26 Mar 10. A downgrade to “sell” from its house broker sent Qinetiq sinking on Friday as the London market turned negative for the first day in four. Analysts at UBS, which managed the part privatisation of the defence research group in 2002, said investors were underestimating the likelihood of a rights issue. Leo Quinn, the new chief executive, needs to deliver a big restructuring at a strategic review due in May, analyst Avi Hoddes said. However, the cost of redundancies is likely to push Qinetiq close to its debt covenant levels, leaving no cash to pay a dividend, he said. With trading unlikely to improve and a gross pension liability of £700m to consider, a fundraising cannot be discounted, UBS said. “Were Qinetiq to decide to raise equity, given a market capitalisation of circa £1bn, it would likely create material dilution for current shareholders.” Qinetiq lost 4.5 per cent at 135p on more than twice the average daily volume. The wider market drifted, with the FTSE 100 closing down 24.63, or 0.4 per cent, to 5,703.02. The index, which hit a new 21-month high on Thursday, ended the week up 0.9 per cent. (Source: FT.com)
25 Mar 10. Celebrations at the Residence of the British Ambassador to Norway last night marked the establishment of Marshall SV Norway. At a reception hosted by the Ambassador, Mr David Powell, guests from the Norwegian defence organisations and Norwegian defence industry joined with Sir Michael Marshall, Chairman of the Marshall of Cambridge Group, and the Ambassador to welcome the new business.
During the celebrations Sir Michael Marshall said, “We are proud to be here in Norway, which has such long ties with United Kingdom, to support the establishment of Marshall SV Norway as it builds on the major offset opportunities which have become available since we supplied our mobile hospitals and operating theatres.”
Mr David Powell commented, “Norway has much to offer to British companies and I am delighted to see Marshall establishing its new entity and showing commitment to the country, after it has done so well on supplying and supporting the field hospitals now in service with the Norwegian Defence Forces. The new organisation is a tangible commitment by the company to meeting its offset liability.” Marshall SV Norway will provide in-country support for the hospitals and co-ordinate support to deployed units including arranging training, support and maintenance to ensure that the facilities are kept to the highest levels of quality expected of medical units. Wherever possible much of this work will be contracted to Norwegian companies. As part of its wider offset activities Marshall, through Marshall Land Systems – Marshall SV Norway’s parent, will be partnering with other Norwegian companies to assist them in marketing their services to the UK and in some circumstances, other parts of the world. Amongst these are CSI, who manufacture deployable camp infrastructure; LENCO, a leading supplier of integration software; Nordic Power who are developing fuel cell generator technology, NODIN suppliers of medical CASEVAC and MEDIVAC solutions and MRE, who develop and manufacture medical patient care solutions. The company has opened its new office close to Torp airport at the newly constructed Hangarveien buildings, from where there is good access to road, rail and air transport facilities across Norway and to the rest of Europe.
23 Mar 10. Babcock International Group: Acquisition of VT Group. Babcock and VT announced (23 Mar 10) that they have reached agreement “on the terms of the recommended acquisition by Babcock of all of the issued and to be issued share capital of VT”. The terms of the acquisition value VT’s share capital at approximately £1,326m while VT shareholders will receive 361.6 pence and 0.701 New Babcock shares for each VT share.
Comment: The combined company had revenue of £3,000m in 2009 (Babcock £1,900m and VT £1,100m) which was 65% Defence related. 80% of revenue was generated