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16 Aug 18. Boeing [NYSE: BA] will acquire Millennium Space Systems, a provider of agile, flight-proven small-satellite solutions, under an acquisition agreement that will expand Boeing’s satellite and space portfolio, talent and capabilities.
“Millennium Space Systems’ expertise in vertically-integrated small-satellite solutions perfectly complements Boeing’s existing satellite portfolio, and will allow us to meet the needs of a diverse customer set,” said Leanne Caret, president and CEO of Boeing Defense, Space & Security. “We look forward to incorporating Millennium Space Systems’ end-to-end mission solution capabilities into our service offerings in satellite operations and data solutions.”
Millennium Space Systems was founded in 2001 and is based in El Segundo, Calif. With approximately 260 employees, the company has developed high-performance satellites for exacting missions ranging from 50 KG to more than 6,000 KG.
“I am proud of the talented and dedicated team we’ve built at Millennium Space Systems over the past 17 years,” said Stan Dubyn, CEO of Millennium Space Systems. “By combining our tools, talent, technologies and culture, we’ll be able to do even more incredible things as part of Boeing.”
The acquisition, which is subject to customary conditions, is expected to close by the end of third quarter 2018. Once finalized, Millennium Space Systems will become a Boeing subsidiary, operating under its current business model and reporting to Mark Cherry, vice president and general manager of Phantom Works. The terms of the agreement were not disclosed. The transaction will have no impact on Boeing’s 2018 financial guidance or the company’s commitment to returning approximately 100 percent of free cash flow to shareholders.
16 Aug 18. The first ever dedicated incubator and start-up services for entrepreneurs, professionals and enthusiasts within the drone industry were launched today by SUAS Global the world’s largest online drone network. Formed in 2015, and having doubled in size in the last six months alone, SUAS (Surface, Underwater, Air and Space) is providing expertise, connectivity and support to meet the challenges, speed of change and innovation for an industry which is spawning many start-ups and young businesses in one of the world’s fastest growth sectors.
The new services from SUAS will provide a strong catalyst for even faster growth by providing access to information, experts, finance facilities, business opportunities and special interest groups, and assisting young companies to achieve their full potential. Members of SUAS Global will receive a range of benefits with a variety of membership categories tailored to meet their various needs. They will be eligible to receive exclusive privileges from some of the industry’s leading suppliers in addition to obtaining access to SUAS Global’s new tender intelligence and support system, which guides, educates and prepares young drone companies and entrepreneurs to maximise their chances of securing new business opportunities. The services also include support in finding suitable and appropriately skilled employees through its new dedicated SUAS recruitment platform.
Community and collaboration are central features of the SUAS Global experience, with the network designed to give members a voice to lead and shape discussions into the most crucial issues affecting the global drone industry. This has been built into the very fabric of SUAS Global through The Voice, its new, dedicated, open e-forum and knowledge hub. The Voice is completely free to join and uses the extensive SUAS Global network to enable stakeholders to have their voice heard through surveys, polls, discussions and the ability to write white papers for independent peer review and possible publication. SUAS Global encourages all its members to become thought leaders, with output made directly available to standards makers such as the British Standards Institution (BSI) as well as regulators and global think tanks.
SUAS Global was recently acquired by Drone Major Group Limited*, the world’s first global commercial organisation dedicated to connecting, supporting and trading with all stakeholders in the drone industry. In 2017, Drone Major established the first online platform showcasing the world’s leading and specialised suppliers of drones. In particular, the company helps buyers of drones to navigate the widening applications for drone technology, advising on what is possible, where to buy it, and how to implement it safely and effectively.
Commenting on SUAS Global’s new services, Robert Garbett, Founder and CEO of Drone Major Group, said: ‘It has long been an ambition of Drone Major Group to provide a platform to support new entrants to the drone industry and I am excited that this has now become a reality. It is essential to support emerging drone companies and their young entrepreneurs who represent the future of our industry and will have such an impact on our world in the future; I very much look forward to working closely with our growing number of SUAS Global members to continue to help shape the industry for the benefit of all’.
16 Aug 18. Elbit Systems Ltd. (NASDAQ: ESLT and TASE: ESLT), (the “Company”) the international high technology company, reported today its consolidated results for the quarter ended June 30, 2018.
Management Comment: Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, commented: “We are pleased with the second quarter year over year revenue growth of 9%, while maintaining the 10% year over year growth in our backlog. This quarter, in particular, we see the fruits of our prior investment in Cyberbit. In line with our strategy of partnering with strategic investors to aid in the development of our commercial businesses, we had this quarter a $30 m external investment in Cyberbit. We believe that Cyberbit will further develop its business together with our new partner. Furthermore, our strategy of enhancing organic growth with synergistic acquisitions continues. The results of this quarter for the first time include those of Universal Avionics Systems Corporation, a company we acquired that is active in the field of commercial avionics. This acquisition is part of our strategy of strengthening our footprint in this business area. Our combined portfolio will create strong synergies that we believe will ultimately generate further growth opportunities for us.”
Second quarter 2018 results:
Revenues in the second quarter of 2018 were $892.2m, as compared to $818.3m in the second quarter of 2017.
Non-GAAP (*) gross profit amounted to $254.8m (28.6% of revenues) in the second quarter of 2018, as compared to $248.3m (30.4% of revenues) in the second quarter of 2017. GAAP gross profit in the second quarter of 2018 was $250.0m (28.0% of revenues), as compared to $242.3m (29.6% of revenues) in the second quarter of 2017. The gross profit margin was affected by the mix of projects sold in the quarter.
Research and development expenses, net were $76.6m (8.6% of revenues) in the second quarter of 2018, as compared to $67.1m (8.2% of revenues) in the second quarter of 2017.
Marketing and selling expenses, net were $69.9m (7.8% of revenues) in the second quarter of 2018, as compared to $66.3m (8.1% of revenues) in the second quarter of 2017.
General and administrative expenses, net were $37.0m (4.2% of revenues) in the second quarter of 2018, as compared to $33.6m (4.1% of revenues) in the second quarter of 2017. The lower expenses in the second quarter of 2017 resulted from revaluation of liabilities related to assets and activities acquired in prior years.
Other operating income, net in the second quarter of 2018 amounted to $45.4m. This was the result of net gains related to valuation of shares in two of our Israeli subsidiaries in the cyber and medical instrumentation areas, due to third party investments.
Non-GAAP(*) operating income was $73.1m (8.2% of revenues) in the second quarter of 2018, as compared to $82.7m (10.1% of revenues) in the second quarter of 2017. GAAP operating income in the second quarter of 2018 was $111.8m (12.5% of revenues), as compared to $75.3m (9.2% of revenues) in the second quarter of 2017.
Financial expenses, net were $10.7m in the second quarter of 2018, as compared to $6.8m in the second quarter of 2017. The increase in financial expenses in the second quarter of 2018 was mainly a result of higher level of debt and increased libor interest rates.
Taxes on income were $7.3m (effective tax rate of 7.6%) in the second quarter of 2018, as compared to $10.3m (effective tax rate of 15.1%) in the second quarter of 2017. The effective tax rate is affected by the mix of the tax rates in the various jurisdictions in which the Company’s entities generate taxable income and other income that is not part of the taxable income.
Other expenses, net in the second quarter of 2018 amounted to $5.1m. This was the result of an adjustment to the fair value of our investment in an Israeli subsidiary.
Equity in net earnings of affiliated companies and partnerships was $3.3m (0.4% of revenues) in the second quarter of 2018, as compared to $4.8m (0.6% of revenues) in the second quarter of 2017
Net income attributable to non-controlling interests was $0.1m in the second quarter of 2018, as compared to $0.4m in the second quarter of 2017.
Non-GAAP(*) net income attributable to the Company’s shareholders in the second quarter of 2018 was $57.5m (6.5% of revenues), as compared to $68.8m (8.4% of revenues) in the second quarter of 2017. GAAP net income in the second quarter of 2018 was $91.9m (10.3% of revenues), as compared to $62.6m (7.6% of revenues) in the second quarter of 2017.
Non-GAAP(*) diluted net earnings per share attributable to the Company’s shareholders were $1.35 for the second quarter of 2018, as compared to $1.61 for the second quarter of 2017. GAAP diluted earnings per share in the second quarter of 2018 were $2.15, as compared to $1.46 for the second quarter of 2017.
The Company’s backlog of orders for the quarter ended June 30, 2018 totaled $8,065m as compared to $7,329m as of June 30, 2017. Approximately 74% of the current backlog is attributable to orders from outside Israel. Approximately 55% of the current backlog is scheduled to be performed during 2018 and 2019.
Operating cash flow used in the six months ended June 30, 2018 was $1.1m, as compared to $2.7m provided in the six months ended June 30, 2017.
15 Aug 18. UK engineer Cobham says Financial Conduct Authority drops probe. Britain’s Cobham (COB.L) said that the Financial Conduct Authority (FCA) had dropped an investigation started last year into the aerospace and defence firm’s handling of inside information ahead of a rights issue announcement.
“The company has fully co-operated with this investigation throughout,” Cobham said in a statement on Wednesday. “The FCA has informed the company that it has decided to discontinue the investigation.”
Known for its air-to-air refuelling technology, the engineering company has been in recovery mode since a string of profit warnings forced it into the £500m ($633m) rights issue in 2017. Shares in FTSE 250 company Cobham, which has this year been hit by additional costs to complete its work on Boeing’s troubled KC-46 aerial refuelling programme, traded up 0.7 percent to 126 pence after the news that the FCA had dropped its probe. The FCA investigation had related to Cobham’s compliance with listing, disclosure and transparency rules and market abuse regulations between April 2016 and February 2017. (Source: Reuters)
15 Aug 18. CAE revenues spike following strong simulator shipments. CAE remains on track to reach its full-year targets despite a long-running industrial dispute at its Montreal facility, Marc Parent, the company’s CEO, announced during a call with analysts on 14 August. The integrated training services provider reported strong revenue and profit increases during the second quarter. This included progress in its defence division and its civil unit, which shipped 26 simulators during the first half of the year. “The market continues to be strong, so we feel good about the outlook,” said Parent. Defence division revenues and operating income stood at USD206.6m and USD16.6m respectively during the three months ended 30 June 2018. (Source: IHS Jane’s)
15 Aug 18. RADA Electronic Industries Ltd. – A leader in the development, production and sale of tactical land radar for force and border protection announced today its financial results for the quarter ended June 30, 2018.
Dov Sella, RADA’s Chief Executive Officer commented, “We are very pleased with our financial performance, especially our growth in revenues and our strongly broadening pipeline of potential orders. Furthermore, the investments we have made in our newly established presence in the United States are enabling us to make some significant strategic progress and has led to increased traction for our radars in the region. We expect our presence will lead to strong growth in orders in the coming quarters.”
Rada’s Multi-mission Hemispheric Radar (MHR) has been recently down-selected as part of the Leonardo DRS mission equipment package (MEP) solution for the US Army’s Initial Maneuver-Short Range Air Defense (IM-SHORAD) capability.
Continued Mr. Sella, “For the year 2018, we expect revenues of around $27m, ahead of last year’s revenue, which itself was one of the strongest years ever for RADA. While last year’s significant step up in revenue was built on the back of one specific order in the second half of the year, in 2018 it is made up of orders from a diverse range of customers. Some of these are initial radar orders from new customers with the possibility of follow-on orders at a ten-fold potential. As we move through 2018, I am increasingly excited with regard to our future and I am very happy that RADA is beginning to realize its large inherent potential.”
2018 Second Quarter Summary
Revenues totaled $6.6m in the second quarter of 2018, up 24% compared to revenues of $5.3m in the second quarter of 2017. Gross Profit totaled $2.4m in the second quarter of 2018 (gross margin of 36.2%) compared to gross profit of $1.7m (gross margin of 31.3%) in the second quarter of 2017.
Operating income was $104,000 in the second quarter of 2018 compared to an operating income of $511,000 in the second quarter of 2017. Operating expenses increased in the quarter to $2.3m from $1.2m in the second quarter of last year, primarily due to increased investment in R&D and SG&A, due to RADA’s recently established presence in the United States.
Net income attributable to RADA’s shareholders in the second quarter of 2018 was $50 thousand, compared with net income of $495,000 in the second quarter of 2017.
EBITDA was $546,000 in the second quarter of 2018 compared to EBITDA of $838,000 in the second quarter of 2017.
In terms of liquidity and capital resources, as of June 30, 2018, the Company had cash and cash equivalents, of $15.6m or $0.47 per share, compared with $12.4m or $0.40 per share as of December 31, 2017. As of June 30, 2018, the Company did not have any financial liabilities. Cash flow from operations for the quarter was a positive $2.5m, mainly due to strong collections from customers.
15 Aug 18. DSME posts declines in sales and profits. South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME) posted major decreases in sales and profits during the second quarter of fiscal year 2018/19, it announced on 14 August. The company said in a statement to the Korean Stock Exchange that its total sales in the quarter ending 30 June were KRW2.32trn (USD2bn), a year-on-year decline of 33%. Net profit tumbled from KRW1.25trn in the second quarter last year to KRW206.24bn. DSME attributed the decline in profits to one-off gains it made last year by converting corporate bonds into shares. DSME is at the forefront of South Korea’s naval shipbuilding capabilities, and the company is currently involved in the construction of several major platforms for the Republic of Korea Navy including KSS-III-class diesel-electric submarines. (Source: IHS Jane’s)
14 Aug 18. Thales and Gemalto announce Regulatory Clearance from the Minister of Innovation in Canada. Reference is made to the joint press release by Thales (Euronext Paris: HO) and Gemalto (Euronext Amsterdam and Paris: GTO) dated 27 March 2018 in relation to the launch of the recommended all-cash offer by Thales for all the issued and outstanding shares of Gemalto (the “Offer”), the publication of the Offer Document, and the joint press release of Thales and Gemalto dated 10 August 2018 in relation to the further extension of the Acceptance Period. Terms not defined in this press release will have the meaning as set forth in the Offer Document. Thales and Gemalto today announce that they have received foreign investment Regulatory Clearance in Canada. Together with the anti-trust clearance obtained in China and Israel, and clearance relating to foreign investments in Australia, Thales and Gemalto have obtained 4 of the required 14 Regulatory Clearances. (Source: IHS Jane’s)
14 Aug 18. US tightens investment regulations. US President Donald Trump has signed the Foreign Investment Risk Review Modernization Act (FIRRMA) into law, which introduces reforms that will allow the government to apply national security reviews to foreign investment. Part of the FY2019 National Defense Authorization Act that has just come into force, FIRRMA aims to strengthen and modernise the position of the Committee on Foreign Investment in the United States (CFIUS), which is responsible for carrying out checks regarding the national security effects of foreign investments into the United States. CFIUS’ jurisdiction will now cover minority investments, any changes in a foreign investor’s rights regarding a US business, any vehicle designed to evade the committee, and the purchase, lease or concession of certain properties by or to a foreign national.
14 Aug 18. Indian industry pledges corridor investment. Indian defence companies have pledged to invest about INR37bn (USD530m) in developing a defence-industrial corridor in the northern region of Uttar Pradesh. According to the Ministry of Defence (MoD) in New Delhi, the investment was announced by several state-owned and private-sector companies during a defence industry meeting in Uttar Pradesh on 11 August. Investments from state-owned companies include INR12bn from Hindustan Aeronautics Limited (HAL), INR10.7bn from the Ordnance Factory Board (OFB), and INR2.4bn from Bharat Electronics Limited (BEL). Private-sector investors include armour specialist MKU, land systems company Bharat Forge, and engineering group PTC Industries, which pledged INR9bn, INR2bn, and INR1.15bn respectively. (Source: IHS Jane’s)
13 Aug 18. Fincantieri bulks up with acquisition ahead of Naval Group partnership. Italian shipyard Fincantieri has bought a key Italian technology firm to gain extra clout ahead of a planned team-up with France’s Naval Group. State-controlled Fincantieri said Aug. 7 it was jointly taking control of Vitrociset, which employs 800 people and posted 2017 sales of €187m (U.S. $211m) from its training and support work in the defense, security, transport and space sectors. The shipyard will take over Vitrociset’s defense work, while its partner in the purchase, Italian firm Mer Mec, will assume control of its civil work. That leaves Fincantieri, which builds warships, submarines and cruise ships, in charge of Vitrociset’s aerospace work, including ground support work on the F-35 Joint Strike Fighter. The move triggered speculation in Italy that Fincantieri was bulking up to gain a stronger hand as it proceeds with cooperation talks with French shipyard Naval Group, given that Vitrociset is involved in automation, command and control, simulation, and testing work.
A company source played down the timing of the deal, saying: “Vitrociset simply makes us more complete.”
The announcement followed a visit to Rome on Aug. 1 by French Economy and Finance Minister Bruno Le Maire to discuss the Fincantieri-Naval Group talks, which started last year but slowed during the creation of a new, populist government in Italy in June. The new government in Rome has had a series of spats with Paris, starting with France’s reluctance to take in migrants who sail from Libya to Italy. The Italian government is also reluctant to move ahead on a new rail link between Italy and France, even though millions of euros have been spent on the program. And France and Italy are at loggerheads over lawless Libya, where the European nations back opposing sides in the slow-burning conflict. Tensions reached a peak last month when Italian Deputy Prime Minister Matteo Salvini openly said he did not want France to win the soccer World Cup, which it did. In June, Naval Group and Fincantieri handed their respective governments plans for possible industrial cooperation, a move seen by Fincantieri Chairman Giuseppe Bono as leading to an “Airbus of the sea,” seen as kick-starting a wider integration of the fractured European naval industry. Addressing Italy’s Parliament this month, Bono said he was also backing moves by the European Union to encourage joint spending among partners, effectively leading to pooled EU defense procurement from transnational European defense giants.
“Europe spends little and spends badly,” he said. “Everyone acts in the interest of their own nation; but if we concentrated, we could spend less but be more capable and more efficient.”
Fincantieri is already set to take over French civil shipyard STX, and at the start of the year, Bono said a French-Italian merger of naval work could occur within five to 10 years. However, Le Maire was cautious during his Rome visit, claiming “it would not be wise” to talk of a naval merger. Current plans go no further than a 10 percent share cross-holding, combined with pooling research, acquisition of material and teaming on export work to reduce competition. Naval Group avoids the use of the Airbus tag, which signals a high degree of industrial consolidation, and prefers to refer to closer cooperation. The cooperation plan is creating uncertainty over the role to be played by Italian and French firms Leonardo and Thales, which rely on selling their systems for their nations’ warships. Speculation that Leonardo would be sidelined in future joint ships built by Fincantieri and Naval Group increased with news of the Italian yard’s purchase of Vitrociset, although Bono promised that Leonardo’s involvement in the tie-up was “on the cards,” pointing out how it was an integral part of two offers of corvettes that Fincantieri was making to Romania and Brazil. Thales, which holds a 35 percent stake in Naval Group, also reportedly expressed caution about linking up Naval Group and Fincantieri, an Italian source told Defense News. This year, a leaked 36-page report from ADIT, a partially French state-owned company working in economic intelligence, painted a “highly negative” picture of the compliance and ethics of Fincantieri, a depiction which was challenged by Fincantieri.
“There is a lack of communication, a lack of figures,” according to Fabrice Wolf, a defense economics analyst. “This leads many to be concerned that this project is ideologically driven and that the realities of the industrial base are not fully taken into account.”
The main interest for Naval Group is to find work for its research office, which is the real reason for the FTI intermediate frigate program, he said. There is a “concern” elsewhere in French industry, notably at Thales, which sees its sale of radars and electronic systems under risk from Italian archrival Leonardo, Wolf added.
“Naval Group is a great partner for Thales and I hope that lasts,” said Thales CEO Patrice Caine, business daily Les Echos reported May 27. Thales is more than just a shareholder in Naval Group, as the former transferred its combat systems business to the latter in 2007 in exchange for a shareholding, he added. “When we build the FTI frigate with Naval Group, it’s like building the Rafale with Dassault — it’s a link up for life,” he said, pondering the intentions of an Italian government that pursues nationalism and a protectionist trade policy. Naval Group and Thales were unavailable for comment. The Italian pursuit of anti-immigration and anti-free trade seems to have struck a chord with U.S. President Donald Trump, who met Italian Prime Minister Giuseppe Conte at the White House on July 30 (Source: Defense News Early Bird/Defense News)
13 Aug 18. BAE Systems shares take-off as Morgan Stanley ups rating to ‘overweight’ from ‘equal-weight.’ Morgan Stanley’s analysts said: “The defence spending backdrop is supportive, contract wins have improved visibility and we think earnings growth prospects are now higher than at any point in the last five years.” They added: “The multiple has been slow to reflect this, and factoring in longer-term growth leads us to increase our target to 750p.” Morgan Stanley gave a boost to BAE Systems PLC (LON:BA.) on Monday, upgrading its rating for the blue-chip defence and civilian aircraft contractor to ‘overweight’ from ‘equal-weight’ following recent first-half results. The US investment bank also hiked its target price for the FTSE 100-listed firm to 750p from 550p, with the stock currently changing hands at 633.60p each, up 1.3% on Friday’s close. In a note to clients, Morgan Stanley’s analysts said: “The defence spending backdrop is supportive, contract wins have improved visibility and we think earnings growth prospects are now higher than at any point in the last five years. The multiple has been slow to reflect this, and factoring in longer-term growth leads us to increase our target to 750p.”
BAE’s interims, posted on August 1, were a mixed bag, with strong performances in some areas offset by disappointments in others. The group said its underlying earnings per share (EPS) for the full-year would be on a par with 2017 after it posted underlying EPS of 19.8p in the first half of 2018, down from 20.2p in the first half of last year. Its sales at £8.8bn, were down 3% year-on-year on a constant currency basis, as a result of reduced production activity for the Typhoon fighter jet. (Source: proactiveinvestors.co.uk)
13 Aug 18. Barclays downgrades Meggitt on valuation grounds. Analysts praised last week’s “very strong” first-half revenue growth and said margins have the potential to pick up, but they think the recent share price rise and more positive outlook make other stocks more appealing. Meggitt shares have jumped almost a third over the past four months. Shares in Meggitt PLC (LON:MGGT) dipped on Monday morning after the aerospace and defence engineer was downgraded by analysts at Barclays’ London arm on valuation grounds. Even with the recent fall back, the FTSE 250 company has still seen its value climb by almost a third since the beginning of April, thanks in part to new contract wins, which allowed it to upgrade its full-year guidance. In a note to clients, Barclays analysts called the 9% growth in organic revenue reported in last week’s first-half results as “very strong”, and suggested management might be conservative by not upgrading its forecasts once again. There is also scope for margins, which Barclays said were somewhat disappointing in the opening six months of the year, to pick up, given falling overheads, better purchasing power and improving “capital intensity”.
“However, we think this self-help potential as well as the current positive market outlook is now reflected in estimates and valuation,” read this morning’s research note. “We also continue to note MGGT’s lower exposure to the large jet market (~35% of revenues) vs. peers provides less potential for top-line-driven earnings growth.”
Analysts concluded: “We downgrade our rating to ‘equal weight’ (from ‘overweight’) with a 550p PT (up from 530p) & prefer Senior PLC (LON:SNR), where we see more top-line potential, and valuation and earnings aren’t based on self-help.”
Meggitt shares were down 0.6% to 539.6p in mid-morning trading. (Source: proactiveinvestors.co.uk)
13 Aug 18. Hanwha targets defence expansion. South Korean conglomerate Hanwha has announced plans to invest KRW4trn (USD3.5bn) in expanding its aerospace and defence business over the next five years. The group said on 12 August that the fiscal outlay is part of a KRW22trn investment programme intended to enable Hanwha to reach a “sales volume target” of KRW100trn by 2023. In 2016 and 2017, Hanwha’s group revenues were KRW47.1trn and KRW50.4trn respectively. In addition to aerospace and defence, Hanwha will also invest in expanding its oil and gas, alternative energy, hotels, and finance sectors. Hanwha added that the investment programme is the biggest in its 66-year history and is expected to result in the creation of 35,000 jobs by the end of 2022. (Source: IHS Jane’s)
10 Aug 18. Chemring Group PLC (“Chemring” or “the Group”) confirms that at approximately 5pm on Friday 10th August, an incident occurred in a flare manufacturing building at the Chemring Countermeasures (“CCM”) facility, near Salisbury. Tragically, one employee was fatally injured and another employee was badly injured and is currently receiving treatment in hospital. The emergency services attended the scene and the incident was quickly brought under control. A full and immediate investigation into the cause of the incident has been launched in co-operation with the local regulatory authorities. The incident caused damage to parts of CCM’s manufacturing operations. Production at the site is currently suspended and a detailed analysis of the possible impact of the incident on the Group’s financial prospects has begun. The impact on our 2018 and 2019 financial years cannot be accurately quantified at this stage as it will be dependent on insurance recoveries, the timeline for the investigation to be completed and the site to re-open, remediation work to be completed and at what rate production resumes.
CCM’s deliveries to customers in the final quarter of the financial year ending 31 October 2018 were previously expected to be £25m and to generate a contribution of £15m and the Group’s FY18 underlying operating profit is now likely to be approximately £10m – £20m lower than previous expectations, with a corresponding impact on the Group’s operating cash flow and net debt. A further update will be provided when the Group publishes its next trading statement, which is expected on 4 September 2018.
06 Aug 18. Yahsat Acquires Thuraya. Yahsat, a global satellite operator based in the UAE and wholly owned by Mubadala Investment Company, has completed the acquisition of a majority and controlling stake in Thuraya. Ali Al Hashemi, who has led Yahsat government solutions, Yahsat’s specialized unit fulfilling defense and government client requirements, has been announced as the new CEO of Thuraya, while former CEO Ahmed Al Shamsi will remain as advisor to the CEO. Al Hashemi will continue to be the general manager of Yahsat government solutions. Yahsat has also named Marcus Vilaa as Thuraya’s Chief Technical Officer. Marcus will continue his role in Yahsat as the CTO in addition to his newly announced role in Thuraya. Marcus brings more than 35 years of experience in the satellite industry. Shawkat Ahmed is appointed as Thuraya’s Chief Commercial Officer, succeeding Rashid Baba. Ahmed possesses more than 22 years of experience in satellite communications attained through occupying senior commercial leadership roles in Yahsat, Thuraya and Telstra V-Comm. The acquisition of the UAE’s first home grown satellite operator, Thuraya, is set to expand Yahsat’s current satellite solutions portfolio on commercial and government fronts as well as create a strong platform to capture the growing opportunity around IoT and M2M applications across both sectors.
Masood M. Sharif Mahmood, CEO of Yahsat, said that the Thuraya acquisition provides the company with an ideal opportunity to grow and diversify the firm’s business, bolstering Yahsat’s satellite solutions capabilities on both government and commercial fronts. By integrating the portfolios of the two companies, the companies, together, will be able to offer a comprehensive mobile and fixed satellite services portfolio. (Source: Satnews)
10 Aug 18. Rafael makes bid for Aeronautics. Israeli defence company Rafael has made a bid for unmanned systems developer Aeronautics, it has been revealed. In a disclosure to the Tel Aviv Stock Exchange (TASE) on 9 August, Aeronautics said it had received an offer valuing the company at ILS430m (USD116.6m) from Rafael and Israeli entrepreneur Avihai Stolero. The acquisition is subject to a range of due diligence and anti-trust approvals, according to Aeronautics, as well as the signing of a binding agreement. Should the acquisition be successful, Aeronautics will be delisted from the TASE and operate as a standalone company. Aeronautics manufactures a range of unmanned aerial vehicles (UAVs) and loitering munitions, notably with platforms such as the Orbiter family of UAVs and the Orbiter 1K loitering munition. The company also develops and sells the Dominator XP medium-altitude long endurance (MALE) UAV, based on the Diamond DA42 twin-engine utility aircraft. Significant exports of the company’s systems have included Azerbaijan, where UAVs are assembled through a joint venture with local industry, Romania, and Thailand. Since it was first listed on the TASE, Aeronautics has acquired US rugged electronics manufacturer Chassis Plans, which was completed in June. The acquisition of Chassis Plans has helped to expand the company’s presence in the United States, while also helping to bring some of the supply chain in-house. (Source: IHS Jane’s)
07 Aug 18. Meggitt faces battle to rein in costs. Meggitt’s (MGGT) transformation from a holding company into a leaner, more customer-focused business appears to winning over the engineer’s client base. Strip out the impact of asset sales and currency movements, and strong demand for civil aerospace, military and energy sector parts triggered a 9 per cent rise in revenues and an impressive 24 per cent surge in order intake in its first half. The next challenge Meggitt faces is converting top-line growth into profits. As previously flagged, the engineer incurred extra costs getting some of its previously acquired businesses up to speed – and capable of tackling higher volumes. The upshot was a 7 per cent fall in underlying operating profit to £151m. The group’s polymers and composites segment was mainly to blame for this unsavoury performance. The division was forced to hire and train new staff to meet demand for retrofit fuel tanks for Boeing’s F/A-18 and work closer with customers because, in the words of Meggitt’s chief Tony Wood, “composites are complicated”. Extra costs prompted management to guide for margins at the lower end of its targeted 17.7 per cent to 18 per cent range. Bank of America Merrill Lynch forecasts adjusted EPS of 33.7p for the full year, rising to 36.8p in 2019. IC View: The shares, up 20 per cent on our buy advice, now trade towards the top of their one-, three- and five-year trading ranges at 16 times forecast earnings. Further upside is unlikely, at least until management can prove that its target of achieving an underlying operating margin of at least 19.9 per cent by 2021 is feasible. Back to hold. Last IC View: Buy, 457p, 28 Feb 2018 (Source: Investors Chronicle)
10 Aug 18. Thales further extends the acceptance period of the offer for Gemalto and remains confident that the acquisition will be completed by year end 2018. Reference is made to the joint press release by Thales (Euronext Paris: HO) and Gemalto (Euronext Amsterdam and Paris: GTO) dated 27 March 2018 in relation to the launch of the recommended all-cash offer by Thales for all the issued and outstanding shares Gof emalto (the “Offer”), the publication of the Offer Document, and the joint press release of Thales and Gemalto dated 1 June 2018 in relation to the extension of the Acceptance Period until 15 August 2018. Terms not defined in this press release will have the meaning as set forth in the Offer Document. Thales and Gemalto confirm that pursuant to an exemption granted by the Dutch financial markets authority (AFM) on 9 August 2018, the Acceptance Period is further extended by Thales and will end two weeks after the fulfilment of the Offer Condition with respect to Regulatory Clearances or the waiver thereof (but no later than the Long Stop Date).
08 Aug 18. Firearms and outdoor products maker Vista jumps on outlook. Shares in Vista Outdoor surged higher on Thursday after reporting better than expected adjusted earnings in its first quarter and raising its forecast for the fiscal year despite the challenges facing its firearms business. Those difficulties, as well as the turnround plan the company has instituted, still resulted in falling revenues and profit from a year earlier and prompted Vista to cut its revenue outlook for the remainder of its 2019 fiscal year. However, it does see adjusted earnings and free cash flow as being better than previously forecast, owing to the pending sale of some of its eyewear assets and its strategic transformation plan. Vista operates brands ranging from binoculars and telescope maker Tasco to CamelBak, which produces a suite of drinking containers and bladders popular with hikers and distance runners. In early July, Vista announced it would sell a number of its sunglasses brands, including Bolle and Serengeti, in a deal that is expected to close in the current quarter and generate gross proceeds of $158m. The company said it expects to generate sales between $2.1bn and $2.16bn in the 2019 fiscal year, down from previous guidance for between $2.205bn and $2.265bn. That is also lower than the median forecast of $2.23bn among analysts surveyed by Thomson Reuters. Mike Lopez, chief financial officer, said the sales and EPS guidance were updated to reflect the impact of the pending eyewear sale. “[D]espite the ongoing shooting sports market softness and commodity headwinds, we have raised our EPS and free cash flow expectations given the success of our ongoing efforts to drive profitability and to generate cash,” he added. Earnings are now expected in a range of a loss of 76 cents to 56 cents a share, from previous guidance for a profit of 4 cents to 24 cents a share. But adjusted earnings are expected to be in the range of 15 cents to 35 cents a share, a 5 cent boost at both ends over previous forecasts. Also encouraging, Vista expects free cash flow between $70m and $100m in the fiscal year, a $15m improvement from previous expectations. In the first quarter, revenue fell 7 per cent from a year ago to $529m, which undershot market forecasts for $567.3m. The company reported a net loss of $247m, or of 91 cents a diluted share, compared to 29 cents a share a year ago. Adjusted earnings of zero, compared to 24 cents a year earlier, came in under analysts’ forecasts of 7 cents. Chris Metz, chief executive, said the first-quarter results “exceeded expectations despite continuing headwinds and market challenges” and that the company’s strategic transformation plan, announced in May, is “tracking well” and will enable Vista to “reinvest in our core product categories: ammunition, hunting and shooting accessories, hydration solutions, and outdoor cooking.” Vista, like many companies that produce firearms, came under pressure following a Florida high school shooting in February that stirred public debate about gun control. Vista shares were up 14 per cent to their highest level since February. (Source: FT.com)
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