGINT field, positioning the company to deliver advanced ISR solutions for air, sea, ground, and space platforms. From concept to deployment, NPD delivers AI/ML-based autonomous signal processing and data dissemination solutions providing real-time actionable intelligence, supporting tactical and national mission priorities. “Joining GA represents an incredible opportunity to enhance our impact in delivering cutting-edge SIGINT solutions in support of national and tactical users,” said Bruce Benenati, President of NPD. “As part of a mission-focused organization with a proven track-record in tactical intelligence across the DoD and IC, we can accelerate innovation and deployment at scale. The integration gives our team access to unmatched operational expertise, resources, and a broader customer base. Together, we are poised to deliver even greater capabilities to those who depend on us in the field.” GA-III is committed to providing a comprehensive suite of “out-of-the-box” hardware and software tools to meet mission requirements and expand the innovative intelligence capabilities within the GA group of companies. “The integration of NPD technologies into a division of GA-III is a strategic shift, enhancing GA’s ability to innovate rapidly and provide greater value to customers with end-to-end ISR solutions that are more efficient, effective, and technologically advanced.” said Brian Ralston, President of GA-III. Baird served as the exclusive financial adviser and Miles & Stockbridge acted as legal counsel to North Point Defense on the transaction.
02 Mar 25. Shield British defence firms from US raiders, top brass sound a warning. UK defence firms must not be abandoned to unsuitable overseas predators, senior military figures, industry veterans and politicians warned this weekend. Fears over the sale of some of Britain’s leading defence firms to US private equity barons have surfaced as Hampshire-based defence giant Chemring is being targeted by vulture capitalists. US private equity firm Bain Capital has tabled a £1.1 bn bid for the 119-year-old defence group, raising concerns that the UK sector will lose another company to foreign owners. Former stalwarts including Cobham, Ultra Electronics, Laird and Meggitt have been sold off in recent years. The mooted Bain deal was branded a ‘classic case of buy, strip and flip’, by Lady Nadine Cobham, daughter-in-law of Sir Alan, the founder of the aerospace manufacturer, which was taken over by US private equity outfit Advent International in 2019. She was referring to the private equity business model of buying businesses as cheaply as possible, stripping their assets and selling them on at a profit as quickly as possible. The UK is rushing to rearm itself along with the rest of Europe as the US military support that has been in place since the Second World War looks significantly less certain under President Donald Trump. Critics say selling off key defence businesses to US buyers is inadvisable at a time when the UK needs to bolster its home-grown industry. Lord Heseltine, a Tory peer and Defence Secretary under Margaret Thatcher, said this weekend ‘no other country would allow this’, including the US.
He said Government should make more use of ‘golden shares’. These are stakes in firms considered vital for national security, such as BAE Systems and Rolls-Royce, that are held by Government and allow Ministers to block undesirable takeovers.
Heseltine added that any bid for Chemring should be ‘properly scrutinised’ by Ministers under the National Security and Investment Act.
Admiral Lord Alan West, former head of the Royal Navy, said he had ‘concerns’ about the looming takeover of another British defence business. He added that the sector is ‘particularly attractive and vulnerable’ to foreign raiders.
‘We need to think and look carefully at what we allow to happen in that area and maintain the right sovereign capability.
‘We should be ensuring that as much of the defence money we’ve got is being spent in this country helping create new jobs.’
The boss of Rolls-Royce, Tufan Erginbilgic, said Ministers might need to act if there was a risk that an overseas takeover would not be positive for Britain or that a new owner would not invest here.
He said in some cases, deals might be beneficial ‘but there may be some other examples where that is not the case and that is where the Government should step in and decide’.
The control of Britain’s defence industry has been brought into sharp focus by Keir Starmer after the Prime Minister unveiled plans last week to raise spending on the armed forces.
It comes amid fears Trump could withdraw US military protection after he criticised Europe’s perceived reliance on American firepower.
Former Tory leader Sir Iain Duncan Smith said ‘too many’ of the UK’s defence assets had been sold off already.
‘Our current production capability would have seen us lose the Second World War.
‘We should be looking to ramp up our security production,’ the MP said.
‘The stock market is there to raise capital but it’s not working. So instead, companies sell themselves to Americans to access US capital. We must block these deals and help these companies.’
Neither Bain nor Chemring has as yet commented officially on the bid speculation.
Founded in 1905, Chemring made equipment to change UK street lighting from gas to electric, before becoming a defence engineering specialist.
Today, it has customers across the world, including the RAF.
Lady Cobham said Bain was only interested in a takeover of Chemring ‘for its own financial reward’ and that it would not act ‘for the benefit of the employees or the wellbeing of the company.’ (Source: https://www.thisismoney.co.uk/)
03 Mar 25. UK’s Senior in advanced talks for sale of aerostructures business. British engineering firm Senior Plc (SNR.L) on Monday said that it was in advanced negotiations with a small number of interested parties for the sale of its aerostructures business, which the company also expects to turn profitable this year. The supplier to Boeing (BA.N) and Airbus (AIR.PA) has benefited from increased demand for new and replacement aircraft parts, as commercial flying recovers to pre-pandemic levels and production, and supply chain snags at top customers stabilise. Aerostructures forms part of Senior’s majority Aerospace unit, which builds and supplies aircraft parts to jet makers across commercial and defence use. The company expects the sub-unit to make an operating profit of 9m to 11m pounds ($11.3m to $13.9m) for 2025. ($1 = 0.7943 pounds) (Source: Reuters)
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SPX CommTech, part of SPX Technologies Inc, innovates specialised technologies within the Radio Frequency (RF) spectrum to ensure a smarter, more secure future for all. Formed by TCI and ECS, SPX CommTech’s Battlespace portfolio enables defence and security teams to detect, defeat and exploit RF signals to enhance communications intelligence (COMINT) and counter unmanned aerial systems (Counter-UAS). Additionally, its Tactical Data Link portfolio allows intelligence gathering agencies, special forces, emergency response, and security teams to securely and reliably transfer video and data between enabled-aircraft and ground teams over long distances for airborne Intelligence, Surveillance, Reconnaissance (ISR).
For more information visit www.tcibr.com and www.enterprisecontrol.co.uk
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