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20 Nov 20. UK government secures satellite network OneWeb. Acquisition of global satellite communications company, OneWeb, completes today, following successful government bid in July 2020.
- Transaction completes to secure the future of British satellite company, OneWeb
- strategic investment underlines scale of Britain’s ambitions to be at the forefront of space technology
- satellite constellation to provide high-speed internet access across the globe
This is a significant strategic investment, demonstrating the government’s commitment to the UK’s space sector and ambition to put Britain at the forefront of a new commercial space-age. OneWeb is now staffing up to complete the development of its first generation constellation, adding new employees in the UK, and we will continue to work with OneWeb to maximise the benefits to the UK from the OneWeb program, both before and after commercial launch.
The company has the foundation of the network already in place with 74 satellites launched and infrastructure in development in strategic locations around the world. The company is launching another 34-36 satellites in December, bringing its in-orbit fleet to 110 satellites. OneWeb is on track to begin commercial connectivity services to the UK and the Arctic region in late 2021 and will expand to delivering global services in 2022.
Business Secretary Alok Sharma said, “This strategic investment demonstrates government’s commitment to the UK’s space sector in the long-term and our ambition to put Britain at the cutting edge of the latest advances in space technology. Access to our own global fleet of satellites has the potential to connect people worldwide, providing fast UK-backed broadband from the Shetlands to the Sahara and from Pole to Pole. This deal gives us the chance to build on our strong advanced manufacturing and services base in the UK, creating jobs and technical expertise. The government is committed to work with OneWeb’s shareholder partners to use this investment as a platform to promote UK jobs and supply chains and protect UK critical assets and intellectual property.”
OneWeb will provide a new source of broadband connectivity for businesses, communities, and governments around the world. It could also improve connectivity in a broad range of sectors, including aviation, maritime, government, and enterprise customers, unlocking digital services and applications in a wide range of locations that historically have not access to low latency broadband connectivity.
Sunil Bharti, Founder and Chairman, Bharti Global said, “Together with our partners at HMG, we are looking forward to a new Low Earth Orbit opportunity. Innovation, resilience and growth in the high-tech sector are all served by this powerful global opportunity. By the end of 2022, OneWeb will be a truly global force for good.”
Graham Turnock, Chief Executive of the UK Space Agency, said, “This landmark government investment marks the start of an incredibly exciting period for OneWeb and the whole UK space sector, which can play a vital role in our economic recovery. Global connectivity has never been more important and there is a significant opportunity for satellite constellations to deliver a range of valuable services to consumers, businesses and government.”
OneWeb was formed in 2012, and has been developing cutting-edge satellite technology from its facilities both here in the UK and in the United States.
The UK government will have a final say over any future sale of the company, and over future access to OneWeb technology by other countries on national security grounds.
- The UK space sector is an economic success story, growing by over 60% since 2010. The sector already supports £300bn of UK economic activity through the use of satellite services, and is expected to grow further as new commercial opportunities are unlocked by this agreement
- OneWeb was formed in 2012 and has been developing cutting-edge satellite technology from its facilities both here in the UK and in the United States
- earlier this year, government announced a $500m investment to acquire OneWeb together with leading international telecoms operator Bharti Global
- critical assets protected include OneWeb Spectrum. Find out more on Ofcom’s site
BATTLESPACE Comment: This acquisition was made in the Dominic Cummings insured ‘Dash for the White Heat of technology’ and a UK DARPA. Now Cummings has dashed for the exit and his influence has gone from government and thus his championing of OneWEb. The government was warned about this acquisition, costing the taxpayer some £500m, that it would not live up to Cummings technology expectations or job creation in the UK given the problems associated with receivers required for LEO constellations. It is noted from this announcement that no statement has been made about the suitability for OneWeb to replace the EU Galileo systems as a GPS system.
19 Nov 20. Woodward: Fiscal 4Q Earnings Snapshot. Woodward Inc. (WWD) on Thursday reported fiscal fourth-quarter earnings of $57.2m. The Fort Collins, Colorado-based company said it had net income of 89 cents per share. Earnings, adjusted for one-time gains and costs, were 75 cents per share. The results exceeded Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of 54 cents per share. The maker of cockpit controls and other equipment for the defence and aerospace markets posted revenue of $531.3m in the period, which also beat Street forecasts. Five analysts surveyed by Zacks expected $520.3m.
For the year, the company reported profit of $240.4m, or $3.74 per share. Revenue was reported as $2.5bn. Woodward shares have decreased 7% since the beginning of the year. In the final minutes of trading on Thursday, shares hit $110.03, a decrease of nearly 5% in the last 12 months. (Source: Google/ AP/ https://www.660citynews.com/)
19 Nov 20. Houlihan Lokey Advises Exide Technologies. Houlihan Lokey served as the financial advisor and assisted in initiating, structuring, and negotiating each transaction on behalf of its client Exide Technologies. These transactions underscore Houlihan Lokey’s long-standing reputation and credentials as a premier advisor to the energy storage and metals recycling sectors globally. Operating assets of Exide Technologies’ Americas business have been acquired by Battery BidCo LLC, an affiliate of Atlas Capital Resources III LP, pursuant to Section 363 of the U.S. Bankruptcy Code. The transaction closed on August 25, 2020. Exide Holdings, Inc., has sold substantially all of its European/Rest of World (EU/ROW) operations to existing noteholders pursuant to a Chapter 11 plan. The transaction closed on October 26, 2020.
19 Nov 20. Aim-traded SRT Marine Systems (SRT:37p), a global leader in AIS, an advanced identification communications technology used to track and monitor maritime vessels, has reported a first half operating loss of £2.4m as Covid-19 restrictions held back work on its large systems business. This was expected. More importantly, SRT has now restarted work on its £32m flagship Philippines project that involves the installation of monitoring systems, coast stations, vessel transceivers and satellite data feeds. The company’s gross cash of US$5m easily covers the working capital needs to fulfil this contract ahead of the receipt of milestone payments. When fully commissioned next year, it will be the most sophisticated national fisheries monitoring and management system in the world. There should be follow on contract opportunities, too, as the monitoring system expands from the existing 5,000 vessel target to the 200,000 strong Philippine fishing fleet.
It’s worth noting the comments of chairman Kevin Finn and chief executive Simon Tucker in relation to three major contract awards with customers in The Middle East, worth £62m in revenue over a two-year implementation period. Having been delayed due to Covid-19 lockdowns, Mr Finn says the final procurement and contracting process is nearing completion on up to US$100m of contracts in SRT’s US$550m validated pipeline across 17 projects. Mr Tucker expects to “report significant progress in the near future.”
The longer-term outlook remains promising, too, given that the global political landscape is becoming increasingly uncertain, while security threats become ever more diverse and frequent. This can only drive demand for SRT’s marine domain awareness technology which also has applications in national security, border control and search and rescue. Indeed, a country’s coastline is often its most vulnerable border, and one that needs protecting in light of growing migrant and immigration concerns and the fact that waterways are a significant source of economic activity.
Admittedly, the absence of earnings estimates in the market leaves investors in the dark, but my financial models suggest that SRT should be able to generate annual revenue of £50m and pre-tax profit above £10m once the aforementioned contracts are signed. This projection not only reflects the high gross margin (40 per cent) on system projects, but also the operational gearing of the business once annual fixed overheads of £7m are covered.
SRT’s shares hit my 55p target in early January to deliver a 51 per cent return after I initiated coverage around the current price (‘Set sail for a profitable voyage’, 16 August 2019) and I subsequently advised buying in again at, 25.5p (‘Stockpicking for bear market gains’, 16 April 2020). I now feel that imminent news flow on SRT’s major contracts should drive a further re-rating of shares in the £60m market capitalisation company. On a bid-offer spread of 35.5p to 37p, they rate a buy. (Source: Investors Chronicle)
19 Nov 20. Voyager Space Holdings, Inc. Announces Intent to Acquire The Launch Company. Alaska-based launch services company will be the first acquisition in the launch sector for leading space exploration company. Voyager Space Holdings, Inc. (Voyager), a global leader in space exploration, today announced its intent to acquire The Launch Company, subject to customary closing conditions. The Launch Company specializes in developing standardized hardware, ground support equipment, and processes to help next generation space companies gain access to orbit faster, cheaper, and more reliably. The Launch Company has worked with Virgin Orbit, Relativity Space, Firefly Space, Altius Space Machines, Pacific Spaceport Complex – Alaska, Aurora Launch Services, and more, while also participating in the DARPA Launch Challenge. This will be Voyager’s first acquisition in the launch category, a crucial component in the space supply chain.
“Reliable, affordable access to space starts at the launch site. With the continued growth and increasing frequency of commercial launches in the U.S., we’ve seen the demand for our products and services take off,” said Ben Kellie, CEO and founder of The Launch Company. “Voyager’s proposal to acquire The Launch Company was an easy decision because it will allow us to scale up our services even more rapidly while also giving us the ability to focus on that growth rather than spending resources on the time-consuming requirements that running a growing business entails. We are grateful for Voyager’s partnership and are eager to see what we can achieve together.”
Based in Anchorage, Alaska, The Launch Company was established to help both NewSpace commercial clients, as well as DOD and USAF assets, get to space faster and more affordably by streamlining the launch process, in part through automation. The company is working to build the world’s first multi-user mobile launch site to help fill the gap between launch site demand and availability. They were recently selected among the top finalists in this year’s AFWERX Challenge and are pursuing a prototype of their site design. The Launch Company’s goal with this new site is to be able to service the widest range of launch vehicles in the market, including small to large vehicles for both launch and landing operations.
“The need for affordable, reliable and efficient launch services continues to grow in lockstep with the expansion of the launch sector and the rest of the overall commercial space sector. Since Voyager was created, launch services has always been a capability that we have liked and we have now found a partner that fits the mold perfectly,” said Matthew Kuta, president and COO of Voyager Space Holdings. “The work Ben and the rest of the team at The Launch Company are doing to transform the launch industry is incredibly exciting and we are eager to support their expansion.”
Led by Matthew Kuta and Dylan Taylor, Voyager seeks to increase vertical integration and mission capability to enable humanity’s most ambitious projects. In addition to The Launch Company, this year Voyager has acquired Pioneer Astronautics and Altius Space Machines.
For more information on Voyager please visit: https://voyagerspaceholdings.com/
About Voyager Space Holdings, Inc.
Voyager Space Holdings, Inc. is a global leader in space exploration. Voyager’s long-term mission is to create a vertically integrated publicly traded NewSpace company capable of delivering any mission humans can conceive. By centralizing shared services functions at the parent company level, Voyager enables engineer founded and led subsidiaries to focus more on development of innovative products and services. The firm’s first in industry model is uniquely tailored to support the growth needs of commercial space companies by offering an alternative solution to traditional private capital models and replaces them with a longer-term approach as a provider of permanent capital. Voyager is led by founders and space industry veterans Dylan Taylor and Matthew Kuta, with a Board of Directors that includes National Security Expert and four-star Air Force General William Shelton, leading investor Gabe Finke, and a world leading planetary Scientist, Dr. Alan Stern. To learn more about Voyager Space Holdings, Inc., please visit: http://voyagerspaceholdings.com/
About The Launch Company
The Launch Company, LLC is a leader in developing the systems, hardware, and processes to accelerate NewSpace companies to orbit. Their mission is to develop the world’s first multi-user launch site to service the dozens of new rockets under development around the world. They are building to that goal by delivering designs, flight-critical hardware, and ground support equipment to leading rocket companies around the U.S. By focusing on automation, and servicing as many vehicle configurations as possible, they help make the business case for affordable, resilient access to space that makes launching rockets as routine as commercial air travel. The Launch Company’s Alaska-based team is led by founder Ben Kellie and comprises NewSpace veterans with dozens of combined launch and landing experiences on land, in air, and at sea. They are focused on building a diverse, forward-thinking company that tackles the biggest challenges in aerospace. To learn more about The Launch Company, please visit: www.launch-company.com (Source: PR Newswire)
19 Nov 20. UK Defence – A Shot in the Arm. BAE Systems (BA/ LN), BUY, 499.10p PT: 600.00p.
The UK has announced a £16.5bn increase in Defence spending above existing commitments over the next four years. The extent to which that creates new opportunities or addresses an existing funding shortfall can be debated, but it is nonetheless welcome news, in our view.
A pleasant surprise. We didn’t see UK defence spending as a significant risk, but neither did we see it as an opportunity. The UK Government today announced a £16.5bn increase above its existing manifesto commitment. The latter was to continue to exceed the NATO target of spending 2% of GDP on defence and increase the defence budget by at least 0.5% above inflation every year of the new parliament. There is limited detail on where the extra funding will go, but the announcement refers to positioning the UK as a global leader in domains such as cyber and space and addressing weaknesses in the defence arsenal. The Government also intends to announce a new agency dedicated to Artificial Intelligence, the creation of a National Cyber force, and a new Space Command.
The UK Defence Budget. The Public Expenditure Statistical Analyses published by HM Treasury in July 2020 show a 2020/21 plan of £39.2bn for Defence, up from £36.4bn in 2019/2020. The respective Defence Capital Budgets are £10.3bn for 2019/2020 and a planned £10.5bn in 2020/2021. In February 2020, the UK National Audit Office (NAO) issued The Equipment Plan 2019 to 2029. As in prior years, the NAO highlighted that the funding of the Equipment Plan was contingent upon planned cost savings being achieved (£7.8bn) and that there was around a £6bn shortfall in affordability between 2019/2020 and 2023/2024 for which a contingency of just £1.5bn existed. In total between 2019/20 and 2028/2029, the UK planned expenditure of £85.6bn on Procurement and £97.2bn on support.
BAE and Cyber. In FY19, we estimate BAE’s total Cyber domain revenue was around £1bn, or 5% of Group sales. We estimate that around 45% of that revenue was generated in the USA, and around 37% (roughly £370m) from UK and other governments. BAE’s commercial Cyber revenues accounted for the remaining 18% (around £180m), although we expect business disposals (notably SilverSky) to reduce that in FY20. In the Group context, it is hard for Cyber to move the needle, but even growth of £100-200m over the next four years would be welcome. At the 1H20 stage, BAE commented that: “The services and products we offer in our Government business ensure that we are well-placed to deliver growth a cyber security becomes an increasingly important part of the nation’s security”. Today’s news suggests the latter has just happened.
A shot in the arm. Whether the proposed increase in the defence budget will provide new opportunities or simply address existing funding challenges can be debated, but it is nonetheless welcome. We note that while BAE is not synonymous with Space, it does offer a range of Space products such as sensors, signal processing, command, control communication systems, and radiation hardened electronic. As for the UK launching its own rocket, we believe it has done so only once before in 1971. Why the UK now needs its own rocket eludes us. (Source: Jefferies)
18 Nov 20. Asolvi boosts commitment to DACH market with TIVAPP acquisition. Asolvi, Europe’s leading provider of field service and contract management software, today announced that it has agreed to acquire TIVAPP, the leading German field service solution for the fire protection and security sector.
TIVAPP is a specialist service, inventory, test documentation and billing software solution, developed by fire prevention professionals. Founded in Germany, the company has over 20 years of experience in the sector. During that time, TIVAPP has built up a market-leading customer base and established itself as the region’s premier provider of complete solutions for fire protection specialists.
The deal will see the TIVAPP team of Fire and Security experts joining Asolvi. This team, in combination with TIVAPP’s market-leading software, will strengthen Asolvi’s position across the DACH market and enhance its native-language customer support. It will also expand existing sales functions across the region, positioning Asolvi for further sustainable growth.
The acquisition demonstrates the strategic importance of the DACH region to Asolvi, as well as the strong growth potential Asolvi sees for the German Fire and Security sector. This is the sixth acquisition since 2016 and forms part of Asolvi’s broader strategy to expand organically, and where appropriate, through acquisitions across Benelux, DACH, the Nordics and the UK.
Commenting on the transaction, Pål M. Rødseth, CEO of Asolvi, said: “We are thrilled to welcome TIVAPP into the Asolvi family. We are already the leading provider of Alarm, Fire and Security service management solutions in the UK and Sweden, TIVAPP fits perfectly into our core strategy of expanding our German and Central European offering. TIVAPP’s native-language expertise and experience will be of central importance as we aggressively pursue opportunities across the region, which will consequently allow Asolvi to add size to developments and meet even further demands of customers in the very near future. TIVAPP’s acquisition represents a superb opportunity for the company’s existing management and to our staff, and we look forward to working closely alongside them as we pursue our common aims and objectives and advance into the future.”
Harry Liedtke, CEO of TIVAPP, added: “Joining with Asolvi makes huge sense for us. Combining our expertise will allow us to build market share and add resources at a much faster pace. It’s with great excitement that we enter this new phase, joining one of Europe’s leading field service management software companies. I am thrilled to be continuing TIVAPP’s journey under the Asolvi umbrella and seeing the benefits this will bring to our organisation and our employees.”
Financial terms of the deal were not disclosed, Mayer Brown and Deloitte acted as advisors to Asolvi.
17 Nov 20. Alpine 4 Technologies, Ltd. (ALPP) Enters the Commercial Drone Market With its Acquisition of Impossible Aerospace Corporation. Alpine 4 Technologies, Ltd., (OTCQB: ALPP) owner of leading small market businesses, announced today that it has entered into a binding merger agreement with Impossible Aerospace Corporation. Impossible Aerospace builds high-performance electric aircraft and drones. Its customers range from the US Airforce to the City of Santa Clara, and other municipalities. Impossible Aerospace is Alpine 4’s first acquisition in the UAV space and will serve as a cornerstone to build upon. The shareholders of Impossible Aerospace are primarily a grouping of larger venture capital funds such as; Bessemer Venture Partners, Eclipse Ventures, Airbus Ventures, and its CEO, Spencer Gore. The transaction will be completed in a reverse triangular merger transaction with a newly formed subsidiary of Alpine 4. Upon meeting the final closing conditions, Impossible Aerospace will be a wholly owned subsidiary of Alpine 4. Impossible Aerospace and Alpine 4 expect to have the closing conditions meet by December 10th 2020. Mr. Gore has been retained by the Company to help assist in the knowledge transfer of US-1 Drone and to assist in procuring new US Military Contracts.
Kent Wilson, CEO of Alpine 4, had this to say, “The essence of Alpine 4 is our business model of DSF- Driver, Stabilizer, Facilitator. For the past 4 years, we have been actively acquiring revenue-generating companies that fall into the Stabilizer and Facilitator categories. We purposefully did this to add infrastructure and substance to our corporate holdings. The Driver category is a whole different animal and typically consists of companies that are early revenue but have the potential for explosive growth and opportunity. I recognized early on that Impossible Aerospace (IA) was what I call a unicorn Driver company. They checked off all the boxes; patented or patentable IP, leading-edge but not bleeding edge technology, well-funded development behind its IP, and a market space of $5bn or larger. Couple that with the fact that Alpine 4’s subsidiary, Quality Circuit Assembly, Inc. has been building many of the essential components that go into Impossible Aerospace’s revolutionary US-1 drone, furthering our desire to make the acquisition.
Early in the manufacturing relationship with Impossible Aerospace (IA), I expressed my interest in Alpine 4 one day acquiring IA to our sales leadership team at QCA. This year we were able to have a substantive dialogue with Spencer Gore, the CEO of IA, about what a transaction might look like. We both agreed that Alpine 4 and its vast manufacturing resources and commercial connections would make IA a home run in the Alpine 4 umbrella of companies.”
Spencer Gore, CEO of Impossible Aerospace commented, “Alpine 4 and Impossible Aerospace are combining with a simple mission: to build the nation’s most vertically integrated UAV manufacturer. While most domestic drone makers today rely on a jumbled network of third-party vendors for key components, we envision a single factory that receives raw materials in one door and ships validated aircraft out the other — enabling better products, faster development cycles, and higher profit margins. Impossible Aerospace’s shareholders all believe the long-term growth opportunity of the combined company exceeds that of its parts, and are excited to take this next step on the fulfillment of our mission to build the world’s most capable aircraft.”
- Mature and Highly Developed Drone Ecosystem: The acquisition of IA will allow Alpine 4 to dominate the emerging drone market with market-leading airframe and battery technology that enables real missions over 70 minutes.
- Multiple Large Market Opportunities: The ancillary markets of EMS Surveillance and Short Haul Delivery that can be supported by IA’s drone technology are large and growing.
- Patented IP: The Intellectual Property granted in the purchase of IA by Alpine 4 is supported by two patents pending and five provisional patents.
- Vertical Manufacturing: Having the IA manufacturing process within our subsidiary, Quality Circuit Assembly, Inc., will greatly enhance our ability to push production efficiencies to the front line. The time it takes to go from prototype to production will be cut in half.
Impossible Aerospace: IA builds high-performance electric aircraft that save lives. Founded in 2016 by former Tesla engineer Spencer Gore, the company unveiled its US-1 aircraft in 2018, unique for its long endurance and U.S. origin. The company was formerly backed by Bessemer Venture Partners, Eclipse Venture and Airbus Ventures.
https://www.cnbc.com/video/2019/03/29/ex-tesla-engineer-wants-to-reinvent-aviation-at-impossible-aerospace.html (Source: PR Newswire)
16 Nov 20. CAE Acquires Flight Simulation Company. CAE today announced that it has acquired all the issued and outstanding shares of Flight Simulation Company B.V. (FSC) for a cash consideration of approximately €70m (approximately C$108m) paid to the sellers, calculated on the basis of an enterprise value of €100m (approximately C$155m).
The acquisition expands CAE’s ability to address the training market for customers operating in Europe, including airline and cargo operators. It provides CAE with an expanded portfolio of customers and an established recurring training business which is highly complementary to CAE’s network. FSC is based in Amsterdam and includes a modern fleet of mainly CAE-built full-flight simulators (FFSs) and training devices, comprised of nine narrow body B737 and A320 FFSs, two widebody aircraft FFSs and one regional jet. This acquisition is consistent with CAE’s internal acquisition criteria and capital allocation priorities, similar to its other recent bolt-on acquisitions, and is expected to be accretive to earnings in its first full year.
“CAE is well positioned in the current environment, with access to bolstered capital resources, to enhance its market presence with selective, value-based acquisitions within its core. The acquisition of FSC will allow CAE to better support its customers and expand its addressable market,” said Marc Parent, CAE’s President and Chief Executive Officer.
Flight Simulation Company (FSC) was founded in 2005 and is based in Amsterdam, in proximity to Schiphol Airport. It provides total training solutions as well as instructor provisioning. It operates out of a 12-bay facility equipped with Airbus A320, Boeing B737, Boeing B747, Boeing B787 and Embraer E190 full-flight simulators. www.fsctraining.com (Source: defense-aerospace.com/CAE)
17 Nov 20. ST Engineering today announced organisational changes that will position the Group for its next phase of growth, and propel it towards its aspiration to become a global technology, defence and engineering powerhouse.
Effective 1 January 2021, ST Engineering will be reorganised as Commercial and Defence & Public Security clusters, replacing the sector-structure of Aerospace, Electronics, Land Systems and Marine.
New Structure Aligns to Global Growth Strategy and Strengthens Customer Focus
The new organisation structure is designed to enable better execution of the Group’s global growth strategy of strengthening its core businesses, and pursuing growth in smart city and international defence businesses. It is also designed for customer-centricity, enabling the business clusters to build deeper and more strategic customer partnerships. This change provides greater effectiveness in resource allocation, and also helps accelerate the development of deeper domain expertise to further enhance the performance of its businesses.
The Commercial cluster will fuel the Group’s international growth through areas in Commercial Aerospace, Urban Solutions and Satellite Communications domains, to be known as Global Business Areas (or GBAs) to reflect the Group’s desire to build global champions. The Commercial Aerospace GBA will continue to drive long-term growth of the aerospace businesses in Aerostructures and Systems, MRO and Aviation Asset Management. Similarly, Urban Solutions and Satellite Communications teams will drive the Group’s smart city business growth. This cluster combines the Group’s smart city technologies and capabilities, which now reside in the four sectors, into one integral unit.
The Defence & Public Security cluster will integrate capabilities to be organised as a single cluster comprising Defence Business Areas or DBAs, namely Digital Systems and Cyber, Land Systems, Marine and Defence Aerospace. The design of this cluster is aligned to the
integrated approach for defence technology development and deployment as well as customer engagement. This cluster will focus on serving the evolving needs of its customers in defence and public security as well as critical infrastructure segments. It will also continue to pursue growth in international defence, and public safety and security businesses.
“In the last three years, we were focused on delivering results by executing our strategy of strengthening our core businesses, and pursuing growth in smart city and international defence businesses,” said Vincent Chong, President & CEO of ST Engineering. “The environment today is one where technological advancements and shifting customer demands are catalysing disruptive business models and rapidly transforming the competitive landscape. The time is now right for us to create a sharper and more agile organisation that will be highly attuned and responsive to our customers’ needs in the new world.”
“The impetus for this reorganisation was our desire to achieve global success, but COVID-19 has reinforced the need for change with fresh urgency. Even as we keep the Group on an even keel amid challenges presented by COVID-19, we are proactively undertaking this organisation redesign to better position ST Engineering for global growth in the years ahead,” added Vincent.
Leverage Group Scale, Deepen Technology and Engineering Core
As the Group transitions into the new organisation structure, it will continue to leverage its strong fundamentals as well as group scale and resources in shared management services.
It will also further deepen its technology and engineering core. In the last few years, the Group has been intensively investing in areas such as data analytics and cybersecurity technologies as key business enablers through its Group Technology Office. It will now establish a Group Engineering Centre that will work closely with this Technology Office to drive advanced technology and engineering applications for both defence and commercial businesses.
The GroupEngineering Centre will focus on continuous innovation, translating immediate to near-term technologies into products and solutions. The centre will have engineering teams in select areas, formed by pooling resources across the Group to provide support to business units. The teams in the Group Technology Office and the Group Engineering Centre will augment business-specific engineering teams that remain with the business units. These two functions will also accelerate ST Engineering’s digitalisation push, especially in leveraging the Group’s technology competencies to embed digital innovation into its products and solutions for added differentiation and competitive edge. The domains that the Group will focus on at the initial stage include Autonomous System-of-Systems, Cybersecurity, Smart Enterprise Platform (including data analytics), Smart MRO and Video Analytics.
In the shift to the new structure, the corporate purpose of using technology and innovation to solve real-world problems and improve lives remains the driving force of the Group. Sustainability is a priority and the Group will continue to integrate ESG initiatives into its businesses and operations.
New Leadership Structure with Broader Bench Strength
As part of the change, ST Engineering has created a new leadership structure to deliver long-term sustainable growth and value creation to its shareholders and stakeholders.
The Group will be led by a Group Executive Committee comprising:
Vincent Chong, Group President & CEO
Cedric Foo, Group Chief Financial Officer
Lim Serh Ghee, Group Chief Operating Officer, Operations Excellence and Chief Commercial Officer
Ravinder Singh, Group Chief Operating Officer, Technology & Innovation and President/Head of Defence & Public Security
The creation of the chief operating officer roles reinforces the Group’s resolve to enhance its global competitiveness by achieving excellence in operations, and strengthening its technology and engineering core that is built on a strong innovation culture.
The Group Executive Committee will be supported by a Group Senior Business Council and a Group Senior Management Team, composing of select business leaders and corporate function heads.
New Financial Reporting Framework
From 2021, the Group’s financial reporting will be based on new operating segments, and will be reflected in its financial results for first half-year ending 30 June 2021. Information on the new segmental reporting framework will be shared in February 2021 when the Group releases its financial results for the year ending 31 December 2020.
As the Group transitions into the new organisation structure, it will maintain focus and priority on its employees, customers and businesses.
This reorganisation is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.
16 Nov 20. Leonardo UK – economic impact summary.
Leonardo is one of the UK’s leading aerospace companies and one of biggest suppliers of defence and security equipment to the UK MoD, making a £2bn contribution to the UK economy around 50% of which are in export.
The company employs more than 7,500 highly-skilled people across 7 major UK sites from its end to end helicopter facilities in Yeovil to its dedicated radar centre of excellence in Edinburgh, its cyber team in Bristol, and its highly specialised technologies in Luton, Lincoln, Basildon and Southampton.
Committed to the UK’s future prosperity, Leonardo has some 500 young people at any one time developing in-demand skills through their placements, apprenticeships and graduate schemes.
Leonardo UK’s operations cover several key areas. This includes an “end-to-end” capability in helicopter manufacturing from the design phase through to production and support. The company also designs, produces and supports advanced electronics systems for use across land, sea, air and space applications. Leonardo’s UK operations also cover the provision of cyber security technology and services.
Core economic impacts
The total contribution to UK GDP of Leonardo’s UK operations was £1.9bn in 2018. This economic activity supported a total of 26,600 jobs. Two thirds of Leonardo’s 2,100 UK suppliers are small and medium-sized enterprises (SMEs), and more than a quarter (28%) of all Leonardo supply chain spending was spent directly with these SMEs. Leonardo UK’s R&D spend was £180M.
Leonardo’s workers are 80% more productive than the average UK worker. Leonardo’s workers contributed £103,000 a year to GDP in 2018 on average, compared to a UK average of £57,000 that year.
Leonardo’s UK operations performed a total of £180m of R&D activity in 2018 alone. Of this, £125m was carried out in support of, and funded by, customer contracts, while a further £52m was funded by Leonardo itself.
This latter figure represents 7% of the company’s direct GDP contribution and as such, provides support to the UK government’s aim of raising total R&D spending to 2.4% of GDP by 2027. The company also carried out a total of £790m of R&D activity over the five preceding years. The accumulation of R&D assets following this activity increased UK GDP by £580m in 2018, due to productivity improvements enabled among diverse sectors across the economy. In 2018, Leonardo’s UK businesses applied for 17 patents arising from new innovations, adding to the 190 patents the company already held.
13 Nov 20. Héroux-Devtek Reports Second Quarter Fiscal 2021 Financial Results.
Q2 Financial Highlights
- Sales of $137.1m, compared to $145.5m last year
- Defence sector sales increased by 11.6%, now representing 66% of consolidated sales
- Operating income of $7.1m, compared to $10.5m last year
- Adjusted EBITDA1 of $21.2m, or 15.5% of sales, compared to $21.5m, or 14.8% last year
- Cash flows related to operating activities increased to $15.4m, compared to $12.5m last year
Q2 Operational Highlights
- Delivery of the first main landing gears to Boeing for the F/A-18 Super Hornet aircraft
- Ramp-up of deliveries for new defence programs, including Boeing F-18, MQ-25 and SAAB Gripen E
- In October, announcement by CESA of contract with Boeing for the manufacture of actuation components
These are non-IFRS measures. Please refer to the “Non-IFRS Measures” section at the end of this press release.
Héroux-Devtek Inc. (TSX: HRX) (“Héroux-Devtek” or the “Corporation”), a leading international manufacturer of aerospace products and the world’s third-largest landing gear manufacturer, today reported its financial results for the second quarter ended September 30, 2020. Unless otherwise indicated, all amounts are in Canadian dollars.
“The strategy we adopted immediately at the onset of the pandemic to align our cost structure to new civil production rates while continuing to seize business development opportunities across both our sectors is yielding the targeted results, and I would like to thank our employees for all of their efforts under these challenging circumstances. I am also encouraged by the manufacturing agreement between CESA and Boeing announced in October, which is indicative of the cross-selling potential of our activities,” said Martin Brassard, President and CEO of Héroux-Devtek.
“I am pleased of the profitability and cash flow levels generated this quarter, which are a demonstration of our team’s disciplined approach to managing costs and maintaining a healthy balance sheet. Today, Héroux-Devtek derives two thirds of its revenues from the defence market, in which we enjoy a diversified profile – catering to every major aircraft category. We will continue to rigourously apply the same strategies moving forward in order to ensure robust performance until the civil market strengthens.” added Mr. Brassard.
SECOND QUARTER RESULTS
Consolidated sales decreased 5.8% to $137.1m, from $145.5m last year. Defence sales were up 11.6%, from $80.6m last year to $90.0m in the second quarter, while civil sales decreased 27.5%, from $64.9m to $47.1m. This decrease was mainly related to lower OEM demand in the large commercial sector, where twin-aisle deliveries decreased 44% due to the ongoing pandemic.
Gross profit as a percentage of sales increased from 15.3% last year to 15.4%, as a better sales mix offset the impact of lower volume without a corresponding decrease in fixed costs such as depreciation, which represented a negative year-over-year impact of 0.5% of sales.
Operating income decreased to $7.1m, or 5.2% of sales, from $10.5m, or 7.2% of sales last year, reflecting restructuring charges totaling $2.7 m this quarter, with none during the same period last year. Adjusted EBITDA, which excludes non-recurring items, stood at $21.2m, or 15.5% of sales, compared with $21.5m, or 14.8% of sales, a year ago.
Earnings per share decreased from $0.18 last year to $0.11 this year due to the factors stated above. Adjusted EPS remained relatively stable at $0.17 compared to $0.18 last year.
The Corporation’s funded backlog was relatively stable at $764m as at September 30, 2020, compared to $772m as at June 30, 2020, as an increase in defence orders offset lower demand for large commercial programs.
Consolidated sales decreased 8.1% to $265.4m, from $288.9m for the corresponding period last year. Defence sales were up 7.5%, from $156.6m last year to $168.4m in the first six months of the year, while civil sales decreased 26.7%, from $132.4m to $97.0m.
Gross profit as a percentage of sales decreased to 15.7% from 16.1% last year, mainly as a result of lower volume without a corresponding decrease in fixed costs such as depreciation, which represented a year-over-year impact of 0.7% of sales. This factor was partly offset by a better sales mix.
Operating income decreased to $8.5m, or 3.2% of sales, from $20.9m, or 7.2% of sales last year, reflecting restructuring charges totaling $8.7m, compared to $0.6m last year. Adjusted EBITDA, which excludes non-recurring items, stood at $39.6m, or 14.9% of sales, compared with $43.0m, or 14.9% of sales last year.
EPS decreased from $0.36 last year to $0.07, reflecting the factors described above, while adjusted EPS decreased to $0.26 from the $0.37 recorded in the same period last year.
As at September 30, 2020, net debt stood at $218.8m, down from $246.9m as at March 31, 2020. In the second quarter, net debt decreased $13.7m, and decreased by $28.1m over the six-month period – mainly as a result of cash flow generation over the three- and six-month periods. The net debt to adjusted EBITDA ratio stood at 2.4x versus 2.6x six months earlier.
As at September 30, 2020, the Corporation had a strong financial position with $228.7m of available liquidity, an increase of $35.9 m compared to March 31, 2020.
The restructuring initiatives announced in May 2020 are progressing as planned, with approximately 70% of expected workforce reductions completed to date. Related restructuring charges of $8.7m have been incurred to date this fiscal year. In October, management made the decision to also close Héroux-Devtek’s Wichita facility as a result of decreasing business volume. The business unit’s repair and overhaul activities will be consolidated in other Héroux-Devtek facilities, while manufacturing activities will be terminated. This decision will affect 37 additional employees, and the net cost of the closure will fit within the initially estimated $12.0m of restructuring charges. (Source: PR Newswire)
13 Nov 20. TT Electronics acquires power and electromagnetic manufacturer. TT Electronics, a global provider of engineered electronics for performance critical applications, has completed the acquisition of Torotel, a US-based designer and manufacturer of high-reliability power and electromagnetic assemblies and components for the aerospace and defence markets.
The acquisition increases TT’s capability in the design and development of power management devices and marks the latest addition to the company’s extensive global magnetics portfolio.
The acquisition of the Torotel business broadens TT’s power electronics capabilities and expands the company’s presence in the US aerospace and defence market building on the recently acquired Covina, California-based business unit from Excelitas Technologies earlier in the year.
Torotel extends TT’s list of blue-chip US aerospace and defence customers and provides access to growth programmes with sole-sourced positions on major platforms. TT continues to be committed to investment that supports the acceleration of its growth prospects and increases the breadth and differentiation of its engineering capability.
Richard Tyson, CEO, TT Electronics said: “We are delighted to complete the acquisition of Torotel. It represents a fantastic fit within our existing US power electronics business, strengthens our position in critical defense applications and further develops our global electromagnetics design and manufacturing capability. We’re delighted to be able to welcome the Torotel team into the TT group.”
Michael Leahan, EVP, TT Electronics Power Solutions said: “Torotel is a great fit for TT supporting our strategy to build leading positions in high-performance, high-reliability markets such as aerospace and defense where the proliferation of electronics is driving increased demand for our custom power management and conversion systems. Torotel represents an exciting addition to TT Electronics and our global electromagnetics capability. We are thrilled to welcome the Torotel employees and customers to TT where we remain committed to providing the best service, products and value available.” (Source: Google/https://www.aero-mag.com/)
16 Nov 20. Kleos Space secures funding for next two satellite clusters. ASX-listed Kleos Space has confirmed the successful capital raising, delivering $19m, which will enable the company to proceed with the development of its next two satellite clusters.
The in-orbit commissioning phase now commences to prepare the satellites to collect data over crucial areas of interest such as the Strait of Hormuz, South China Sea, east/west Africa, Southern Sea of Japan, and the northern Australian coast e.g. the Timor Sea.
Andrew Bowyer, Kleos CEO, said, “We welcome and are delighted to be supported by both existing and new high-quality institutional investors who have recognised the Kleos vision and potential. Strong participation and demand are a clear endorsement of that opportunity following the successful launch of the Kleos Scouting Mission satellites (KSM1) on 7 November.”
After the deployment, the commissioning phase has commenced. The operations team have successfully made contact with all four satellites. It has been confirmed that they have detumbled, battery status is as expected and onboard watchdogs are operational.
“We are now well financed to execute the launch of the second cluster of satellites; Polar Vigilance Mission (KSF1) in mid 2021, and to develop our third cluster of satellites (KSF2) targeted to be in orbit before the end of 2021,” Bowyer added.
Kleos has engaged over 100 worldwide active B2G and B2B opportunities across its pipeline in international jurisdictions including the US, UK, Latin America, Middle East, south Pacific and Australia, representing significant annual revenue following launch and commissioning.
This second mission will be named Polar Vigilance Mission and is a cluster of four satellites, launching into a sun synchronous orbit. The Polar Vigilance Mission will enhance the company’s RF geolocation data delivered by the Kleos Scouting Mission by covering areas north and south of the Scouting Mission 37-degree inclined orbit, in addition to increasing overall coverage time in the equatorial region and increasing revenues.
Kleos Space is a space enabled, activity-based intelligence, data-as-a-service company based in Luxembourg. Kleos Space aims to guard borders, protect assets and save lives by delivering global activity-based intelligence and geolocation as a service.
The first Kleos Space satellite system, known as Kleos Scouting Mission (KSM), will deliver commercially available data and perform as a technology demonstration. KSM will be the keystone for a later global high capacity constellation. (Source: Space Connect)
TCI International, Inc., is a wholly-owned subsidiary of SPX Corporation. TCI provides turn-key solutions for spectrum management and monitoring, direction finding, geolocation and communications intelligence to civilian, government, military and intelligence agencies as well as antennas for communications and high-power radio broadcasting. TCI is headquartered in Fremont, California, USA. For more information, visit www.tcibr.com.