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04 Nov 10. BAE Systems was accused of putting a “gun to the head of the government” after the publication of a letter by the aerospace and defence company to David Cameron setting out the consequences of halving an order for two aircraft carriers. Not only would there be no financial savings by scrapping one of the ships but three shipyards and 5,000 jobs could be lost, the company warned the prime minister in the run-up to the government’s strategic defence and security review. While the cost of delivering both carriers was £5.2bn, scaling this back to a single ship would still cost £4.8bn – plus at least £690m in “rationalisation” costs and a further termination liability. BAE had already invested £500m of shareholder funds in the programme, the company said. In the letter to the prime minister, dated October 5 and marked ”in strict confidence”, Ian King, BAE chief executive, laid out the implications of cancelling the second of the ships, HMS Prince of Wales. It would have meant the closure of all the company’s shipyards by 2012 – in Portsmouth, Scotstoun and Govan – with no further production work planned until
the start of a new frigate programme in 2016. (Source: FT.com)

04 Nov 10. Defence and aerospace components group Meggitt said it continued to trade in line with management expectations with an improved order intake. In its IMS for the period from July, Meggitt said third-quarter order intake was up 17% on 2009, which had been adversely affected by destocking and cancellations. There were increases in all market segments except the military aftermarket, although military orders in total were up. Meggitt said it had now seen double-digit increases in total orders in both Q2 and Q3. Cumulatively, order intake was 7% ahead of 2009, with civil orders up 27% and military orders down 8%, largely due to multi-year orders received in 2009. Revenues grew year-on-year by 1% in Q3, following falls of 10% and 2% in the first and second quarters respectively. The group said it was confident of further revenue growth in the fourth quarter and modest growth for the year.
Civil original equipment, civil aftermarket and energy revenues were ahead of last year in Q3. As expected, military revenues were down but military orders up 10% in the period, which was expected to translate into strong sales growth in the fourth quarter. Meggitt said the UK Strategic Defence and Security Review should have a minimal impact on military revenues. More importantly, US defence spending was still projected to grow at low single digits in the medium term. (Source: Google)

03 Nov 10. Italy’s largest defence and aerospace company Finmeccanica (SIFI.MI) on Wednesday said profit fell 12 percent in the first nine months of the year, as higher taxes offset lower financial charges. The company also reiterated its financial targets for the year. The Rome-based company, which assembles military jets and builds electronic warfare systems, reported profit of 321m euros for the nine-month period,
down from 364m a year earlier. Revenue rose 2.2 percent to 12.92bn euros, boosted by higher production at its helicopters and defence and security electronics unit. The company said its order backlog was enough to cover over 95 percent of expected production in the last three months of the year. Adjusted earnings before interest, taxes and amortisation fell 3 percent to 856m euros, dragged down by the performance at its aeronautics and energy units. Finmeccanica has been cutting costs and stepping up its focus on emerging markets like Brazil and India to offset a sluggish economy and weakness in defence spending in more mature markets elsewhere. (Source: Reuters)

04 Nov 10. Italy’s top defence and aerospace company Finmeccanica
(SIFI.MI) said orders could near 22bn euros in 2010, in line with its own
forecasts, driven by contracts from emerging markets. On a conference call with analysts on Thursday, the Rome-based company said orders for the year woul

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