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26 Jun 25. India emerges as bright spot in a volatile global venture capital market during January-May 2025, reveals GlobalData. India has emerged as a beacon of resilience in the world of venture capital (VC), posting a 14% year-on-year (YoY) rise in deal volume and a 29% jump in deal value during the first five months of 2025. This growth signals rising investor confidence in Indian startups, even as other major markets like China and the UK face fluctuations in funding trends, reveals GlobalData, a leading data and analytics company. Aurojyoti Bose, Lead Analyst at GlobalData, comments: “The surge in funding value highlights the increasing confidence of investors in Indian startups. The country’s ability to attract investments underscores its status as an emerging hub for innovation and entrepreneurship. The growing digitalization of services and the increasing penetration of technology in everyday life have created fertile ground for startups to thrive.
“This is further supported by a robust talent pool and a favorable regulatory environment, which together foster innovation and entrepreneurship. Moreover, as VC landscape in some of the key global markets experience fluctuations, India’s performance also stands out, reflecting resilience.”
For instance, China and the UK experienced YoY decline in both VC deal volume and value. Meanwhile, the US, which happens to be the top global market for VC funding activity, registered decline in deal volume but a massive jump in terms of value. India continues to be among the top five markets for VC funding activity in terms of deal volume as well as value. An analysis of GlobalData’s Deals Database revealed that India accounted for about 8% share of the total number of VC deals announced globally during the first five months of 2025. Meanwhile its share of the global VC deal value stood at around 4% during the period.
Bose concludes: “GlobalData expects the momentum to continue, particularly in sectors that leverage technology to address pressing challenges. The combination of a burgeoning startup ecosystem and increasing investor interest is likely to further solidify India’s position as a key country in the global venture capital market.”
Note: Historic data may change in case some deals get added to previous months because of a delay in disclosure of information in the public domain. To gain access to our latest press releases: GlobalData Media Centre. (Source: Global Data)
26 Jun 25. General Atomics Aeronautical Systems, Inc. (GA-ASI) announces an investment in another Dutch business, Arceon, following the inaugural Blue Magic Netherlands (BMN) event held in November 2024. GA-ASI is a global leader in unmanned aircraft systems and related mission systems. GA-ASI selected Arceon following a compelling pitch they made during the BMN event and after detailed business and technology discussions with GA-ASI and GA’s affiliates, General Atomics Energy and General Atomics Electromagnetic Systems. Arceon joins Emergent Swarm Solutions and Saluqi Motors as companies receiving investment from GA-ASI following the BMN event.
Arceon is revolutionizing high-performance ceramic composites through their innovative, fast, scalable, and cost-effective melt infiltration process. Their cutting-edge Carbeon carbon-ceramic components — engineered for applications such as nozzles, nozzle extensions, leading edges, nose caps, and airframes — are tailored to meet the increasing and rigorous demands of the space and defense sectors.
“We are honored to collaborate with General Atomics in advancing hypersonic development. This milestone marks our official entry into the U.S. defense sector, presenting an extraordinary opportunity to demonstrate our technology on a global stage. We look forward, with great anticipation, to the journey ahead,” said Rahul Shirke, founder and CEO of Arceon B.V.
“We’re excited to be working with Arceon,” said Brad Lunn, managing director for GA-ASI. “Their technology could have a broad range of applications for GA, from high-temperature engine exhaust materials to hypersonics and fusion containment.”
At the Blue Magic investment and innovation conference in the Netherlands last November, GA-ASI and its partners heard pitches from innovative Dutch companies about the important technologies they are developing. The event was organized collaboratively between GA-ASI, the Dutch Ministry of Defense, the Dutch Ministry of Economic Affairs, Brainport Development in Eindhoven, and Brabant Development Agency (BOM). GA-ASI is delivering eight MQ-9A aircraft to the Royal Netherlands Air Force (RNLAF).
GA-ASI is continuing to work with the Dutch government and Dutch industry in supporting the growth of technology innovation in the Netherlands and anticipates holding its second BMN event in Eindhoven later this year. The company hosted its first Blue Magic event in 2019 in Belgium, with subsequent events held in 2020, 2021, and 2023.
26 Jun 25. Serco, the internal provider of critical government services, announced a scheduled trading update for the first six months of 2025.
Serco anticipates a strong first half with significant contract wins:
• Revenue: ~£2.4bn, an increase of 2% including organic growth of around 2%.
• Underlying operating profit: at least £140m with a continued strong margin of around 5.9%.
• Order intake: very strong with around £3bn of contract awards; high weighting of orders to defence sector and good progress on replenishing the pipeline.
• MT&S acquisition completed: enhancing capability and scale in US and international defence markets.
• Strong financial position: adjusted net debt expected to be ~£325m at end of June, with leverage c.1.2x net debt to EBITDA, and free cash flow weighted to the second half.
Serco has confidence in its full-year guidance:
• Full-year organic revenue growth: now expected to improve to ~1% due to higher than anticipated activity levels in the immigration sector. Overall revenue guidance increased from ~£4.8bn to ~£4.9bn.
• Underlying operating profit: guidance of ~£260m is unchanged, with the first-half weighting reflecting previously disclosed impacts in the second half from higher UK national insurance contributions and the conclusion of the Australian immigration contract.
• Financially well positioned: adjusted net debt of ~£245m expected for full year. Cash conversion anticipated to be in line with our medium-term target of at least 80%. As previously stated, the Board will review the capital position at the half year.
Serco also announced the appointment of Keith Williams to the Board as a Non-Executive Director and Board Chair Designate this morning. Mr Williams will join the Board on 1 August and will take on the position of Chair on 1 January 2026 after John Rishton, who will have completed a full nine-year tenure on the Board, steps down on 31 December 2025.
Commenting on today’s update, Anthony Kirby, Serco Group Chief Executive, said: “Serco has delivered a strong first-half performance, with positive organic revenue growth, and good margins, despite known headwinds in immigration markets. We completed the acquisition of MT&S in May, having received US Government approval, further strengthening our position and capabilities in both the US and international defence markets at a time of increasing defence budgets around the world. We have also delivered an outstanding period of contract awards, with strong win rates, securing around £3 bn of contracts in the first half, alongside strong client retention and replenishing our pipeline of opportunities. I remain confident in our outlook and guidance for 2025. In my first few months as CEO, I have seen at first-hand the structural drivers of long-term demand in our markets, most notably in defence, justice, migration and citizen services. With our strong financial position, I believe we are well positioned to pursue opportunities to enhance future growth and deliver continued value to our shareholders.”
26 Jun 25. AeroVironment’s shares soared on Wednesday after the company beat Wall Street expectations for fourth-quarter results, driven by sustained demand for its military drones.
Shares jumped 25% in early trading, on track for its biggest daily percentage rise since March 5 last year.
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Defense sector demand for unmanned systems and military hardware continues to be robust, with analysts forecasting continued growth amid rising global tensions. Revenue in the quarter rose 40% to $275.1 m, topping analysts’ expectations of $241.6m, per LSEG data. Adjusted profit per share came in at $1.61, above consensus of $1.39. (Source: Reuters)
26 Jun 25. German space startup Isar Aerospace obtained 150m euros ($173m) in funding from an American investment company, it said on Wednesday. The company, which specializes in satellite launch services, signed an agreement for a convertible bond with Eldridge Industries, it said. The investment will be used to expand its launch service offerings, it added. “We are catering to the rising global demand for satellite launch services and provide global markets and governments with independent and flexible access to space,” Daniel Metzler, CEO of the company, said in a statement. (Source: Reuters)
24 Jun 25. Kraken receives sovereign investment for maritime expansion. The funding will boost Kraken’s manufacturing, R&D, international expansion, and rapid prototyping efforts. Kraken Technology Group, a UK-based company specialising in uncrewed surface vessels (USVs), has received funding from strategic investors to support its expansion efforts. The investors include the NATO Innovation Fund, the UK’s National Security Strategic Investment Fund (NSSIF), and European venture capital firm Superangel. The funding will enhance Kraken’s manufacturing capabilities, research and development (R&D), international scaling, and rapid prototyping initiatives. Kraken said the collaboration among sovereign and intergovernmental funding sources underscores the growing demand for adaptable maritime systems within NATO member states. NATO Innovation Fund partner Patrick Schneider-Sikorsky said: “Dispersed and uncrewed maritime systems are vital to ensuring naval superiority and securing Allies’ interests in contested waters.
“Kraken’s cutting-edge technology delivers a force-multiplying edge over traditional fleets, enabling persistent presence and rapid response without putting sailors at risk.”
Kraken’s platforms are designed to bolster naval capabilities while minimising costs and personnel risks.
In light of rising global tensions and threats to subsea infrastructure, the company is fulfilling production orders for NATO countries from its advanced facilities in Hampshire, supported by recent investments from various international public and private entities.
Kraken’s product lineup includes the K3 SCOUT, a USV with a modular payload bay currently used in NATO operational exercises, as well as the K4 MANTA, which offers uncrewed surface and subsurface capabilities.
It also offers the K5 KRAKEN, designed for maritime precision engagement. Each platform is intended for modular deployment across diverse maritime and coastal operations.
Kraken CEO Mal Crease said: “The investment received is a powerful vote of confidence in Kraken and its platforms, particularly given the nature of the funds. We look forward to working with the NIF, NSSIF, and others as we continue to grow our capabilities and further our mission in partnership with other NATO countries.”
In November 2023, Kraken and L3Harris Technologies announced a collaboration to enhance the control systems of the K40 MANTA uncrewed surface-subsurface vehicle. (Source: naval-technology.com)
25 Jun 25. Babcock International Group PLC
Preliminary results for the year ended 31 March 2025
Strong results, well-positioned for a new era of defence
David Lockwood, Chief Executive Officer, said:
“This is a new era for defence. There is increasing recognition of the need to invest in defence capability and energy security, both to safeguard populations and to drive economic growth. Our specialist capabilities are increasingly relevant and, with a growing set of opportunities before us, Babcock is committed to play its part in driving prosperity alongside its customers.
“Our strong financial performance in FY25, with operational momentum across the business, has enabled us to upgrade our medium-term guidance, increase our dividend and launch a £200m share buyback programme for the first time in the company’s history. We look forward to continuing our track record of profitable growth, and to investing in the people and capabilities that will create value for all our stakeholders.”
Financial highlights
• Contract backlog: £10.4bn, large Land and Aviation awards offset execution on long-term contracts
• Revenue: grew 11% on an organic basis, driven by strong growth in Nuclear and Marine
• Statutory operating profit: up 51% to £364m. FY24 included two non-recurring items, a £90m contract loss and a one-off £17 m profit on disposal of property
• Underlying operating profit: up 53% to £363m, or up 17% excluding the FY24 non-recurring items noted above, driven by strong performance in Nuclear and Land
• Underlying operating margin: up 50-basis points to 7.5% excluding the FY24 non-recurring items, with increased margin in Nuclear, Land and Aviation
• Underlying EPS: 50.3 pence, up 23% excluding the FY24 non-recurring items, due to higher operating profit and a lower interest charge
• Underlying free cash flow: £153m, underlying operating cash conversion of 82%
• Net debt excluding leases reduced by £110m to £101m delivering a gearing ratio of 0.3x (FY24: 0.8x)
• Dividend: recommended final dividend of 4.5 pence per share, taking the total to 6.5 pence per share, up 30%
• Announcement of £200 m share buyback to be executed over FY26
New medium-term guidance:
• Average revenue growth of mid-single digit
• Underlying operating margin of at least 9% (previously at least 8%)
• Average underlying operating cash conversion of at least 80%
• Medium-term guidance underpinned by current business and near-term pipeline
• We are well positioned for opportunities aligned with attractive market growth trends
FY26 outlook
We look forward to another year of progress, and expect to achieve our previous medium term target of underlying operating margin of 8% in FY26, at least one year earlier than we anticipated.
Strategic highlights
• Launched H&B Defence joint venture with HII in Australia
• Signed an MOU with Patria to offer the Patria 6×6 Armoured Personnel Carrier to the UK Armed Forces
• Launched South West Regional Hub for Nuclear Skills to support the delivery of the UK strategic plan for skills
• Launched collaborative Submarine Availability Support Hub in Bristol with Submarine Delivery Agency
• Expanded the General Logistics Vehicle offering through launch of a medium wheelbase. Plans for six-wheel variant
• Launched the Babcock Immersive Training Experience (BITE) to support individual and collective training
Operational highlights
Marine
• In June 2025, we achieved a major milestone as the first of five Type 31 Frigates, HMS Venturer, left the assembly hall and entered the water and returned to dry dock for fit out in Rosyth
• Awarded an additional c.£65m Capability Insertion Period contract for the Type 31 programme
• Secured a further c.£240m Missile Tube Assembly contract for the US Columbia Class submarines programme
• Achieved record order intake in LGE of approximately £430m (up 43%), with more than 70 international contracts
• Successful first year of in-service delivery of the Skynet contract to manage the UK’s military satellite and space operations
Nuclear
• Reopened Devonport’s 9 Dock following significant regeneration work and successfully docked down HMS Victorious
• First Astute Class submarine docked in Devonport’s upgraded 15 Dock facility
• 28% growth in Cavendish Nuclear driven by expansion of new civil nuclear projects
• Continued significant ramp up at Hinkley Point C to install mechanical and electrical services
• After year end, awarded £114m contract to support first nuclear submarine defueling operations in 20 years
Land
• Awarded sole-source five-year British Army strategic support partner contract extension (‘Reframe’, formerly DSG) worth £1.0bn
• Awarded additional contract to build 53 High Mobility Transporter Jackal 3 six-wheeled ‘Extendas’ for the British Army
• Launched 120mm Ground Deployed Advance Mortar System with ST Engineering with live firing demo for the UK
• Awarded first NATO training contract and several key UK training contract extensions
• Continued to provide critical defence support capability to Ukraine
Aviation
• Awarded Mentor 2, a contract for 15 years (plus two option years) to deliver military air training solutions for the French Air and Space Force, and Navy
• Secured 12-year contract with Airbus to support 48 French defence and security EC145s across France and overseas
• Reached milestone of 60,000 flight training hours for the French Air Force
• Awarded two-year HADES contract extension to provide technical airbase support services across the UK tri-forces
• Secured a £70m contract to deliver new infrastructure facilities for Ascent UK Military Flying Training System
1. Unaudited full year results
The financial information set out in this preliminary announcement is unaudited. The Group has completed the preparation of its Annual Report and Accounts for the year ended 31 March 2025. The Group’s auditor, Forvis Mazars, has consented to the release of this preliminary announcement but is not yet in a position to issue its Audit report. Forvis Mazars has advised that the audit is substantially complete with no material matters currently remaining, but that further time is required for documentation and completion procedures. Forvis Mazars expects to issue its Audit report by Tuesday 1 July 2025.
2. Alternative Performance Measures (APMs):
The Group provides alternative performance measures (APMs), including underlying operating profit, underlying margin, underlying earnings per share, underlying operating cash flow, underlying free cash flow, net debt, net debt excluding leases and contract backlog to enable users to have a more consistent view of the performance and earnings trends of the Group. These measures are considered to provide a consistent measure of business performance from year to year. They are used by management to assess operating performance and as a basis for forecasting and decision-making, as well as the planning and allocation of capital resources. They are also understood to be used by investors in analysing business performance.
The Group’s APMs are not defined by IFRS and are therefore considered to be non-GAAP measures. The measures may not be comparable to similar measures used by other companies, and they are not intended to be a substitute for, or superior to, measures defined under IFRS. The Group’s APMs are consistent with those for the year ended 31 March 2024. The Group has defined and outlined the purpose of its APMs in the Financial Glossary on page 30.
3. FY24 non-recurring items
• FY24 included a revenue reversal of £66.3m from the Type 31 loss. Excluding this, FY24 revenue was £4,456.4m
• FY24 underlying operating profit included a contract loss of £90.0m and a profit on disposal of property of £17.0m. Excluding these, FY24 underlying operating profit was £310.8m
• Excluding the Type 31 loss and profit on property disposal, FY24 underlying operating margin was 7.0%
25 Jun 25. Babcock reveals first buyback as profit surges
Defence company raises medium-term margin guidance.
• Dividend up 30 per cent
• Nuclear arm drives growth
Babcock International (BAB) upgraded margin guidance and unveiled its first-ever share buyback amid what chief executive David Lockwood described as a “new era for defence”.
New medium-term guidance is for an underlying operating margin of 9 per cent, and the company expects to hit its prior target of 8 per cent a year early in 2026. Forecasts for average revenue growth in the mid-single digits and average operating cash conversion of at least 80 per cent were kept steady.
The buyback of £200mn will be completed this year and represents around 4 per cent of market cap.
Annual organic revenue growth of 11 per cent was driven by the nuclear arm (up 19 per cent) and the marine business (up 12 per cent). The contract backlog at the year end was £10.4bn.
Given UK defence delivered over 60 per cent of the company’s revenue in the year, Babcock is well positioned to benefit from rising domestic defence spending. The UK now expects to spend 5 per cent of GDP on national security by 2035 amid pressure from the US and Nato.
Underlying operating profit rose 17 per cent (excluding a £90mn one-off contract loss last year) in the year to £363mn, and the respective margin climbed from 5.4 per cent to 7.5 per cent.
On the balance sheet side of things, net debt (excluding leases) more than halved to £101mn on free cash flow of £153mn, sending the leverage ratio down to just 0.3 times.
While the defence spending environment supports attractive growth prospects, the shares now trade at 20 times forward consensus earnings for 2026. They have more than doubled this year and enjoyed a double-digit rise on results day. Hold. Last IC view: Buy, 529p, 13 Nov 2024.
(Source: Investors Chronicle)
24 Jun 25. AeroVironment, Inc. (NASDAQ: AVAV) (“AeroVironment” or the “Company”) reported today financial results for the fiscal fourth quarter and year ended April 30, 2025.
“AeroVironment finished out fiscal year 2025 with a remarkable fourth quarter, which included record revenue, significantly higher profits and a robust backlog nearly double that from fiscal year 2024,” said Wahid Nawabi
Share
Fourth Quarter and Fiscal Year Highlights:
• Record fourth quarter revenue of $275.1m and fiscal year revenue of $820.6, up 40% and 14% year-over-year, respectively
• Fourth quarter and fiscal year net income of $16.7m and $43.6m, respectively and record fourth quarter and fiscal year non-GAAP adjusted EBITDA of $61.6m and $146.4m, respectively
• Record fiscal year bookings of $1.2bn
“AeroVironment finished out fiscal year 2025 with a remarkable fourth quarter, which included record revenue, significantly higher profits and a robust backlog nearly double that from fiscal year 2024,” said Wahid Nawabi, AeroVironment chairman, president and chief executive officer. “The investments we’ve consistently made in our multi-generational Uncrewed Systems and Loitering Munition Systems products coupled with our strong execution, continue to pay off, as evidenced by significantly higher demand and key strategic wins leading to a record $1.2bn in total bookings throughout this fiscal year.”
Nawabi continued, “Our acquisition of BlueHalo further advances our leadership position within the defense-technology sector by adding a complementary portfolio of innovative products and capabilities aligned to our customers’ highest priorities. With integrated solutions across every domain of modern warfare, enhanced innovation and domestic manufacturing scale, we believe we are well positioned to meet the rising demand across the globe and drive strong growth and value creation in fiscal year 2026 and beyond.”
FISCAL 2025 FOURTH QUARTER RESULTS
Revenue for the fourth quarter of fiscal 2025 was $275.1m, an increase of 40% as compared to $197.0m for the fourth quarter of fiscal 2024, primarily due to higher product sales of $77.6m. From a segment standpoint, the year-over-year increase was due to revenue increases in Loitering Munitions Systems (“LMS”), MacCready Works (“MW”) and Uncrewed Systems (“UxS”) of 87%, 24% and 9%, respectively.
Gross margin for the fourth quarter of fiscal 2025 was $100.3m, an increase of 33% as compared to $75.6m for the fourth quarter of fiscal 2024, reflecting higher product margin of $26.9m, partially offset by lower service gross margin of $2.3m. Gross margin in the fiscal 2025 fourth quarter was negatively impacted by an accelerated intangible amortization expense of $4.6m, resulting from a decrease in forecasted results of the Uncrewed Ground Vehicle (“UGV”) business. As a percentage of revenue, gross margin fell to 36% from 38%, primarily due to the UGV accelerated intangible amortization expense.
Impairment of goodwill for the fourth quarter of fiscal 2025 was $18.4m resulting from a decrease in forecasted results of the UGV business unit. As part of the annual goodwill impairment analysis, the carrying value of the UGV reporting unit was determined to be above its fair value and an impairment was recorded.
Income from operations for the fourth quarter of fiscal 2025 was $13.8m as compared to $5.9 m for the fourth quarter of last fiscal year. The increase year-over-year was primarily due to an increase in gross margin of $24.7m and a decrease in research and development (“R&D”) expense of $10.2m, partially offset by the UGV goodwill impairment of $18.4m and an increase in selling, general and administrative (“SG&A”) expense of $8.6m, which includes an increase of $5.2m of acquisition related expenses resulting from our acquisition of BlueHalo, which closed on May 1, 2025.
Other loss, net, for the fourth quarter of fiscal 2025 was $0.7m, as compared to $1.5m for the fourth quarter of last fiscal year.
Provision for income taxes for the fourth quarter of fiscal 2025 was $0.2m, as compared to benefit from income taxes of $(1.8)m for the fourth quarter of last fiscal year.
Net income for the fourth quarter of fiscal 2025 was $16.7m, or $0.59 per diluted share, as compared to $6.0m, or $0.22 per diluted share, in the prior-year period, respectively. The fourth quarter of fiscal 2025 was negatively impacted by non-cash UGV goodwill impairment charges of $18.4m, or $0.65 per diluted share.
Non-GAAP adjusted EBITDA for the fourth quarter of fiscal 2025 was $61.6m and non-GAAP earnings per diluted share were $1.61, as compared to $22.2m and $0.43, respectively, for the fourth quarter of fiscal 2024.
BACKLOG
As of April 30, 2025, funded backlog (defined as remaining performance obligations under firm orders for which funding is currently appropriated to us under a customer contract) was $726.6m, as compared to $400.2m as of April 30, 2024. Bookings (defined as firm orders entered into) during the fiscal year ending April 30, 2025 were $1.2bn.
FISCAL 2026 — OUTLOOK FOR THE FULL YEAR
For fiscal year 2026 inclusive of the projected results of the BlueHalo acquisition, which closed May 1, 2025, the Company expects revenue of between $1.9bn and $2.0bn, non-GAAP adjusted EBITDA of between $300m and $320m, and non-GAAP earnings per diluted share, which excludes amortization of intangible assets, other non-cash purchase accounting expenses and equity securities investments gains or losses, of between $2.80 and $3.00.
The Company cannot provide a reconciliation to GAAP net income or earnings per diluted share without unreasonable efforts due to the size and complexity of the BlueHalo acquisition and the inherent difficulty of forecasting the amortization of acquired intangibles and purchase price adjustments. Amortization expense of intangibles acquired in the BlueHalo transaction for the fiscal year ending April 30, 2026, which is expected to be significant, will be materially impacted by the valuation of the intangibles. Due to the size, complexity and timing of the acquisition, the Company has not completed the valuation of the intangibles and cannot estimate the amortization expense with a reasonable degree of accuracy, and the Company believes such reconciliation could imply a degree of precision that might be confusing or misleading to investors.
The foregoing estimates are forward-looking and reflect management’s view of current and future market conditions, subject to certain risks and uncertainties, including certain assumptions with respect to our ability to efficiently and on a timely basis integrate acquisitions, obtain and retain government contracts, changes in the timing and/or amount of government spending, react to changes in the demand for our products and services, activities of competitors, changes in the regulatory environment, and general economic and business conditions in the United States and elsewhere in the world. Investors are reminded that actual results may differ materially from these estimates and investors should review all risks related to achievement of the guidance reflected under “forward-looking statements” below and in the Company’s filings with the Securities and Exchange Commission. (Source: BUSINESS WIRE)
23 Jun 25. Denel’s fragile recovery under scrutiny as company posts first profit in nearly a decade. State-owned defence manufacturer Denel has reported an unaudited profit of R223m for the 2024/25 financial year, its first since 2016, as it outlines a cautious recovery strategy.
The company’s Group CEO, Tshepo Monaheng, presented Denel’s turnaround plan to Parliament’s Joint Standing Committee on Defence (JSCD) on 20 June, amid sharp scrutiny over years of financial mismanagement and strategic decline.
According to Denel, for the 2024/25 financial year, revenue stood at R1.3bn, well below the R8.4bn high it achieved in 2015/16. He confirmed the company is still managing over R700m in outstanding creditor debt and continues to battle liquidity constraints.
Monaheng reported that during the 2023/24 financial year, R1.4bn orders were placed with Denel, and this increased to R4.3bn in 2024/25. “If we continue on this trajectory, we should realise the Denel we want. This is dependent on the happiness of the customers. We are ready to get more orders. We hope to continue on this trend.”
Denel’s performance has been severely compromised since 2016 by governance failures, the effects of state capture, and the collapse of internal systems. Since April 2025, Denel has fallen under the shareholder control of the Department of Defence and Military Veterans, marking a shift from its previous position under the Department of Public Enterprises.
Monaheng told MPs the company is stabilising, but its position remains precarious. “We are fighting for Denel’s life daily,” said Monaheng. “We stretch every rand. Liquidity is our biggest constraint, and though we’ve made progress, it’s far from resolved.”
Denel has received over R10.15bn in government bailouts since 2019, including recapitalisation and a R4.4bn guarantee facility, R1.2bn of which is currently ringfenced. Monaheng confirmed that Denel would submit a full breakdown of how these funds were used, noting that a significant portion went toward settling debt, unpaid salaries, and restoring limited operational capacity. He added that conditions attached to the current R1.2 bn tranche were being met, with the major stipulation now being that Denel must demonstrate long-term sustainability.
Phased Recovery, Core Mandate, and Export Push
In its official presentation, Denel detailed a three-phase turnaround strategy:
• Stabilisation: Debt restructuring, downsizing, system overhauls, and governance reforms, with Section 189 retrenchments reducing the workforce drastically.
• Recovery: Divisions such as Aerospace and Overberg Test Range (OTR) have exited “ICU” status. Pretoria Metal Pressings (PMP) is ringfenced and in the process of resuming operations. Other divisions are being revived.
• Growth: A strategic focus on high-potential systems such as artillery, precision-guided munitions, and integrated defence platforms. Export revenue is targeted to exceed 60 percent of total income to reduce dependence on the constrained South African National Defence Force (SANDF) budget.
Denel reaffirmed its constitutional mandate to design, develop, and manufacture key defence materiel for the South African National Defence Force, especially in areas where sovereignty and strategic capability are at risk. Current operations are prioritised to support the SANDF’s landward systems, air assets, and missile programmes.
The company’s key international projects include an R15 bn artillery contract in the Middle East, support contracts in India, and interest in advanced air defence systems in Southeast Asia.
Missed Opportunities and Brain Drain
Monaheng confirmed that Denel lost a major contract (for Umkhonto missiles) with Egypt after failing to secure financial guarantees in time. “We had the skills, we had the plan, but without guarantees, Egypt walked away,” he said. “Immediately after that, many of our engineers resigned. That was a major blow to Denel Dynamics.”
He also acknowledged the loss of the Cheetah C-RAM missile system to EDGE Group in the UAE, a query raised by committee member Carl Niehaus, who raised further questions regarding the status of PMP. The Cheetah system, reportedly developed at Denel before its collapse, is now in use under a foreign flag, and was a key display at the EDGE Group stand at IDEX 2025. The Special Investigating Unit (SIU) is currently examining possible IP theft and has received Denel’s full cooperation.
Hoefyster and PMP: Projects of National Concern
Denel confirmed that the long-delayed Project Hoefyster, for the Badger infantry fighting vehicle, is progressing slowly. Phase 1, the development phase, is now expected to reach full milestone completion by March 2026. Phase 2 production planning will depend on agreements between Armscor and the Department of Defence. “We do have engineering capacity to complete Phase 1,” said a senior manager. “Phase 2’s shape and timeline are under review.”
At PMP, operations are set to resume by mid-July after a R170 m capital injection. Acting General Manager Justice Nhlapo confirmed the delivery of key input materials and stated that recruitment is underway to restore lost manufacturing capability. Succession plans include training younger personnel alongside re-engaged veteran workers.
Minority Stakes and Strategic Control
Denel currently holds minority stakes in three strategic joint ventures:
• Rheinmetall Denel Munition (RDM) – 49 percent
• Hensoldt South Africa – 30 percent
• Barij Dynamics (UAE) – 49 percent
Only RDM is currently profitable, having paid R100 m in dividends in the past year. Denel sits on all three boards and is conducting a review to determine whether to regain majority control or renegotiate its participation. “We’re asking whether being minority shareholders is in the country’s interest,” Monaheng said. “The new Denel strategy, starting in July, will address this.”
Progress on missile deliveries and development
Denel’s presentation did however reveal some good news, notably concerning deliveries of the A-Darter under Project KAMAS, potential export orders for the Ingwe anti-tank missile and development of the Joint Strike Missile, previously known as the Marlin Beyond-visual-range-air-to-air-missile (BVRAAM).
Although delayed by three years, Denel has concluded deliveries of eight practice inert A-Darter missiles, along with the first four of 21 acquisition trainer missiles. Further, the delivery of the first four operational missiles is expected soon, in July 2025. The standing order is for 41 operational missiles, meant to equip the SAAF Gripen fighter jets for short-range air-to-air engagements.
Committee Members Demand More Transparency and Delivery
Committee member Chris Hattingh criticised the presentation as “more about Denel’s lost potential and dreams than its current capacity.” He requested a detailed account of how bailout funds were spent, whether contract obligations have been met, and what Denel needs to fully resume its original role as prime contractor for SANDF landward platforms.
“There are major implications when key SANDF vehicle maintenance is outsourced to foreign suppliers,” said Hattingh. “We need to know the cost of restoring full-spectrum responsibility to Denel, both financially and operationally.”
Break-even by 2028, Investment in New Tech
Denel’s corporate plan forecasts breakeven by 2027/28. R&D investment will focus on modernising ageing missile systems, vertical-takeoff UAVs, satellite technologies, and advanced cyber defence platforms. The CEO also confirmed that a new integrated ICT system will be implemented by mid-2026 to address persistent audit failures and improve data quality.
“We are working to modernise our product suite to reflect today’s battlefield realities,” Monaheng said. “Without investment in innovation, Denel won’t survive. But we also need to re-establish trust, with government, the market, and our own people.”
Denel’s leadership has set out a clear, if fragile, path to recovery. But committee members remain unconvinced that strategic intentions are matched by tangible progress. With trust still strained and Denel’s critical capabilities under threat, the company must now deliver—on contracts, on transparency, and on its national mandate.
The committee has requested written follow-ups on the use of bailout funds, progress on Project Hoefyster, and Denel’s role in joint ventures. Further oversight sessions are expected before the end of the 2025 parliamentary calendar. (Source: https://www.defenceweb.co.za/)
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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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