31 Jan 19. General Electric’s modest gains, candor spark ‘relief rally.’ General Electric Co beat estimates for sales and cash flow in the fourth quarter and said on Thursday it had reached a tentative deal to settle a subprime mortgage case with U.S. regulators, sending its shares sharply higher. GE stock briefly soared as much as 18 percent as profits and sales rose in its aviation, healthcare and oil-and-gas businesses, offsetting $1bn in cumulative losses at its power and capital units. GE’s bond prices also rose sharply. In afternoon trading, the stock was up about 12 percent at $10.22.
The 2018 results cap one of GE’s worst years, starting with an $11bn charge and disclosure of accounting investigations by U.S. regulators, and ending with fears about GE’s liquidity and even the continued existence of what once was America’s most famous and valuable company. Even with Thursday’s gains, GE shares are down 65 percent over the past two years. Many analysts and investors had braced for disappointing results and were relieved that new Chief Executive Larry Culp was able to show some improvement while being blunt about bad news. Culp offered only a scant forecast, however, delaying details for a meeting to be scheduled soon.
Still, Culp set targets that matched what analysts and investors have been requesting: lifting GE’s triple-B credit rating to single-A quality, reducing industrial debt to less than 2.5 times operating income, and even restoring the dividend. Culp did not set a time frame for those goals.
GE also announced a settlement with the U.S. Department of Justice over its subprime mortgage practices before the 2008 financial crisis. GE will pay a $1.5 bn civil penalty, money it has already set aside.
Culp ruled out selling GE’s $40bn aircraft leasing unit, quelling concerns that jettisoning the profitable unit would sink GE Capital. He also said GE is “reviewing every single project and contract” in its power unit.
Investors seemed euphoric, if a little myopic. “The only relevant data in the quarterly numbers is that actual sales and the free cash flow from the industrials business were better than expected,” William Blair analyst Nicholas Heymann said.
GE’s lengthy presentation contained numerous warnings and unknowns. Cash is likely to decline in 2019, but GE would not say by how much; GE is still in “early innings” of turning around its power business, where revenue will fall again in 2019; and GE will provide detail about its toxic long-term care insurance liabilities in February. It took a $65m charge for insurance in the latest quarter, compared with a $6.2 bn charge and $15bn in provisions a year ago.
It also did not provide more detail on ongoing regulatory investigations of its accounting for long-term care policies and power-plant services contracts.
BETTER THAN EXPECTED RESULTS
“The results are better than expected because expectations were so low,” said Erik Gordon, a professor at the University of Michigan Ross School of Business. “The company still faces the huge challenges of managing its mountain of debt and restoring investor confidence in the accuracy of its numbers.”
But some said Culp’s new candor and an investor relations chief plucked from Wall Street had gone a long way to restoring credibility after years of happy talk, earnings landmines and a class-action lawsuit that alleges accounting fraud.
“Power is still in free-fall,” said Scott Davis, analyst at Melius Research, in a note. But GE is providing “an honest assessment of the problems and (a) realistic plan to fix them … So the relief rally is explainable.”
The results showed GE had strengthened its cash position and chipped away $21bn from its massive debt, two issues that hit the stock in tumultuous 2018.
The 127-year-old conglomerate was booted from the Dow Jones Industrial Average, had its credit ratings cut to three notches above junk, slashed its quarterly dividend to a penny, restated earnings for the prior two years and saw a $10bn fossil-fuel power acquisition turn sour as wind and solar power gained momentum while GE’s gas-turbine business struggled with faulty turbine blades.
GE said its power unit took $400m in charges in the fourth quarter, including a small amount for blade repairs at dozens of customers around the world. That was on top of $240 m for blade repairs in the third quarter. GE booked a $666m profit for the fourth quarter and revenue rose 5 percent to $33.3bn, above analyst estimates of $32.6bn, according to Refinitiv IBES. Industrial free cash flow of $4.9bn in the quarter, topped the $4 bn threshold that investors were looking to beat, Gordon Haskett analyst John Inch wrote in a note. GE’s adjusted earnings totaled 17 cents a share, below analyst estimates of 22 cents, according to Refinitiv IBES data. (Source: Reuters)
31 Jan 19. QinetiQ Group plc (QinetiQ or the Group) today issued a trading update covering its third quarter.
The Group has continued to perform well and we are maintaining our expectations for Group performance in the current FY19 financial year.
The EMEA Services division continued to deliver encouraging organic order and revenue growth compared to the prior year. Revenue under contract and operating profit were in line with our expectations.
Discussions with the UK Ministry of Defence (MOD) on the remaining scope of the Long Term Partnering Agreement (LTPA) for test and evaluation services continue to make good progress. The Group aims to secure pricing to 2028 and agree a similar level of investment and recovery mechanism to the December 2016 LTPA amendment.
The Global Products division delivered positive organic order and revenue growth compared to the prior year, with underlying operating profit improving during the third quarter. Revenue performance was particularly strong in QinetiQ North America.
The implementation of our strategy continues to gather momentum. Our increasing customer focus has resulted in further competitive contract wins and the successful delivery of key projects.
Our investment in UK Defence Test and Evaluation has supported the delivery of critical programmes:
- We are modernising MOD air ranges under the December 2016 LTPA amendment and this has enabled us to secure a contract to deliver Formidable Shield 2019. Building on the success of the 2017 event, QinetiQ will host this large, multi-national maritime exercise that will test the ability to respond to the latest and most advanced ballistic missile and sea skimming threats.
- We are playing a key role in supporting the UK MOD to assure the capability of the new F-35 aircraft. During the period, working with our partners, we successfully delivered the first live firings of F-35 weapons in the UK at the Aberporth air range.
We continue to build an international company through growth in our US and Australian home countries and wider international markets:
- As announced by the US Department of Defence in December 2018, QinetiQ North America was awarded a $90m framework contract to support the sustainment of the TALON family of robotic systems
- Integration of Germany-based E.I.S. Aircraft Operations is progressing well with the combined business already working together on a number of customer projects.
We continue to advance our innovation strategy across our company:
- In October 2018, we signed a ten-year framework contract to be the Engineering Delivery Partner to the UK MOD’s procurement agency DE&S. We have secured more than £25m of tasking orders through this contract to date. This innovative approach to supply chain management ensures our largest UK customer receives the best possible engineering service from across the UK supplier base cost effectively.
- Following the launch of the European Space Agency’s BepiColombo mission in October 2018, QinetiQ’s T6 ion engines are now propelling the spacecraft on its seven-year voyage to Mercury.
QinetiQ will report its preliminary results for FY19 on Thursday 23 May 2019.
30 Jan 19. IFS net revenue soars beyond $600m in 2018 on skyrocketing cloud and licence. Enterprise software firm closes transformational year with record-breaking numbers
- Cloud and SaaS revenue increase of +300% YoY
- Net revenue leapt 23% YoY to $606m
- Licence revenue up 22% YoY, driven by organic growth in the business
- Maintenance revenue up 13% YoY
- Consulting revenue up 10% YoY
- A solid investment with profitable revenue growth: EBITDA was 21%, achieving a YoY improvement of 27%
January 31, 2019 – IFS, the global enterprise applications company, today announced its financial results for the full year ending December 31, 2018.
IFS CEO Darren Roos commented, “We are outpacing large and medium-sized competitors in the ERP space and our robust 2018 financial results reflect that. Our major engines of growth for the year ahead include IFS Aerospace & Defence, IFS Field Service Management and IFS Applications. Alongside these innovations will be a firm commitment to continue challenging the status quo while providing world-class customer service. Building on the momentum created in 2018, we enter 2019 with a renewed sense of purpose and a future guided by our customers.”
IFS CFO Milena Roveda added, “Our financial performance in 2018 doesn’t just make a nice headline. It’s a testament to a business built on innovation and an unrelenting commitment to providing customer-focused solutions. This is how we set ourselves apart from the competition. With an increase of 300% in cloud sales and a net revenue improvement of 23% versus 2017, we are outpacing the market by a factor of more than three.”
Business Performance: Financial and Operational Highlights for FY 2018
Driven by a double-digit increase in product revenue, net revenue growth soared to 23%, outperforming the projected market growth of 7%. Cloud and SaaS saw a revenue increase of a remarkable 300%.
Results like these don’t happen on their own. A number of major transformation projects were carried out in 2018 with the expressed aim to facilitate global growth and ever-happier customers. Projects included harmonising customer service and support as IFS has continued to grow its footprint in the medium-to-large enterprise segments. 2018 also saw the launch of key products, including IFS Applications 10, IFS Field Service Management 6, and SaaS-based solutions in the IFS Aerospace & Defence product line.
These dramatic gains were ushered in following the appointment of IFS CEO Darren Roos in early 2018. To complete the company’s global leadership team, Roos recruited talent from some of the best-known technology brands including SAP, Oracle, Software AG and Hewlett Packard.
Chief Product Officer Christian Pedersen, who assumed the role in September 2018, also brings the focus of IFS on investing in sensible but forward-thinking technologies to the next level. Among the other visionary hires were Milena Roveda as Chief Financial Officer, Jane Keith as Chief People and Culture Officer, and Michael Ouissi as Chief Customer Officer. With 2018 in the rear-view mirror, IFS has emerged hungry and ready, a company structured to scale as it continues to equip challenger companies everywhere with sensible enterprise solutions.
30 Jan 19. Madison Dearborn Partners and CoVant Management Agree to Sell LGS Innovations to CACI International. Madison Dearborn Partners (“MDP”) and CoVant Management (“CoVant”) announced today that they have signed a definitive agreement to sell LGS Innovations, a leading provider of command, control, communications, computers, intelligence, surveillance, and reconnaissance (“C4ISR”) and cyber products and solutions to the U.S. Intelligence Community and U.S. Department of Defense, to CACI International Inc (NYSE: CACI). CACI, which provides information solutions and services in support of U.S. national security missions and government transformation for Intelligence, Defense, and Federal Civilian customers, will acquire LGS Innovations for $750m. LGS Innovations, the former federal division of Bell Labs, has a heritage as a trusted partner of the U.S. Federal Government extending back over 60 years. In 2014, MDP and CoVant acquired LGS Innovations in a divestiture from Alcatel-Lucent and have since grown LGS Innovations into one of the leading independent providers of secure networking, cybersecurity, laser communications/photonics, custom software development, and digital signal processing to government customers and commercial organizations serving U.S. national security interests.
Matt Norton, a Managing Director on MDP’s Business and Government Software and Services team, said: “We are proud to have worked alongside CoVant in our successful partnership with LGS Innovations. Over the past five years, we evaluated and supported significant R&D investments to grow the business organically – initiatives that we believe have benefited LGS Innovations’ customers and employees and our country. We wish the LGS team well as they start a new chapter, and we are confident they will continue to invent new groundbreaking technology products and capabilities as an important growth engine within CACI.”
Today, LGS Innovations is on a strong upward revenue and earnings growth trajectory. With approximately 1,300 employees, including more than 900 scientists and engineers and a world-class leadership team, the company possesses a successful track record in the development and deployment of mission-focused technological innovations and solutions to the U.S. national security, defense, and advanced research communities. These innovative products and capabilities include real-time spectrum interference detection and management systems, automated tools to diversify commercial software code and make it less susceptible to cyberattack, and space-qualified optical communications systems that enable high-speed data transmission by laser over distances approaching 150 million miles.
“We want to acknowledge the outstanding strategic execution of the LGS team during our ownership, and the important contributions they have made to their customers’ missions,” said Joseph Kampf, Chairman of LGS Innovations and Chairman & CEO at CoVant. “They are well-positioned to continue delivering innovative technology solutions for our national security as a part of CACI.”
Kevin L. Kelly, Chief Executive Officer of LGS Innovations, said: “We are thankful for the support of MDP and CoVant and their willingness to invest in our growth, and we are excited about the combination of LGS and CACI. We believe our market leading C4ISR and cyber capabilities and culture of innovation, along with CACI’s extraordinary channels to customers, and our shared mission focus will accelerate growth and market penetration for the combined enterprise.”
In 2012, MDP and CoVant formed a partnership to identify and secure equity investments in the federal government technology services and solutions market. Since creating an independent standalone LGS Innovations in April 2014, MDP and CoVant have invested in the business, increasing the company’s pipeline size, contract diversity and volume, penetrating new markets and missions, expanding and deepening LGS Innovations’ leadership team, and increasing EBITDA roughly 8x during their ownership.
In 2018, MDP and CoVant acquired LinQuest Corporation, a leading provider to the U.S. defense and intelligence communities of space systems technology solutions, including large-scale systems engineering and integration, software development, complex systems modeling and simulation, data analytics, and turnkey mission solutions.
Kirkland & Ellis LLP and Crowell & Moring LLP served as legal counsel and Bank of America Merrill Lynch (BofA Merrill Lynch) served as financial advisor to LGS Innovations. BofA Merrill Lynch has served as the sole or lead lender to LGS Innovations since the MDP/CoVant group’s investment in LGS Innovations in April 2014.
About LGS Innovations
LGS Innovations is a technology company delivering mission-critical communications products, R&D, and supporting services to U.S. defense, intelligence, and civilian agencies and commercial customers around the world. We create advanced solutions in wireless communications, signals processing and analysis, optical networking, photonics, routing and switching, and spectrum management. These solutions drive mission success in Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR), cyberspace operations, and network assurance. LGS Innovations is headquartered in Herndon, Virginia, with offices across the U.S. and overseas. We employ over 1,300 associates around the world, including more than 900 scientists and engineers. (Source: BUSINESS WIRE)
29 Jan 19. Filtonic shares gains as it narrows first-half loss and says turnaround strategy on track. Filtronic said lower expected demand for its mMIMO antenna product in the second half is a “major disappointment” but it will cope thanks to the good progress it has made in broadening its product portfolio and customer base. Filtronic makes antennas and filters for wireless telecoms infrastructure. Filtronic PLC (LON:FTC) shares gained as it narrowed its first-half loss and said its strategy to expand its product offering and focus on high margin areas of the business has led to improved visibility of future revenues.
The company, which makes antennas and filters for wireless telecoms infrastructure, posted a loss before interest, tax, depreciation and amortisation (LBITDA) of £0.1m for the six months ended November 30, compared to a loss of £1.2m a year ago.
Revenue dropped to £10.4m from £12.8m last year, reflecting the impact of the end of certain legacy filter product programmes.
Lower filter volumes, combined with reduced margins during the launch of the company’s new Massive MIMO (mMIMO) antenna product, resulted in an operating loss of £0.9mln, in line with last year.
Demand for mMIMO antenna to be lower than expected in second half
Filtronic said after achieving the required production ramp-up of mMIMO, an original equipment manufacturer client has advised the company that it expects second-half demand to the be “significantly lower” than originally forecast
“Our client has informed us they are still marketing this antenna, and we understand there will be an ongoing level of business, but demand volumes for this mMIMO variant beyond the current financial year are now uncertain,” chairman Reg Gott said.
“Whilst the lower demand now expected from the mMIMO launch programme is disappointing in the short term, the overall market outlook for antennas remains encouraging.”
Filtronic will take a £0.5m impairment related to development costs of mMIMO.
Strategy on track
The company has been taking steps to reduce its reliance on OEM customers, including the development of a portfolio of operator products. It recently announced the appointment of Quintel a distributor to the North American operator market.
It has also been turning its attention towards high margin products and decided to target critical communication markets to offset the “revenue volatility” of network roll-outs in the telecoms market.
Filtronic said demand from critical communications customers remains strong as it continues to develop opportunities in these markets.
“This focus has provided us with a significant level of baseline business and improved visibility of future revenues, along with further opportunities to grow our product offering and customer base,” Gott said.
Elsewhere, public safety products also continued to “perform well” and sales of transceivers to the telecommunications backhaul market were “encouraging“ in the first half.
Production of multi-year defence contracts is “progressing well” with further opportunities being developed. Having invested in additional production equipment, the firm hopes to increase output volumes further in the final quarter of this financial year.
“In summary, the lower demand forecast for mMIMO is a major disappointment, however, we have made good progress in recent years in increasing our resilience by broadening both our product portfolio and our customer base, which will help us cope with this unforeseen impact to the second half,” Gott said.
“Strong trading in the critical communications markets has enabled the group to trade at a very small LBITDA despite the reduction in telecoms revenues, and the base level of business that we continue to enjoy means our cash reserves are sufficient to operate at a lower level of revenue whilst we return the business to growth and profitability.”
Brexit contingency plan
The group added that it continues to assess the potential impact of Brexit but does not currently see any significant exposure to the likely adverse consequences of a no-deal scenario. Nevertheless, it has made contingency plans to mitigate potential disruptions in supply from certain European suppliers. (Source: proactiveinvestors.co.uk)
28 Jan 19. ASGN Acquires DHA Group. Acquisition Strengthens ECS’ Next-Generation IT Solutions. ASGN Provides Fourth Quarter 2018 Preliminary Financial Results. ASGN Incorporated (NYSE:ASGN), a leading provider of IT and professional services in the technology, creative/digital, engineering and life sciences fields across commercial and government sectors, has completed the acquisition of DHA Group, Inc. (DHA) for $46m in cash sourced from ASGN’s internally generated cash flows. DHA is a provider of mobility, cybersecurity, cloud and IT services to the Federal Bureau of Investigation (FBI) and other federal customers. DHA will become part of ASGN’s ECS Segment.
Founded in 1994, DHA has over 200 highly-cleared, technically-specialized employees committed to a range of national security missions. DHA’s services are delivered primarily through prime, full and open contracts. Its performance reputation in delivering technical support will strengthen ECS’ rapidly growing presence across cybersecurity and other operational domains in the national security and intelligence community. For 2018, DHA generated approximately $50m in revenues and is expected to grow approximately 20 percent year-over-year in 2019 and generate an EBITDA margin of 8.0 to 9.0 percent.
Commenting on the acquisition, Peter Dameris, Chief Executive Officer of ASGN said, “The DHA Group is an attractive acquisition for ECS and will help to further deepen ECS’ long-term relationship with strategic customers in homeland, law enforcement, defense and intelligence agencies. As we have previously announced, we intend to grow ECS to over $1bn in revenues on or before 2021 through strong internal growth and targeted acquisitions, which meet specific profile requirements, complement our current service offerings and enhance our value proposition to our clients.”
“ECS is committed to the FBI’s success and is excited to continue providing superior solutions and broader expertise to DHA’s existing customers and teaming partner companies,” said George Wilson, president of ECS. “We are also eager to offer expanded career opportunities to DHA’s talented employees as part of ECS’ performance culture.”
Dameris continued, “In addition to today’s announcement, we are also providing preliminary results for the fourth quarter of 2018. We expect revenues for the quarter to be approximately $929.7m, which is up 11.8 percent, on a pro forma basis, over the same quarter in 2017 and is the highest growth rate of any quarter during 2018.”
Fourth Quarter 2018 Preliminary Financial Results
ASGN today also announced preliminary results for revenues and Adjusted EBITDA (a non-GAAP measure) for the fourth quarter of 2018. Revenues for the fourth quarter of 2018 are expected to be approximately $929.7m, or $14.7m above the high end of its previously-announced estimates. Revenues for the quarter included approximately $7.1m in “pass through” product sales under one of ECS’ government contracts, which had not been expected to occur until 2019. Adjusted EBITDA for the quarter is expected to be approximately $109.0m, which is within the previously-announced estimates of $107.0 to $112.0m. Reconciliation of estimated net income to Adjusted EBITDA was included in the press release dated October 24, 2018.
These estimates are subject to change based on the completion of the company’s normal year-end review processes and completion of the 2018 audit. As previously announced, ASGN expects to release its financial results on February 13, 2019, followed by its regular quarterly conference call. At that time, ASGN will review its financial results for the fourth quarter and full year 2018, discuss more fully the DHA acquisition and provide financial estimates for the first quarter of 2019.
ECS Federal, LLC, a segment of ASGN, delivers advanced solutions and services in cloud, cybersecurity, artificial intelligence (AI), machine learning (ML), application and IT modernization, science, and engineering. The company solves critical, complex challenges for customers across the U.S. public sector, defense, intelligence and commercial industries. ECS maintains partnerships with leading cloud, cybersecurity, and AI/ML providers and holds specialized certifications in their technologies. Headquartered in Fairfax, Virginia, ECS has more than 2,400 employees throughout the U.S. and has been recognized as a Top Workplace by The Washington Post for the last five years. For more information, visit www.ECStech.com.
ASGN Incorporated (NYSE:ASGN) is one of the foremost providers of IT and professional services in the technology, digital, creative, healthcare technology, engineering, life sciences, and government sectors. ASGN and its divisions are viewed as best in class across multiple industries and have built an outstanding reputation for excellence over the past 33 years. ASGN is based in Calabasas, California, with multiple offices throughout the United States, Canada, and Europe. (Source: BUSINESS WIRE)
28 Jan 19. Caterpillar earnings hit by China slowdown. Shares in machinery maker tumble as it projects disappointing earnings for 2019. Caterpillar provided evidence on Monday of how the economic slowdown in China is hitting industrial companies with the bellwether equipment maker warning it expected no growth in sales in the country this year. With only a “modest” increase in worldwide sales now expected by the company, Caterpillar projected disappointing earnings for 2019, sending its shares sharply lower. The company also reported earnings that were at the bottom end of the company’s forecast for 2018 and fell short of Wall Street expectations for the fourth quarter. Shares in the company opened about 8 per cent lower at $125.98 on Monday. Although China represents only 5 to 10 per cent of Caterpillar’s revenues, the slowdown in sales there is very sharp after two years of rapid growth. It also highlights mounting concerns about the health of the country’s economy and particularly its industrial sector. Jim Umpleby, Caterpillar’s chief executive, said in statement: “Our outlook assumes a modest sales increase based on the fundamentals of our diverse end markets as well as the macroeconomic and geopolitical environment.” Full-year profit in 2019 is expected to come in the range of $11.75 to $12.75 a share, which compares with a median forecast of $12.73, according to a survey of analysts by Thomson Reuters. The reduction in guidance for earnings for this year in part reflects higher expectations for the tax rate, as well as the slowdown in sales growth.
In a presentation for investors, Caterpillar said it expected sales in China to be roughly flat this year compared to 2018. That would represent a sharp slowdown in a market that doubled in 2017 and grew 40 per cent last year. Andrew Bonfield, the company’s chief financial officer, said it was a “slowdown from a very rapid acceleration”. After customers bought a lot of equipment in the past two years, he said, it was to be expected that they would not need to replace it immediately. He said that demand in the North American market from the construction industry was still very strong, helped by a healthy economy and new pipelines being built by the oil and gas industry. Mr Bonfield added that the impact of US import tariffs on steel had been at the lower end of the company’s expectations, adding about $100m to its costs.
Last year the company announced price increases of 1 to 4 per cent for its machinery, although Mr Bonfield acknowledged that posted price rises were not always realised in full. Total revenue rose 11 per cent from a year ago to $14.3bn in the three months ended December 31, with the company pointing to higher sales volumes for construction equipment as a key driver. This was the highest since the fourth quarter of 2013, but barely matched the median forecast among analysts. Adjusted earnings of $2.55 a share came in 44 cents below Wall Street forecasts, while the $11.22 a share for the 2018 financial year came in at the low end of the company’s own range for $11-$12. Sales in Asia/Pacific, the biggest contributor to revenue outside its home market of North America, declined in the quarter due to “lower demand in China”, although it said this was partially offset by “higher demand in a few other countries in the region”. The company also said the strong US dollar also contributed to the sales decline. Having struck a record high of $170.89 a year ago, Caterpillar shares finished 2018 down 19.4 per cent, making them the fourth-worst performer in the Dow Jones Industrial Average, which sank 5.6 per cent. Concerns about slowing global growth in the December quarter hit the stock even harder. Notwithstanding some wobbles relating to weak Chinese data, Caterpillar shares have mostly tracked the broad equity market rally this year and were up 7.7 per cent in 2019 at Friday’s close. (Source: FT.com)
28 Jan 19. FLIR Systems, Inc. (NASDAQ: FLIR) announced today that it has acquired Aeryon Labs Inc., a leading developer of high-performance unmanned aerial systems (UAS) for the global military, public safety, and critical infrastructure markets for $200m. Aeryon’s vertical takeoff and landing quad-copter airframes integrate multiple sensors, including FLIR thermal technology, to provide users with immediate high-resolution intelligence, surveillance, and reconnaissance (ISR) capability.
“The acquisition of Aeryon Labs reinforces our long-term strategy to move beyond providing sensors to the development of complete solutions that save lives and livelihoods,” said Jim Cannon, President and CEO of FLIR Systems. “This acquisition, coupled with our acquisition of Prox Dynamics in 2016, greatly increases our unmanned systems solutions capabilities, expanding beyond nano-UAS into Group 1 UAS solutions for military. We intend to continue to invest and build this area of our business and broaden our capabilities as we view unmanned and autonomous solutions to be a significant opportunity for organic growth in the coming years.”
Rugged, reliable, and field-proven, Aeryon’s SkyRanger UAS are rucksack portable and can be deployed in minutes by a single operator. SkyRanger UAS are renowned for operating in demanding environments and inclement weather, including at high altitudes, gusting winds, and rain and snow. The latest additions to the SkyRanger family of aircraft establish a new benchmark for small UAS performance and reliability. Now with a modular and open architecture, end users and third party developers can create tightly integrated payloads and software systems for the SkyRanger platform, enabling rapid solution development, onboard artificial intelligence, and autonomous operations.
“We’re thrilled to join the FLIR family and to have a large, growth-oriented technology company as our new home,” said Dave Kroetsch, Co-founder and CTO of Aeryon Labs. “As drone technology and its markets evolve, customers are seeking UAS as just one component of a broader solution. While Aeryon has been evolving in that direction for the past few years, being part of FLIR Systems brings a path to include our hardware and software technologies in much bigger solutions than would have ever been possible on our own.”
Aeryon Labs is now part of the FLIR Government and Defense Business Unit’s Unmanned Systems and Integrated Solutions division. The transaction is expected to be $0.02 dilutive to FLIR Systems’ 2019 earnings due to anticipated product development investments, and accretive thereafter. FLIR Systems’ management will discuss this strategic acquisition during its 2018 Q4 earnings call scheduled for February 13 at 9 a.m. Eastern Standard Time.
28 Jan 19. VITEC, a worldwide leader in advanced video encoding and streaming solutions, today announced the strategic acquisition of T-21 Technologies, a provider of OTT streaming media solutions for media operations, broadcasters, and content owners worldwide. Kevin Ancelin, founder and CEO of T-21 Technologies, will join VITEC as vice president of worldwide broadcast sales.
“The acquisition of T-21 brings Kevin’s 32-year industry experience and knowledge to VITEC as we expand our product and strategy focus on the broadcast market,” said Mark D’Addio, senior vice president, VITEC. “His expertise in product and market development will expedite our new product roadmap and sales efforts for leading broadcasters worldwide.”
VITEC’s HEVC technology and solutions make it more efficient than ever to deliver the highest quality contribution links over dedicated and public IP networks, fiber, and satellite. Powered by VITEC’s internally developed HEVC GEN2+ encoding core, the MGW Ace Encoder and Decoder establish new industry standards in video quality, bit rate efficiency, and ultra-low latency (ULL). This revolutionary solution provides best-in-class HEVC video quality up to 4:2:2 10-bit.
“I look forward to this new chapter and challenge in my career. VITEC’s technology and dedication to the IP video market is unmatched,” said Ancelin. “With VITEC’s GEN2+ innovation, the MGW Ace portable hardware encoder delivers no visible latency for the most sensitive video quality and low latency applications. As we develop our next generation of products and marketing, with a focus on broadcast applications, GEN2+ will further transform the contribution market.”
26 Jan 19. Cybersecurity investment set to level out after years of historic growth. Driven by a boon of high-profile hacks, investment into cybersecurity firms has risen five-fold in the last five years, according to Strategic Cyber Ventures, an investment firm. But that rosy outlook is set to suffer setbacks in 2019, the company said in an investment note, a sign that the cybersecurity market that is overheating. Companies poured more than $5bn into the cybersecurity venture capitalist market in 2018, according to the firm. That rate is unsustainable, Chris Ahern, a principal at the firm told Fifth Domain.
“I can’t see it continue to ramp up,” Ahern said. “I predict that in 2019 it will be flat or total investment will be down. That money (invested) needs to find exits over the next five to ten years.”
Major investments in cybersecurity firms in 2018 included $295m into the virtual private network app AnchorFree, $200m into the endpoint protection company Crowdstrike, and $200m into the endpoint protection firm Tanium
Crowdstrike and Tanium have contracts with the federal government. Tanium won a contract worth several hundred million dollars from the Defense Innovation Unit to increase security of Army networks in 2017
“There is big money in IPO’s,” Ahern said. They read about big breaches and hackers every other week. And they come together and say ‘We need to start investing in cyber.’”
Ahern said that his firm invests on the principle of “intruder suppression.”
“It’s all about how we limit lateral movement in the network and how do we limit dwell time.”
Data from Strategic Cyber Ventures shows a disproportionate amount of investment is located in the Maryland area, which is home to the NSA headquarters in Fort Meade.
Roughly 22 percent of investments from venture capitalist firms go to cybersecurity firms based abroad, Ahern said. That figure is roughly double what it was in 2014 and is a sign that the global cybersecurity market is expanding at a fast rate.
In 2017, the Pentagon awarded more than $1.22bn to cyber contractors, according to research by Frost & Sullivan. Experts have told Fifth Domain that Pentagon spending trends could drive consolidation of the cybersecurity industry. Because many government investments are meant to boost efficiency, such as cloud computing, their total spending may shrink, according to Brad Curran, a researcher at Frost & Sullivan.
The increase in money from cybersecurity venture capital firms may also be explained by empowered chief information security officers, according to 2015 research from the Darwin Deason Institute for Cyber Security at Southern Methodist University.
Sparked by hack of healthcare provider Anthem in 2015, senior executives have become more concerned about the state of cybersecurity in their company.
“This led to support not only at the senior management level, but in many cases at the board level as well,” the Southern Methodist report said. “We believe that this is a period when many firms will elevate cyber to being a first-class risk which will lead to a significant adjustment to the role of the CISO.” (Source: Fifth Domain)
25 Jan 19. CENTECH and Thales launch AI@CENTECH to boost start-ups to success in Artificial Intelligence.
- To support the development of start-ups working in the field of Artificial Intelligence, Thales has teamed with CENTECH, Québec’s largest start-up incubator, created by the École de Technologie Supérieure in Montreal.
- This strategic partnership will provide start-ups with access to the Thales Group’s technological expertise, business insights and digital capabilities that will take their concepts and prototypes to the next level of maturity
- Thales has invested close to 7bn euros in digital technologies since 2014, including the planned acquisition of Gemalto.
The explosion of digital technologies is an essential ingredient to boost innovation, accelerating the creative process to develop new solutions for a world that is increasingly data-driven, connected, immersive and reliant on autonomous systems. Thales has an important role to play in accelerating the digital transformation of its partners around the world. Working with CENTECH, Thales will support projects created by start-ups in the field of Artificial Intelligence, which is one of Thales’ four key digital technologies, alongside connectivity, big data and cybersecurity. CENTECH has been recognised by the University Business Network (UBI) as one of the most effective accelerators in the world.
25 Jan 19. Pre-Close Trading Update and Notice of Results. SCISYS Group PLC (“SCISYS” – AIM: SSY; ESM: SCC), the supplier of bespoke software systems, IT-based solutions and support services to the space, media & broadcast, government, defence and commerce sectors, announced a trading update for the year ended 31 December 2018, before entering into its close period.
Trading Update: The Directors expect that the Company’s trading results for 2018 will comfortably meet current market guidance in respect of revenues and adjusted operating profit. The Group’s order book remains strong, bolstered by a series of contract wins with an aggregate value of c£23m announced since mid-December. The closing 2018 order book was in the region of £100m (2017: £91.3m). Net cash flow for 2018 was healthy, with the year-end net debt reduced to £3.1m (2017: £5.9m) despite substantial exceptional cash costs for the execution of Brexit contingency plans and payment of a final earnout settlement relating to the December 2016 Annova acquisition.
We continue to see solid organic growth across the Group, notably in our Space and Enterprise Solutions & Defence (ESD) divisions; both saw a significant expansion in the size of their respective teams to meet demand. Since the re-location of the Group’s parent company to Ireland at the end of November, the Directors have been pleased to announce a succession of strategic orders for the Space division, including key contract wins for the EU-funded Galileo satellite navigation programme. ESD’s order book was further underpinned by a significant defence sector contract win in December 2018.
Accordingly, the Directors believe that they have mitigated Brexit risks particularly affecting the Group and are on a good footing to navigate Brexit going forward. Intra-Group currency hedging arrangements will continue to mitigate exchange-rate risks.
Our Munich-based subsidiary, Annova, was re-named SCISYS Media Solutions GmbH in December 2018. A formal merger is planned with SCISYS’ Media & Broadcast division in 2019, ahead of previously anticipated timescales. This will result in a combined division with main offices in both Dortmund and Munich, led by Michael Schüller, who was previously the CEO at Annova.
Mike Love, Chairman of SCISYS, said: “We remain optimistic and confident for the Group’s prospects going forward, given in particular the strength of its order book and end of year net debt position. SCISYS is well positioned to deal with Brexit and other challenges faced by the business community in 2019.”
SCISYS expects to report its preliminary results for the year ended 31 December 2018 on 28 March 2019.
25 Jan 19. Shares in Scisys (SSY) were marked up 4 per cent this morning, following its pre-close trading update for the year to December 2018. Management expects results will “comfortably meet” current market expectations for both revenues and adjusted operating profits. The group’s order book remains strong, helped by various contract wins announced since mid-December, which are collectively valued at around £23m. The closing order book was approximately £100m, up from £91.3m a year previously. Net cash flow was also positive, and year-end net debt fell from £5.9m to £3.1m – notwithstanding exceptional costs in relation to its Brexit contingency plans and the final earnout payment for its 2016 Annova acquisition. Buy. (Source: Investors Chronicle)
21 Jan 19. Scisys on a mission for highly profitable growth. If there was any uncertainty that Scisys (SSY:175p), a supplier of bespoke software systems to the media, space, defence and commercial sectors, would be adversely affected by the UK’s exit from the EU, then the company has quashed the sceptics in emphatic style.
In the past five weeks, the company has won six major contracts, including an 18-month award worth €11.2m (£10m) from Thales Alenia Space France, the prime contractor to the European Space Agency (ESA), for work on improving security and cyber resilience capabilities in the next phase of the Galileo programme.
Galileo is Europe’s global navigation satellite system, providing a highly accurate, guaranteed global positioning service under civilian control. Scisys also won a €3m initial order from Thales Alenia Space France and a €5m contract funded by the EU and ESA from a prime contractor on other segments of the Galileo programme, underlining the space division’s position as an expert software supplier to Europe’s global navigation satellite system. The decision to re-domicile the parent company to Dublin to protect EU-funded work proved decisive in securing all these contracts.
Scisys also won a four-year contract worth €2.8m for work on maintaining the operational status of the automated software system that supports individual spacecraft missions from ground stations on an ESA-funded project. In total, the company has won contracts worth €23.3m in the space division alone since mid-December, the latest being a €1.3m award with Airbus, the prime contractor to the ESA and the European GNSS Agency, for developing EGNOS V3, Europe’s regional satellite-based augmentation system, which improves the performance of global navigation satellite systems, such as GPS and Galileo.
The raft of contract wins not only boosts the last reported record order book of £97m, but de-risks expectations that Scisys can deliver a 15 per cent boost to both its pre-tax profits and EPS to £5.3m and 14p in 2019 on revenues of £59m, as forecast by analysts at broking house FinnCap. I would also flag up that the company’s net debt has been slashed from £9m when I first advised buying the shares 15 months ago, at 102p (‘Tune into a media play’, 11 Oct 2017), to £3.3m by last summer, while at the same time the board has maintained a progressive dividend policy. Analysts predict the payout per share will be raised from 2.2p in 2017, to 2.4p in 2018 and 2.6p in 2018.
The deleveraging of the balance sheet, a growing record order book and the slew of EU-funded contract wins, should give investors confidence to value the shares on a far higher rating than a forward PE ratio of 12.5 for 2019, one reason why I believe fair value is now around 230p, having last advised buying them, at 145p (‘Exploit a mispriced Brexit winner’, 24 Oct 2019). Buy. (Source: Investors Chronicle)
BATTLESPACE Comment: BATTLESPACE has been tracking Scisys for some time and has been impressed with e growth and the product breadth of the company. So impressed that the Editor has bought some shares!