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08 Nov 18. Inmarsat Group Limited reports Third Quarter Results 2018.
Operational highlights. Q3 2018 operational highlights:
• Group Revenue (ex Ligado) increased by $12.6m, or 3.9%, to $336.4m, continuing to reflect the combined strength of the Group’s diverse portfolio and the delivery of further strategic proof points
o Maritime: – Strong revenue and market share growth through Fleet Xpress (“FX”) in fast-growing, high value VSAT segment – FleetBroadband (“FB”) revenues declined, reflecting customer migration to FX and increased VSAT competition o Government: – Strong revenue growth, particularly from our non-US government business
o Aviation: – Strategic alliance with Panasonic to strengthen our drive for future global market leadership in IFC – Double digit revenue and EBITDA growth, with an improved margin outlook for FY 2018 o Enterprise: Best quarter so far this year, against a tough, event-driven, comparative • Group EBITDA increased by $10.1m
Investors Chronicle Comment: For the third quarter to September, Inmarsat’s (ISAT) revenues rose 3.7 per cent to $369m, while cash profits rose 6.8 per cent to $207m. Over nine months, group revenues rose 4.5 per cent to $1.09bn, with cash profits up 1.1 per cent to $580m. That said, maritime suffered a decline – with revenues down 5.7 per cent to $135m over three months, and down 1.4 per cent to $417m over nine months – something likely to have contributed to the shares’ 7 per cent mark-down in morning trading. Inmarsat gave updated 2018 guidance, noting revenues and cash profits for the full year (excluding Ligado) are expected to be “at least in line” with current market consensus (revenues: $1.3bn; cash profits: $0.61m).
08 Nov 18. Bombardier to cut 5,000 jobs and sell $684m of assets. Canadian plane and train manufacturer Bombardier said it planned to cut 5,000 jobs from its ranks and sell assets worth C$900m ($684m) over the next 12 to 18 months as part of plans to scale back its operations. At its third-quarter results, the company said it would sell its Business Aircraft training division, and associated royalties, to aviation training business CAE for C$800m. In addition it would also sell its ageing ‘Q series’ twin-engined turbo propeller airliners, and the de Havilland trademark they once carried to a subsidiary of Longview Aviation Capital in a deal worth C$300m. Both deals are expected to close in the second half of 2019 subject to regulatory scrutiny. Job losses will be across divisions and the company expects to create annual savings of C$250m once fully implemented by 2021. Chief executive Alain Bellemare said: “With today’s announcements we have set in motion the next round of actions necessary to unleash the full potential of the Bombardier portfolio”. The company also laid out its guidance for 2019, expecting revenues to rise by 10 per cent, and for earnings before interest and tax (excluding special items) to increase by 20 per cent, to between C$1.15bn and C$1.25bn. (Source: FT.com)
08 Nov 18. Rheinmetall reports robust business performance and further growth in profitability – Defence doubles order intake.
- Group sales stable year-on-year at €4,164m in the first three quarters
- Consolidated operating earnings up €21m at €252m
- Operating earnings margin for the Group grows from 5.5% to 6.1%
- Automotive increases sales to €2,199m and operating earnings to €193m – operating earnings margin climbs to 8.8% after nine months
- Defence posts increase in earnings of €15m to €75m with slight decline in sales to €1,966m
- Order intake in Defence virtually doubled
- Earnings per share rise from €2.40 to €3.59
With high-volume orders and higher consolidated operating earnings, the Düsseldorf technology group Rheinmetall AG is on the home stretch for fiscal 2018. The Group’s business performance over the first nine months of the fiscal year has been robust with improved profitability, while sales volumes have remained largely unchanged. Automotive continues to grow faster than the market and again contributed the larger share to consolidated earnings. At the same time, Defence again significantly increased its order backlog and its contribution to earnings.
The Group is slightly raising its forecast earnings margin for the current fiscal year, but simultaneously lowering its projection for sales growth due to a market environment beset by greater uncertainty.
Armin Papperger, CEO of Rheinmetall AG, said: “Rheinmetall is performing robustly and demonstrating its resilience to individual market disruptions. We are confident of further growth and a higher earnings margin. In our Defence sector we are benefiting from the growing backlog of demand for armed forces equipment and the need for military modernization in many countries of the world. In the Automotive sector we are making key contributions to fuel efficiency and emissions reductions, and increasingly to electromobility as well – and here too our pioneering technologies make us optimally poised to continue expanding our global market positions.”
Rheinmetall’s consolidated sales were on par with the previous year at €4,164m in the first nine months of 2018 (2017: €4,174m). Sales were up by 2.0% after adjustment for currency effects.
International markets accounted for 76% of sales (Q3 2017: 78%). In addition to the German market (24%), the key regions in terms of sales volumes were Europe excluding Germany (31%), followed by Asia (19%) and North and South America (13%).
Operating earnings rose by €21m or 9% to €252m in the first nine months of 2018 as against €231m in the previous year.
The Automotive sector and the Defence sector contributed €7m and €15m respectively to this improvement. Operating earnings fell by €1m in Others/Consolidation. The rise in earnings increases the Group’s operating earnings margin from 5.5% in 2017 to 6.1% in the reporting period. As a result of extraordinary effects, the growth in EBIT was particularly strong, climbing by 32% from €206m to €273m. In comparison to the previous year, non-recurring effects included both the sale of a property at the former production site in Hamburg (€30m) and restructuring expenses in the Electronic Solutions division of -€9m. In particular, EBIT for the same period of the previous year was squeezed by the cost of provisions on account of the closure of a plant in France.
Earnings per share thus grew from €2.40 to €3.59 in the reporting period.
The order backlog increased significantly thanks to new orders in the Defence sector. Rheinmetall had orders worth €9,315m on its books as of September 30, 2018, up from €7,234m as of September 30, 2017.
Automotive enjoys growth in all divisions and slightly higher profitability
Sales in the Automotive sector once again outperformed the market environment, rising to €2,199m in the first nine months of 2018 – equivalent to year-on-year growth of 2.3% or 4.5% adjusted for currency effects. By comparison, growth in the global production of light vehicles was significantly softer at 1.2%. All divisions once again contributed to the increase in sales. Operating earnings climbed by €7m to €193m in the first nine months. The sector’s operating earnings margin was up marginally to 8.8% (8.7%).
Sales in the Mechatronics division grew by 1.6% year-on-year to €1,233m in the first nine months of 2018 (2.7% after adjustment for currency effects). The Commercial Diesel Systems product range generated the strongest growth here. However, the division’s growth was muted by the further contraction of the diesel market in Western Europe. Operating earnings amounted to €128m after the first nine months of 2018, falling slightly short of the high level of the previous year of €130m.
The Hardparts division generated sales growth of 3.1% to €755m in the first nine months of 2018 (7.1% after adjustment for currency effects). Plain bearings outperformed the previous year with further growth in India, North America and in European business as well. Small-bore and large-bore pistons likewise bettered the previous year’s level. The division’s operating earnings rose to €50m in the first three quarters of 2018 (previous year: €46m).
The Aftermarket division increased its sales by 3.7% year-on-year to €281m in the first nine months of 2018 (6.1% after adjustment for currency effects). In particular, sales developed positively on the markets of Western and Eastern Europe and those of North and South America. The division’s operating earnings amounted to €26 m in the first three quarters of the reporting period after €25 m in the same period of the previous year.
In local currency, the sales of the joint ventures in China not included in the figures for the Automotive sector rose by 4.3% in the reporting period (7.9% adjusted for currency effects) to the equivalent of €661 m – in spite of a 4.7% contraction of the Chinese market.
Defence: Incoming orders at record level, operating earnings increased
The Defence sector virtually doubled its incoming orders year-on-year to €4,471m in the first three quarters of 2018. The strong growth in orders is a result of the activities of the Vehicle Systems division, where major orders worth around €2.5bn in total to deliver Boxer wheeled armored vehicles and military trucks to the Australian armed forces are a particular highlight. The order backlog thus climbed from €6,732m in the previous year to €8,787m.
Sales in the Defence sector declined by €59m or 2.9% to €1,966m in the first three quarters of 2018. The drop was only 0.6% adjusted for currency effects. This decrease relates to the first half of 2018, while sales increased by €21m in the third quarter of 2018 on a standalone basis.
The Defence sector’s operating earnings improved by €15m to €75m in the first nine months.
Sales in the Weapon and Ammunition division fell by €160m or 22% year-on-year in the first nine months. This was partly on account a trading contract of around €110m that was included in the previous year. Further declines in sales arose as a result of the postponement of the acceptance of orders by customers. The drop in sales had a disproportionate impact on operating earnings, which were down by €26m or 65% year-on-year at €14m.
The Electronic Solutions division reported an increase in sales of €49m or 11% compared to the figure for the previous year. Air Defence and Radar Systems were the main drivers behind this. The division’s operating earnings improved by €11m to €12m as a result of sales growth and cost-cutting measures.
The Vehicle Systems Division increased its sales marginally by €10m or 0.9% year-on-year in the first three quarters of 2018. Operating earnings more than doubled year-on-year to €64m. In particular, the rise in earnings was caused by positive effects from the product mix towards higher-margin products. In addition, there were favorable cost developments that, in turn, were incorporated into updated valuations in the context of regular project reviews.
OUTLOOK
Sales growth continues in both corporate sectors
Rheinmetall expects the Group’s growth to continue in the current fiscal year. Rheinmetall AG’s annual sales are set to grow organically by around 5% in the current fiscal year based on €5.9bn in 2017. Sales are expected to increase in both corporate sectors.
Sales performance in the Automotive sector is strongly influenced by the economic performance of the key global automotive markets and by external factors such as the current adjustment of European test cycles. Based on the latest expert forecasts for the uncertain development of global automotive production this year, which assume lower growth compared to previous estimates of only 1.4%, Rheinmetall now expects sales growth of 2% to 3% in the Automotive sector (previously 3% to 4%).
On the basis of business performance in the first three quarters, Rheinmetall is projecting sales growth of between 6% and 7% in the Defence sector in fiscal 2018. The reduction in the sales guidance from the originally published growth forecast (12%) takes particular account of the effects of outstanding export licenses and the expected sales lost owing to a tragic explosion at a site in South Africa in September 2018.
The growth forecast assumes that exchange rates will not change significantly in the fourth quarter of 2018 compared to current levels.
Further improvement in earnings expected in fiscal 2018
Assuming stable economic development, Rheinmetall expects an absolute improvement in operating earnings and an operating margin of slightly more than 8.5% for the Automotive sector in fiscal 2018. Rheinmetall now also anticipates a further improvement in operating earnings in the Defence sector in 2018 and an operating earnings margin slightly in excess of 7%, higher than the previous forecast range of 6.0% to 6.5%.
Taking into account holding costs and including expenses in the mid-single-digit millions for the realization and marketing of new technologies, the Rheinmetall Group has a margin of more than 7%.
08 Nov 18. BAE Systems Trading update. The Group’s outlook for 2018 remains unchanged. Overall, we expect the Group’s underlying earnings per share for 2018 to be in line with the full-year underlying earnings per share for 2017, with some small additional benefit from exchange translation.*
* Compared with the Group’s actual performance for 2017 as re-presented to reflect the impact of the adoption of IFRS 15 from 43.5p to 42.1p and assuming a US$1.35 to sterling exchange rate
UK Market
In the UK, the recently announced budget re-emphasised the UK’s commitment to strong defence and security and the company focus remains on execution of our long term contracted positions in Air and Maritime. The production ramp up of the F-35 programme is progressing well. On the Offshore Patrol Vessels programme work continues to rectify the quality issues on the first ship, with lessons learned being applied to the other ships in build. The second ship is due to commence sea trials in November. The Type 26 programme is on track for the first of class contractual date in the mid 2020s and the strengthened management team in Barrow is delivering improved performance on both the Astute and Dreadnought submarine programmes. Flight trials are on-going on HMS Queen Elizabeth off the coast of the US and are progressing to plan.
The UK-managed Applied Intelligence business remains on track to achieve a breakeven position by year end.
The final agreement of the terms of the UK’s exit from the EU after March 2019 will be important to enable companies to prepare for potential changes in the regulatory environment. There is relatively limited UK-EU trading and movement of EU nationals into and out of BAE Systems’ UK businesses and the resulting Brexit near term impacts across the business are likely to be limited. BAE Systems will support the UK government in achieving its aim of ensuring that the UK maintains its key role in European security and defence post-Brexit, and to strengthen bilateral relationships with key partners in Europe.
US Market
On 28 September, the fiscal year 2019 Defense Appropriations bill was enacted providing near-term clarity and support for the industry.
The enacted bill maintains support for our medium-term planning assumptions and positive momentum for military readiness and modernisation programmes. This includes many key BAE Systems programmes such as combat vehicles, F-35, electronic warfare programmes, and current and future precision-weapons systems. As the US-based business executes on its strong order backlog the Group remains focused on meeting the challenges of rapid growth. Within US Platforms and Services we have further strengthened management in the combat vehicles business where necessary process and automation improvements are in preparation to meet the significant production ramp and to overcome initial issues of acceleration.
US Ship repair utilisation levels remain high across our facilities with the backlog further strengthened with the $146.3m contract award in August to modernise the USS Gettysburg.
International Markets
The c£5bn Qatar Typhoon and Hawk programme, effective in September and in the order backlog, stabilises Typhoon production into the next decade and also extends Hawk production. Whilst a degree of geopolitical turbulence exists, the potential pipeline for Typhoon remains positive with opportunities both with partner nations and through exports.
In Australia, work continues on negotiating the design and development scope for the Hunter Class frigate programme, with signature of the contract expected in the coming months.
In October, the Canadian Government announced that it had selected Lockheed Martin Canada, using BAE’s Type 26 design, as its preferred bidder for the Canadian Surface Combatant programme. The bid is now in the negotiation stage.
Interim Dividend
The Interim dividend of 9.0 pence per share will be paid on 30 November 2018.
Full year results
BAE Systems will announce its financial results for the year ending 31 December 2018 on 21 February 2019.
08 Nov 18. BAE Systems eyes a brighter fighter jet future. Company is hunting for more orders as it develops successor to its Typhoon aircraft. Inside Hangar 302 at BAE Systems sprawling factory in north-west England, workers are putting the finishing touches to a new fighter jet. The grey nose cone points towards the hangar doors as if the Eurofighter Typhoon is eager to take flight. This jet, destined for the Royal Air Force, is also notable for being one of just five on the final assembly line at the BAE plant in Warton, Lancashire. A big part of the UK defence company’s line is idle. “Things are quieter here at the moment,” said Mark Brown, head of BAE’s final assembly for the Typhoon. The production rate was cut in 2017, due to a shrinking order book, and “we are now seeing [the impact]”, he added. But while the final assembly line may look rather bare, the outlook is markedly better than about one year ago, when BAE announced it would cut almost 2,000 jobs, mainly at its UK aerospace sites. BAE workers at Warton have been braced for an end to Typhoon production in 2022, but a £5bn order by Qatar for 24 jets, confirmed in September, will help extend manufacturing into the mid-2020s. And there is now the possibility of Warton playing a major role in a successor to Typhoon after the government in July unveiled plans for Tempest, a next generation fighter jet. A Typhoon is assembled at Warton © BAE The Warton factory matters because it embodies high quality UK manufacturing. It has been assembling combat aircraft for more than half a century, including Tornado fighters and Hawk trainers. The main focus now is Typhoon, Europe’s largest collaborative defence programme, built by a consortium of BAE, Airbus and Leonardo. The UK’s combat air sector generates annual sales of £6bn, and has provided more than 80 per cent of British defence industry exports over the past decade, including through a landmark contract with Saudi Arabia for 72 Typhoon jets. But the job losses BAE announced last October raised fears over Britain’s ability to retain design and development capability in combat aircraft. “One of my focus points”, said Mr Brown, has been “the need to retain capability”. This requires Typhoon sales in the medium-term, and Chris Boardman, group managing director of BAE Systems’ air division, is optimistic about potential contracts. A big boost for Typhoon and the UK would be a new order from Saudi Arabia: the kingdom signed a memorandum of intent with the UK for 48 jets in March. But this fell short of a full order for the aircraft, and there are concerns this has now been delayed indefinitely following the international outcry over the death of the journalist Jamal Khashoggi. Mr Boardman insisted any fallout is “a government issue” and BAE’s day-to-day work with the Saudis on the kingdom’s existing Typhoon jets was “carrying on as usual”. Professor John Louth, director of defence industries at the Royal United Services Institute, a think-tank, said he believed the potential Saudi order for BAE “is important, in parallel with F-35 and [future projects], in maintaining a competency and industrial capacity pipeline”. BAE has a 15 per stake in the F-35 fighter jet project, which is led by Lockheed Martin of the US. The jet will be used on the UK’s new aircraft carriers, and BAE is making the F-35’s rear fuselage section at its factory at Samlesbury in Lancashire. But for Warton, given Typhoon is due to start coming out of service with the UK armed forces from about 2040, the big hope is Tempest — a life sized model of the sixth generation fighter jet is in another hangar on the site. Tempest is backed by BAE, Rolls-Royce, Leonardo and MBDA, and is part of defence secretary Gavin Williamson’s combat air strategy, which included £2bn of development funding for the jet. Andrew Kennedy, head of strategy at BAE Systems’ air division, said there has been a change in how the UK government procures big military capability. The approach with Tempest notably took account of “the industrial base” and “international influence”, he added. Workers at Warton are pinning their hopes on the Tempest fighter jet © Jon Super/FT But affordability is a key concern, especially given the Ministry of Defence’s stretched budget, and international collaboration will be critical to Tempest’s success. BAE said the Tempest team had “entered a deepening dialogue” with Saab, the Swedish defence company, on “future combat air systems”. There are questions about whether there is room for more than one European fighter jet project, given France and Germany announced plans last year to develop a new combat aircraft. Mr Boardman said there has always been more than one in Europe — the Typhoon programme originally included France until it pulled out to develop the Rafale fighter jet — but a great deal “depends on how much of their [gross domestic product European] nations want to spend” on defence. The UK, he added, is not excluding anyone from the project and “history tells us that partnerships are the most profitable”. (Source: FT.com)
07 Nov 18. Sophos tumbles 30% as cyber growth outlook troubles market. Security group Sophos shed a third of its value on Wednesday after its outlook for “modest” growth for the rest of the year alarmed investors. Shares in the FTSE 250 group dropped as much as 37 per cent, putting it on track for its biggest fall since its June 2015 listing. Sophos had already been punished by investors for cutting its growth forecasts for billings, the value of products and services invoiced to customers, in July. Then — only two months after it said growth would be in the “mid-teens per cent” for the year —it reduced its billings growth estimate for 6 per cent for the first-quarter of the year or 2 per cent with currency effects stripped out. On Wednesday the Oxfordshire-based group said billings had edged 3.3 per cent higher year-on-year over its fiscal first half, blaming tough comparatives from last year when sales were boosted by high-profile cyber attacks such as NotPetya. Growth was 2 per cent without a currency boost. “The year on year growth rate was impacted by a challenging comparable in our Enduser business, given the dramatic acceleration in demand we witnessed in the comparative period as customers urgently invested in protection against high-profile, global ransomware outbreaks,” said chief executive Kris Hagermen. “The effect of this extraordinary boost to demand was most evident in the elevated renewal rates we saw a year ago, at 142 per cent, reflecting heightened levels of cross-selling activity to existing customers. This activity has returned to more sustainable levels in [the first half of the 2019 financial year], with a renewal rate of 118 per cent for the six-month period.” Thirty minutes into the trading day, losses had eased, but Sophos was still trading down 24 per cent at 347.8p a share. (Source: FT.com)
06 Nov 18. Wall Street’s latest fickle response to defense stocks, explained. During its third-quarter earnings call Oct. 24, Northrop Grumman announced solid sales numbers, a spike in sector operating profit and a higher operating income. Yet, after warning of headwinds of as much as $400m earnings stemming from pension liability, investors on Wall Street “ran for the exits,” in the words of market consultant Jim McAleese. For the full week of Oct. 22, Northrop stock fell 13 percent to about $270 per share — even as Northrop CEO Wes Bush said the company’s “programs continue to be well-supported in the budget, and our portfolio is well-balanced between mature franchise production efforts and the development programs that will ultimately lead to the next generation of production programs.”
This is not the first time Wall Street has responded en masse to nuances in defense contracting. But what forces are causing investors to drop Northrop stock in this case?
Broadly speaking, there has been a selling off of defense stock, “if for no other reason that sentiment is shifting and there is a de-rating,” according to Jonathan Raviv, an aerospace and defense industry analyst at Citi Group.
More specifically to Northrop, despite being applauded for its acquisition of Orbital ATK earlier this year, the legacy Northrop portfolio “is growing slower right now than some of its peers because there are still some elements that are going through portfolio reshaping or programs ramping down,” Raviv said.
“Slower organic growth might be weighing on things in terms of how people are viewing the stocks,” he added. “From the earnings perspective, it has nothing to do with the cash spent on Orbital, just the accounting dynamic.”
Now that Northrop owns Orbital, investors will likely keep a watchful eye on the rate at which Northrop can amortize, or write off the initial cost. Upcoming changes in Northrop leadership are also making investors antsy about investing in the company. According to Raviv, “any time you have some sort of change, especially from someone investors have gotten very comfortable with, that generally creates a nervousness, especially if you have big programs ramping up, like, B-21.”
“No one likes change, and the timing might have been a surprise as oppose to the actual decision,” he added.
To offset these losses, Northrop announced in October a $1bn accelerated share repurchase with Goldman Sachs. The company later said it will receive 3 million shares on Oct. 31, 2018, approximately 80 percent of the shares it expects to buy back under the program. (Companies often engage in stock buy-back agreements when they feel their stock is undervalued.)
Northrop has engaged in repurchase agreements before, so this is “nothing particularly new for this company,” Raviv said. But “they’re certainly sending a message, putting some money where their mouth is.”
Similar to Northrop, investors chose to place their money elsewhere after Lockheed Martin confirmed during its earnings call that the company could not effectively compete with Boeing for the U.S. Air Force’s $9.2bn T-X trainer and $2.4bn UN-1N Huey replacement contracts, or the Navy’s $805m MQ-25 aerial fueling drone contract.
Justifying the decision, Lockheed CEO Marillyn Hewson said matching the winning prices would have led to cumulative losses across all three programs in excess of $5bn, “an outcome that we do not feel would have been in the best interest of our stockholders or our customers.”
McAleese noted that Boeing did announce $691m of new third-quarter charges for winning the contracts.
But the stock market presumably opted to look long term, rewarding Boeing with a 3 to 4 percent bump in the stock price, at about $359 per share at close on Oct. 26. (Source: glstrade.com/Defense News)
05 Nov 18. GE under pressure over plan to move work from UK to France. Union raises security concerns over MoD and Pentagon contracts. The Rugby site manufactures equipment used in some of the Royal Navy’s current shipbuilding programmes, including the Type 26 frigate. General Electric faces a backlash over a proposal to move work from one of its manufacturing sites in the UK to France amid fears the decision could have national security implications. The US conglomerate has been consulting on plans to cut about 1,100 jobs at its UK power business as part of a wider restructuring across its global power division which has been hit by the rise of renewable energy and slowing demand in developed countries. The proposed cuts, first announced in December, are across several GE Power sites, located primarily in Stafford and Rugby in the Midlands. Rugby produces power conversion equipment for, among others, the Royal Navy fleet. The Unite trade union has now intervened and warned that a proposal to transfer the work to another GE site, at Nancy in France, raises national security concerns. In a letter sent last week to GE’s new chief executive, Larry Culp, which has been seen by the Financial Times, Unite assistant general secretary Steve Turner calls for “an urgent intervention” to allow for a discussion on viable options for the site. The proposed closure of the Rugby site is “a threat to our national security, sovereign capability and even our capacity to manufacture into the future for UK defence needs and those of our allies, including the US”, warned Mr Turner in the letter. The site manufactures equipment used in some of the Royal Navy’s current shipbuilding programmes, including the Type 26 frigate. Rugby also designed and manufactured the propulsion system of the three DDG1000 Zumwalt-class stealth destroyers for the US Navy. By moving this work to France, GE “risks future issues with the US Navy with regard to security, technical support and the supply of parts”, the letter goes on. The proposed site in France, claimed Mr Turner, “worryingly has no security classification and has already been subject to action by French intelligence following the unmasking of a number of Chinese intelligence officers operating in the plant passing secret nuclear technologies”. “We will not stand by and watch defence and security-sensitive manufacturing leave our shores for France or elsewhere,” said Mr Turner, adding that he had also written to the UK defence secretary. A spokesperson for GE said “no final decisions will be taken until we have completed our consultation with employees and their representatives, including Unite”. “A global downturn in our traditional power markets has resulted in a volume shortfall across several factories, including our Rugby Power Conversion factory. The global navies and associated prime contractors are important partners to GE Power Conversion, and we will continue to engage with them as well as the UK government,” the person added. (Source: FT.com)
06 Nov 18. Kiwi drone tech specialists raise NZ$1m and partnership with MIT. New Zealand-based Dotterel Technologies is geared for growth following an oversubscribed capital raising, the appointment of a new director and a partnership with the Massachusetts Institute of Technology. Dotterel’s capital raise, which was led by Sydney‐based venture capitalists and tech start‐up specialists Jelix Ventures, raised NZ$1.06m, attracted investors from the US, Australia and New Zealand, and follows a NZ$500,000 funding round last year.
Co‐founder Shaun Edlin said the new capital will be used to drive its IP strategy, product and business development, as well as recruitment of key staff. “We’re developing the next iteration of products to showcase to key potential clients. We are still in the early stage of commercialisation but we have several high profile commercial projects underway and we’re confident we will have some exciting news to impart to the market next year,” he said.
Dotterel has also attracted top executive, angel investor and tech start‐up mentor Ian Davis to serve on its board as a director. Also on the board are Dr Sean Simpson, founder of biofuels giant LanzaTech, and Brett O’Riley, former ATEED chief executive.
Ian is a senior executive with more than 30 years’ experience and an excellent track record in North America and Australasia as a change agent in the media, telecommunications and education sectors.
He also has more than 10 years’ of board experience, including as chairman, across a diverse range of companies. Ian has become increasingly involved with tech start‐ups over the last several years as both mentor and adviser, as well as angel investor. He presently has a portfolio of 12 companies, of which he is on the board of four, including Dotterel.
Among the new investors who participated in the capital raising are K1W1, University of Auckland’s Inventors Fund and David Weekly, a prominent US expert and investor in drone companies.
“Having investors such as Jelix and Weekly onboard is great for Dotterel, as it raises our visibility and credibility in the important Australian and US markets,” Edlin said.
Dotterel was the only New Zealand company invited to the international technology tradeshow InnoTech ’18, held in Taipei in September. The Taiwanese Economic and Cultural Office and Air New Zealand supported the company to attend, where they collected Gold Awards for both their passive noise reduction technology and audio recording technology.
The company has also partnered with the Massachusetts Institute of Technology (MIT), which is now funding the placement of top aerospace students at the company as interns, a development that Edlin says will deliver long‐term benefits.
“These are the top students who are turning down opportunities at Lockheed Martin to come and work with us. They’re getting the opportunity to assist on R&D projects where they are engaging in some of our leading‐edge, blue sky research that will eventually lead to our next iteration of products,” he said.
Dotterel is a New Zealand-based technology company that develops and integrates a suite of noise reduction and audio enablement technology for UAVs. The company was born out of the Callaghan C-Prize, where challenges were laid down by key figures in the New Zealand and international cinematography industry to develop the next generation of UAV solutions. (Source: Defence Connect)
05 Nov 18. Astronics Corporation (Nasdaq:ATRO), a leading supplier of advanced technologies and products to the global aerospace, defense, and semiconductor industries, today reported financial results for the three and nine months ended September 29, 2018. Results for the quarter and the first nine months of 2018 include the results of Telefonix PDT, which was acquired on December 1, 2017 and Custom Control Concepts (“CCC”), which was acquired on April 3, 2017. Earnings per share for all periods are adjusted for the 3 for 20 (15%) distribution of Class B Stock for shareholders of record on October 12, 2018.
Peter J. Gundermann, President and Chief Executive Officer, commented, “Our business continued to show excellent momentum in the third quarter, with record revenue once again and bookings that exceeded shipments by 10%. Our bottom line was solid as well, though it was aided by a significant tax benefit resulting from a change in state tax treatment. This helped compensate for poor results from three of our aerospace businesses that continue to struggle, though we are making progress there also.”
Consolidated Review
Third Quarter 2018 Results
Consolidated sales were up 42%, or $63.0m, from the same period last year, including $20.8m in sales from the Telefonix PDT acquisition. Organic revenue was $191.9m, up 28% compared with the prior-year period driven by Test revenue more than doubling and 15.6% organic growth in the Aerospace segment.
Consolidated gross margin was 21.8% compared with 21.7% in the prior-year period. Consolidated gross margin benefited from higher organic sales and Telefonix PDT’s contribution in gross profit. This was partially offset by a $3.9m program charge recognized due to the revision of estimated costs to complete a long-term contract assumed with the acquisition of the CCC business.
Consolidated Engineering and Development (“E&D”) costs were $31.2m. Organic E&D costs were $26.4m, compared with $23.7m in last year’s third quarter. As a percent of organic sales, organic E&D costs were 13.8% and 15.8% in the third quarters of 2018 and 2017, respectively.
Selling, general and administrative (“SG&A”) expenses were up $5.9m to $28.0m, or 13.2% of sales, compared with $22.1m, or 14.8% of sales, in the same period last year. The acquisition contributed $4.6m to SG&A, including $1.6 m of intangible asset amortization expense. Consolidated intangible asset amortization expense was $4.3 m compared with $2.9m in the prior year. Consolidated intangible asset amortization expense is expected to be $4.3m in the fourth quarter of 2018 also.
A tax benefit was recorded for the third quarter of 2018 compared with a 29.9% effective tax rate in the third quarter of 2017. This was the result of a net tax benefit of $4.0m recorded in the quarter for refund claims derived from a revised state filing position that reduces the taxable income apportioned for state income tax purposes and the resulting revaluation of deferred tax liabilities. In addition, the 2018 third quarter tax rate was favorably impacted by a reduction to the provisional income tax on the deemed repatriation of foreign earnings and profits of approximately $0.4m. Absent these discrete adjustments, the tax rate for the quarter would have been 19.3%. The 2018 third quarter tax rate also benefited from the lower Federal statutory tax rate partially offset by the elimination of the Domestic Production Activities Deduction resulting from the Tax Cuts and Jobs Act.
Net income was $17.0m, or $0.52 per diluted share, compared with $6.1m, or $0.18 per diluted share in the prior year.
Bookings were up 25% to $233.8m, for a book-to-bill ratio of 1.10:1. Backlog at the end of the quarter was $398.1m. Approximately $187m of backlog is expected to ship in the final quarter of 2018.
Mr. Gundermann commented, “We believe the 42% growth in revenue and the strong bookings in the quarter validate the value proposition of our solutions and strength of our market position. Both segments performed well and contributed to the volume. The tax change obviously helped our bottom line, compensating for the combined operating loss of $11.2 m from our three struggling Aerospace business which we have discussed in the past.”
Year-to-Date 2018 Results
Consolidated sales for the first nine months of 2018 increased by $147.2m, or 32.5%, including $72.8m in acquired revenue. Aerospace segment sales were up $105.3m to $500.4m. The Test segment sales were up $41.8m, or 72.0%, to $100.0m.
Consolidated gross margin was 22.2% in the first nine months of 2018 compared with 23.2% in the first nine months of 2017. Consolidated gross margin benefited from higher organic sales and the gross profit contribution of Telefonix PDT that was more than offset by the lower margin profile of CCC due to low volume and $7.5m year-to-date loss associated with the long-term contract, as previously discussed. Organic E&D costs were 14.4% of organic sales, or $76.0m, compared with $69.5m, or 15.3% of sales, in the prior year’s first nine months. Additionally, acquisitions contributed E&D costs of $13.0m in the first nine months of 2018.
SG&A expenses were $87.9m, or 14.6% of sales, in the first nine months of 2018 compared with $65.6m, or 14.5% of sales, in the same period last year. Acquisitions contributed $16.9m to SG&A, including $7.2m of intangible asset amortization expense. Also contributing to higher SG&A was a $1.0m litigation reserve recorded in the first quarter of 2018 for an ongoing matter. Corporate overhead expenses increased by $2.5m due to increased staffing and higher legal and accounting costs.
The effective tax rate for the first nine months of 2018 was 6.5%, compared with 27.0% in the first nine months of 2017. The decrease was due to the factors identified in the quarter, as described above. Absent these discrete adjustments, the tax rate for the first nine months of 2018 would have been 18.5%. Finally, the tax rate for the first nine months of 2018 was favorably impacted when compared with the first nine months of 2017 by the decrease in the Federal statutory tax rate partially offset by the elimination of the Domestic Production Activities Deduction resulting from the Tax Cuts and Jobs Act.
Net income for the first nine months of 2018 totaled $34.3m, or $1.04 per diluted share.
Mr. Gundermann summarized, “We have developed solid momentum across our business over the first three quarters of 2018, with revenue up 32.5% and solid bookings to match. Our margins have been under pressure from our three struggling business, which have suffered $28.3 m in operating losses year-to-date. We believe we are making progress resolving the problems with these businesses which will become apparent as we move into 2019.”
Aerospace Segment Review (refer to sales by market and segment data in accompanying tables)
Aerospace Third Quarter 2018 Results
Aerospace segment sales increased by $40.9m, or 31.8%, to $169.6m, when compared with the prior year’s third quarter. Organic sales increased $20.1 m, or 15.6%, while Telefonix PDT contributed $20.8m in sales in the 2018 third quarter.
Avionics sales were up $19.7m, largely due to the addition of Telefonix PDT, which contributed $17.2m. Electrical Power & Motion sales increased by $14.6m, or 22.9%, due to higher sales of in-seat power and seat motion products. Sales of Lighting & Safety products were up $6.5m due to a general increase in volume. Sales of other products were up $3.6m, due primarily to the acquisition. System Certification sales decreased by $2.1m on lower project activity.
Aerospace operating profit for the third quarter of 2018 was $16.2m, or 9.6% of sales, compared with $13.0m, or 10.1% of sales, in the same period last year. Organic Aerospace E&D costs were $23.3m compared with $21.1m in the same period last year. The acquisition added $4.8m in E&D costs.
Aerospace operating profit benefited from the contribution margin on higher organic sales and the addition of Telefonix PDT offset by a $3.9m program charge related to the aforementioned CCC long-term contract. Intangible asset amortization expense for Telefonix PDT was $1.6m in the third quarter.
Aerospace bookings in the third quarter of 2018 were up 35% to $196.7 m compared with the prior year period. The book-to-bill ratio was 1.16:1 for the quarter. Backlog was $325.7m at the end of the third quarter of 2018.
Mr. Gundermann commented, “Our Aerospace segment had another strong quarter with record revenue of $170m, and even stronger bookings of $197m, leaving us with a record backlog of $326m at the end of the period. Operating margin was somewhat disappointing at $16.2m, or 9.6% of sales, but again, this includes an operating loss of $11.2m at the three struggling Aerospace operations in the third quarter. Progress is being made at each and we expect significant improvement at these operations in 2019.”
Aerospace Year-to-Date 2018 Results
Aerospace segment sales increased by $105.3m, or 26.7%, to $500.4m when compared with the prior year’s first nine months.
Avionics sales increased by $68.9m, driven primarily by the acquisitions, which contributed $63.6m in Avionics sales. Electrical Power & Motion sales increased $19.9m, or 10.0%, and Lighting & Safety sales increased $6.9m, both for similar reasons as in the quarter. Systems Certifications sales increased $2.6m on higher project activity earlier in the year. Sales of other products were up $8.1m to $21.1m, due primarily to the Telefonix PDT acquisition.
Aerospace operating profit was $47.5m, or 9.5% of sales, compared with $46.8m, or 11.8% of sales, in the same period last year. Aerospace operating profit in the first nine months of 2018 benefited from higher organic sales and the addition of Telefonix PDT, offset by the $7.5m year-to-date loss related to the CCC long-term contract previously discussed. Aerospace operating profit in the first nine months of 2018 was also negatively impacted by a $1.0m litigation reserve and purchase accounting expenses. As is typical during the first few quarters following an acquisition, non-cash costs were higher than what is expected over the long-term, as short-lived intangible assets are amortized and the fair value step-up costs relating to the acquired inventory is expensed. Intangible asset amortization expense for the acquisitions was $7.2m in the first nine months. Also related to the acquisitions was fair value inventory step-up expense of $1.3m that was recorded in the first quarter.
E&D costs for Aerospace were $80.3m and $62.5m in the first nine months of 2018 and 2017, respectively. Acquisitions contributed $13.0m in 2018 to Aerospace E&D expenses.
Test Systems Segment Review (refer to sales by market and segment data in accompanying tables)
Test Systems Third Quarter 2018 Results
Sales in the third quarter of 2018 increased approximately $22.1m to $43.1m, more than doubling when compared with the same period in 2017. A $27.0m increase in sales to the Semiconductor market was offset by a $4.8m decrease in sales to the Aerospace & Defense market when compared with the prior-year period.
Operating profit for the segment was $5.8m, or 13.5% of sales, compared with $1.1m, or 5.2% of sales, in last year’s third quarter. Higher margin was driven by the increase in volume. E&D costs were $3.1m, up from $2.6m in the third quarter of 2017.
Bookings for the Test Systems segment in the quarter were $37.1m, for a book-to-bill ratio of 0.86:1 for the quarter. Backlog was $72.3m at the end of the third quarter of 2018.
Test Systems Year-to-Date 2018 Results
Sales in the first nine months of 2018 increased 72.0% to $100.0m compared with sales of$58.1m for the same period in 2017. The growth was driven by a $53.7m increase in sales to the Semiconductor market. This was somewhat offset by a decrease in Aerospace & Defense sales of $11.9m.
Operating profit increased $7.3m to $10.2m, or 10.2% of sales, as a result of increased volume. E&D costs were $8.7m in the first nine months of 2018 compared with $7.0m in the prior year period.
Mr. Gundermann commented, “Our Test segment continues to perform well, with third quarter revenue the strongest of any quarter in three years, combined with solid bookings. Year-to-date, our Test revenue is up 72% over 2017. We continue to make very good progress on new programs also, and continue negotiations on the awarded letter of intent from the transportation project that we announced during the quarter, which was not included in bookings. We believe the segment is very well positioned for 2019.”
2018 Fourth Quarter Outlook
Fourth quarter sales are forecasted to be in the range of $190m to $200m, with $170m to $175m expected from the Aerospace segment and $20m to $25m from the Test segment.
Consolidated annual sales for 2018 are forecasted to be in the range of $790m to $800m, with $670m to $675m expected from the Aerospace segment and $120m to $125m from the Test segment.
Consolidated backlog at September 29, 2018 was $398.1m. Approximately 47% of backlog is expected to ship in 2018.
We expect the effective tax rate for the fourth quarter to be in the range of 18% to 21%. The effective tax rate for the year, inclusive of the adjustments referred to above, is expected to be in the range of 10% to 13%.
Capital equipment spending in 2018 is expected to be between $18m to $22m, lower than the prior forecast of $24m to $28m.
E&D costs for 2018 are expected to be in the range of $115m to $120m, up slightly from the previous forecast of $110m to $115m.
Mr. Gundermann concluded, “We expect to finish 2018 with a solid fourth quarter, though it will be a little lighter than the second and third quarters. Revenue will be weighted more towards Aerospace and Test will be lighter. Also, we believe our record backlog and continued strong demand for our products sets us up well for another year of growth in 2019.” (Source: BUSINESS WIRE)
05 Nov 18. Babcock International shares blighted by RBC downgrade to ‘sector perform’ from ‘outperform.’ The Canadian bank also chopped back its target price for the FTSE 250-listed stock back to 700p from 1,000p, with the shares currently trading at 584.60p, down 5.5% on Friday’s close. RBC’s analysts concluded: “In our view, until we see both the board and outlook ‘refreshed’, it is difficult to envisage relative outperformance” RBC Capital Markets blighted shares in Babcock International PLC (LON:BAB) on Monday after the Canadian bank cut its stance on the engineering group to ‘sector perform’ from ‘outperform’ with ‘speculative risk’.
The bank also chopped back its target price for the FTSE 250-listed stock back to 700p from 1,000p, with the shares currently trading at 584.60p, down 5.5% on Friday’s close.
In a note to clients, RBC analysts said that while its market-leading position, high barriers to entry and a long-dated order book should make Babcock an interesting investment proposition, it’s telling that there’s limited buying interest even on a 2019 price-to-earnings ratio of eight times.
They said that its positive stance had been based on the strength of the group’s relationship with the UK Ministry of Defence, the non-discretionary bias of the work it undertakes and the fact that these were not reflected in its rating.
“However,” the analysts added, “persistent ‘financial discipline’ concerns and negative earnings surprises have ensured that the stock de-rating has continued. Putting this into perspective, Babcock has now underperformed the FTSE All Share 50% over the past five years – despite an 11% compound annual growth in operating profits. On this basis, surely something has to give?”
They said the stock’s low valuation appears to reflect worries that the issues that have beset the likes of Capita, Carillion, Mitie and Serco – growth, accounting and balance sheet – are about to emerge at Babcock.
The analysts concluded: “In our view, until we see both the board and outlook ‘refreshed’, it is difficult to envisage relative outperformance.” (Source: proactiveinvestors.co.uk)
05 Nov 18. Kaman reveals falling Q3 aerospace sales. US rotary-wing manufacturer Kaman Corporation released its third quarter financial results on 1 November, which showed that falling revenue and profit in the quarter was driven mainly by weaker performance in its Aerospace division. Aerospace sales were down 12% at USD157m in the three months to 28 September, while operating income generated by the business fell by 77% to USD7.2m. The company’s other business segment, Distribution, posted improvements in both sales and profits, leaving total company sales in Q3 at USD443m.
Chairman, president, and CEO of Kaman Neal J. Keating, said “Our third quarter results were below expectations as we recorded a non-cash non-tax deductible impairment charge in our UK operations and we experienced some shipment delays and adverse sales mix for several of our key aerospace programmes.” (Source: IHS Jane’s)
02 Nov 18. Maxar’s Space Systems Loral Subsidiary Up for Acquisition. Finding a buyer for Maxar’s Space Systems Loral Division (SSL), based in Palo Alto, California, seems to be a priority with the parent company CEO’s agenda. During an earnings call, Howard Lance, Maxar’s CEO, stated that the primary path in regard to SSL is to sell that business or, at a minimum, to unload the valuable Palo Alto properties where SSL conducts their operations. That property value is estimated to be approximately $150m. Lance said that a number of prospective buyers are already in discussions to acquire SSL. With overall combined earnings for Maxar’s Space Division down 12 percent for the three months that closed on September 30, a $263m revenue degeneracy has been experienced. Maxar’s year-over-year (y-o-y) revenues declined 10 percent to $886m when compared to the firm’s financials for the first nine months of 2017 — the GEO satellite business is seen as a significant financial encumbrance, resulting in negative profit margins for the parent company’s overall revenue picture, according to Lance. Some stated reasons for SSL’s financial slump — the company is down 31 percent in revenues y-o-y — is that components for the firm’s GEO satellites have been found to be highly problematic, with defective parts from an unnamed supplier having to be replaced and reintroduced into production cycles, thereby increasing costs and pulling profits down. Satellite completion times have increased and, as revenues have fallen, so has the workforce at SSL, with the necessary layoffs additionally impacting overall company productivity and delaying manufacturing activities.
According to Lance, this year Maxar would have experienced a less dramatic 1 percent decline in earnings if SSL’s GEO business had not been impacting the combined revenue streams. The Spacecom cancellation of the Amos-8 satellite contract with SSL was an additional concern for Maxar, leaving SSL with but a single order for the remainder of 2018, that being for Japanese operator BSAT.
The Maxar CEO added that Maxar’s Space Systems business is quite “solid” if GEO satellites are not part of the corporation’s revenue mix. With NASA showing great interest in smallsat development, the agency selected Maxar as one of three firms to engage in such work, receiving a contract that is estimated to be worth $750m. Another opportunity for Maxar rests with the $3bn estimated value of a Telesat constellation contract and has teamed with Thales Alenia Space as the companies compete against Airbus to develop a complete plan for such a project. A decision on the final contract is expected to be announced in 2019. The Telesat constellation will comprise 300 satellites when fully executed, with the initial contract either for the entire constellation or a few initial smallsats.
There will be only six to seven large GEO satellites being manufactured this year, in Lance’s opinion. Although that is similar to last year’s production of GEO satellites across the globe, that in itself was down from the 20 to 25 satellites that were ordered annually from manufacturers in previous years. As he stated, “This is really unprecedented. We are managing as best we can.” (Source: Satnews)
05 Nov 18. FIVA acquires Cadgile to build submarine design capability. French engineering services company FIVA has acquired engineering support services provider Cadgile to develop a submarine design workforce.
Cadgile is a South Australian CAD design and drafting company with experience across a broad variety of sectors including defence, oil and gas, and mining. FIVA has acquired Cadgile to fulfil the role of its design and drafting service provider in support of the work it is doing in the delivery of the Australian Future Submarine Program.
All staff, including managing director Gary McRae, will be retained under the deal. McRae believes that the opportunities created through FIVA’s acquisition of the firm he co-founded in 2005 will lead to significant growth for the Prospect-based business as well as its team of experienced designers and CAD practitioners.
“It is very likely that we’ll grow three or four-fold in as many years as a result of this transaction. My ongoing role will be to manage the firm under its new ownership and make sure we capitalise on the doors that will open for us as a result of our relationship with FIVA Group,” explained McRae.
“It is a great opportunity to draw on the experience and relationships that FIVA has with leading companies like Naval Group, Navantia and many more. This is a tremendously exciting development for us as a business as well as the development of our staff is concerned.” (Source: Defence Connect)
02 Nov 18. Boeing eyes services M&A, small or big, in tussle with Airbus. Boeing Co (BA.N) is looking for future deals “small or big” now that it has absorbed parts distributor KLX Inc, an executive told Reuters, as the world’s largest planemaker tries to beat out rival Airbus (AIR.PA) in the highly profitable market for aircraft parts and services. Boeing last month closed the KLX acquisition for $4.25bn (3.26bn pounds), including about $1bn of net debt, its largest deal since merging with McDonnell Douglas in 1997.
Now it expects further purchases to help it triple the revenue of its year-old Global Services division to $50bn in a decade, the unit’s chief executive Stan Deal told Reuters in an interview.
“When we come up with selective, complementary investments, whether it’s small or big, we will make it,” Deal said.
“Our first thrust is organic,” he added. “We have plenty of things we can invest in organically to create growth.”
Both Boeing and rival Airbus are muscling deeper into the higher-margin market for repairs, maintenance and analytics services in a push that has rattled the aerospace supply chain.
Deal declined to specify a price range or geography for its next targets, but said any bolt-on acquisitions would expand beyond the “technology or breadth inside of Boeing.”
This could mean deals in areas such as avionics services, which is in increasing demand as airplanes become more equipped with complex electronic systems.
UNIFIED FRONT
Parts suppliers often reap the bulk of their profit in servicing jetliners over their multi-decade lifespan rather than when they are first assembled, and Deal said Boeing has this week launched fresh campaigns for new business with airlines and equipment manufacturers as a unified Boeing-KLX front.
Boeing, which forecasts services to generate a third of the global aerospace industry’s $7.6trn in revenue for the next 10 years, is not alone in wanting to dominate the segment.
Europe’s Airbus has set a goal of tripling services revenue from its commercial aircraft business to $10bn within seven years and sharply reducing the number of times its jets are stranded on the ground for technical reasons, industry sources said.
Boeing’s deal with Wellington, Florida-based KLX, which supplies materials like fasteners, bearings, and hydraulic fluids globally, will bring anticipated annual cost savings of $70m by 2021.
“We’ve already begun to see results along that line,” Deal said. “Over the course of a year we’ll be collapsing (KLX’s) IT infrastructure.”
Boeing’s proposed stake in Brazilian planemaker Embraer (EMBR3.SA), which still requires government and shareholder approvals, “is part and parcel” of the services growth push, too, Deal said. (Source: Reuters)
29 Oct 18. Forrester Reports: Trading is Challenging for SES. Journalist Chris Forrester has filed the following information regarding SES and that company’s video division revenues that continue to be under pressure at Advanced TV. SES shares fell back -2.8 percent, although the company’s networks segment grew impressively by 13.6 percent in the nine months to September 30th. The company’s Q3 2018 underlying revenue of 317.5m euros was 3.8 percent lower (year-on-year) at constant FX. Video distribution revenues fell 5.8 per cent.
Overall, SES revenues grew slightly by 0.4 per cent (at constant revenue, having stripped out currency variations) compared with the same period last year.
SES’ overall contracted backlog also fell, from 7.6bn euros last year, to 7bn euros for the nine months to September 30th. SES said trading conditions in its International markets continue to be challenging, with recently-launched customer platforms struggling to build traction while competition to establish new platforms remains intense. The business continues to focus on building the commercial pipeline, notably for SES-9 and SES-10.
SES CEO Steve Collar said that its full year guidance was now repeated, and the operator has signed important renewals and new business this quarter with now 96 per cent of 2018’s expected total revenue secured, including an important renewal with Channel 4 in the UK.
“Video Services contributed positively in Q3 with growing traction for our MX1 360 platform,” Collar said. “International video distribution remains challenged with some platforms struggling to achieve market traction and strong competition for all new platforms. We remain focused on growth opportunities while reinforcing our core neighbourhoods that are among the best and most penetrated DTH neighborhoods in the world.
“We continue to make strong progress with our C-band initiative in the U.S., aligning our proposal with the leading continental U.S. satellite services operators, founding the C-band Alliance (CBA) and hiring experienced U.S. executives to run the consortium. In comments to the FCC’s NPRM due next week, the CBA will confirm on behalf of its members that up to 200 MHz of mid-band spectrum could be cleared to support 5G wireless deployment nationwide in the U.S. while protecting the important broadcast and other communities that we serve today. I am increasingly persuaded that our market-based proposal is the best way to facilitate a leading position for the US in 5G and is the only way to repurpose spectrum in a timeframe consistent with the stated goals of the FCC.” SES explained that their North American video market had decreased, “due to lower volume resulting from the switch-off of SD TV channels which had already been replaced with HD TV channels, as well as on-going fleet optimization initiatives.” (Source: Satnews)
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Odyssey is an independent corporate finance firm which advises on acquisitions, business sales, management buy-outs and raising finance, typically in the £5m to £100m range. We have extensive experience in the niche manufacturing sector with our most recent completed deal being the sale of MacNeillie to Babcock Plc. Details can be seen at: http://www.odysseycf.com/case-study-macneillie/
As a result of this and related projects we have developed relationships with buyers and funders looking to acquire or invest in the sector. We would be happy to share further insights into the sector and to carry out reviews of businesses whose shareholders are considering an exit, acquisition or fundraise.
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