Sponsored by TCI International Inc.
29 Jan 21. Honeywell profit drops 13% as pandemic hits aerospace sales. Honeywell International Inc HON.N on Friday reported a 13% fall in quarterly profit as the coronavirus crisis hurt sales in its main aerospace business, which makes parts for Boeing BA.N and Airbus AIR.PA planes. Still, the company forecast a rise in 2021 sales, likely expecting to benefit from deliveries of Boeing’s 737 MAX jet, which has been cleared to fly after a 20-month ban.
Boeing will mainly ship the 737 MAX jets this year from its stored inventory of about 450 planes, while slowly ramping up production of the jet as air travel picks up with the roll-out of coronavirus vaccines.
Honeywell’s aviation unit is also seeing improved demand for spares for business jets, as wealthy travelers look to avoid commercial flights during the COVID-19 pandemic.
The company forecast 2021 sales between $33.4bn and $34.4bn, up 2% to 5% compared with 2020, though the midpoint came in slightly below analysts’ expectation of $33.95bn.
Net income attributable to Honeywell fell to $1.36bn, or $1.91 per share, in the fourth quarter ended Dec. 31, from $1.56bn, or $2.16 per share, a year earlier. (Source: Reuters)
29 Jan 21. Eaton Signs Agreement to Acquire Tripp Lite, Expanding Eaton’s Power Quality Business in the Americas. Power management company Eaton (NYSE:ETN) today announced it has signed an agreement to acquire Tripp Lite, a leading supplier of power quality products and connectivity solutions including single-phase uninterruptible power supply systems, rack power distribution units, surge protectors, and enclosures for data centers, industrial, medical, and communications markets in the Americas. Founded nearly 100 years ago, the company is headquartered in Chicago, Illinois. Under the terms of the agreement, Eaton will pay $1.65bn for Tripp Lite, which represents approximately 12 times Tripp Lite’s 2020 EBITDA and 11 times estimated 2021 EBITDA.
“The acquisition of Tripp Lite will enhance the breadth of our edge computing and distributed IT product portfolio and expand our single-phase UPS business,” said Uday Yadav, president and chief operating officer, Electrical Sector, Eaton. “We look forward to welcoming Tripp Lite to the Eaton family.”
The acquisition, which is subject to customary closing conditions, is expected to close mid-2021.
Eaton’s mission is to improve the quality of life and the environment through the use of power management technologies and services. We provide sustainable solutions that help our customers effectively manage electrical, hydraulic, and mechanical power – more safely, more efficiently, and more reliably. Eaton’s 2019 revenues were $21.4bn, and we sell products to customers in more than 175 countries. We have approximately 92,000 employees. For more information, visit Eaton.com.
This news release contains forward-looking statements about the expected closing of the acquisition of Tripp Lite and estimated Tripp Lite 2021 EBITDA. These statements should be used with caution and are subject to various risks and uncertainties, some of which are outside of the company’s control. Factors that could cause these statements to become untrue include possible delay or failure of the satisfaction of all closing conditions. We do not assume any obligation to update these forward-looking statements. (Source: BUSINESS WIRE)
29 Jan 21. Avon Rubber said recent trading has remained as flagged in a December warning, which was caused by delays to a military contract. The safety mask maker reported continued good order intake across the portfolio and said it remains confident of achieving its expectations for the current financial year ending September. (Source: FT.com)
28 Jan 21. AgEagle Buys MicaSense from Parrot for $23m. AgEagle Aerial Systems Inc. a drone systems and solutions provider, announced the Company has agreed to acquire MicaSense, Inc. from Parrot, Europe’s leading drone group, in a combined cash and stock transaction valued at $23m.
Based in Seattle, Washington, MicaSense has been at the forefront of advanced drone sensor development since its founding in 2014, having formed integration partnerships with several leading fixed wing and multicopter drone manufacturers, including DraganFly, senseFly, Quantum-Systems and Wingtra, among others. MicaSense’s patented, high precision thermal and multispectral sensors serve the aerial mapping and analytics needs of the agriculture market, and are well positioned to address applications in advanced inspection in the energy and insurance sectors and autonomous flight safety for package delivery, among other solutions. MicaSense’s high performance proprietary products, including Altum, RedEdge-MX, RedEdge-MX Blue and Atlas Flight, have global distribution in 70 countries.
AgEagle’s Chief Executive Officer J. Michael Drozd stated, “Joining forces with MicaSense will empower AgEagle to drive true innovation and advancements of commercial drone systems and solutions for a number of high growth industry segments. With the onboarding of MicaSense’s powerful imaging technologies onto a drone designed for package delivery, we believe it will enable us to produce a turnkey solution that processes in-flight data in real-time. This will allow for drones to effectively assess emergency landing zones, confirm and substantiate successful deliveries and determine proximity warnings, among other important considerations. This is just one example of how, together, we can create highly differentiated drone solutions capable of unleashing the exponential growth potential of unmanned aerial systems in The Drone Age.”
“AgEagle’s board unanimously supports the significant long-term, value-creating opportunity the combination of AgEagle and MicaSense represents,” said Barrett Mooney, Chairman of AgEagle. “Both of our companies have a similar history rooted in pioneering drones and drone-enabled solutions for the precision farming industry; and both of our companies have continued to evolve and expand our respective growth strategies to bring to market powerful new drone systems and solutions for the broader commercial drone industry. The strategic union of our strengths, complementary technological expertise and shared industry experience should position us well to capitalize on and benefit from growing demand for drone-enabled solutions capable of materially improving how businesses operate.”
Justin McAllister, Co-Founder and CTO of MicaSense, added, “MicaSense’s industry-leading solutions, along with the cultural alignment of our two organizations, will allow AgEagle to continue emerging as a dominant player in the commercial drone industry. We are very excited to join the AgEagle family and look forward to bringing the full value of MicaSense to AgEagle’s exciting future growth.” (Source: UAS VISION)
28 Jan 21. Leonardo expects ‘slightly positive’ cash flow after strong fourth-quarter. Italian defence group Leonardo is set to deliver on its promise of improved free operating cash flow when it reports full-year results after a strong end to 2020 thanks to its military and government business.
In a statement on Thursday after an initial review of last year’s data, the company said it expects to deliver full-year orders, revenue, and earnings before interest, tax and amortization (EBITA) in line with its guidance and to achieve a “neutral, slightly positive” free operating cash flow (FOCF).
Leonardo had said in November it was committed to getting payments from large government and military clients to improve its cash flow in the final part of the year, guiding for neutral FOCF at the time.
The FOCF was negative for 2.6bn euros ($3.15bn) through September, partly linked to seasonal issues as well as a build-up in inventories as the coronavirus pandemic delayed deliveries for both civil and military contracts.
“The business continues to respond robustly and manage through the challenges of COVID-19, with cost control measures bearing fruit and industrial efficiency back to normal, helping to offset both JVs and civil performance,” the company said in the statement. Leonardo is due to report full-year results on March 9. (Source: Reuters)
28 Jan 21. SpaceX valuation to hit at least $60bn in new funding round – Business Insider. Elon Musk’s rocket company SpaceX could be valued at a minimum of $60bn as it finalizes a funding round expected to close in February, Business Insider reported on Thursday, citing three people familiar with the matter. The latest round is expected to price each share between $325 and $350, the report said. The report added while details of the deal are still being ironed out, it is possible that SpaceX’s valuation could reach as much as $92bn, up from a $46bn valuation in a funding round in August. SpaceX did not immediately respond to a Reuters request for comment. (Source: Reuters)
28 Jan 21. IFS growth outperforms market in 2020 with 26% increase in software revenue.
- Aerospace and defence licence revenue grew 37% YoY
- 60% increase in Cloud revenue and 43% increase in recurring revenue YoY, despite macroeconomic backdrop
- Recurring revenue share now 80% of software revenue
IFS, the global enterprise applications company, today announced its financial results for the full year ended December 31, 2020.
2020 saw widespread market disruption due to the Covid-19 pandemic. This has heightened the need for companies to build resilience into their business and adopt digital business models.
With this backdrop IFS has stood firm in its commitment to deliver measurable benefits to its customers and has doubled down on ensuring a faster time to value. This has been instrumental in delivering sustained growth in revenue and led to a 105% increase in Service Management revenue.
Some of the key milestones for IFS in 2020 included:
- The acquisition of Clevest that has increased the depth of IFS’s service management proposition
- The launch of IFS Remote Assistance, that won Business Innovation of the Year at the Technology Excellence Awards
- Growth in IFS ecosystem, now with over 8,000 customers and partners having participated in paid-for and free training
- The IFS Community growing to over 5,000 active contributors
- The launch of the IFS Voice of the Customer programme that has helped IFS achieve the highest customer satisfaction scores compared to industry peers (according to Gartner Peer Insights).
Throughout the year, IFS has continued to nurture its customer-first culture, strengthen its partner ecosystem and from a sustainability perspective, support the IFS Foundation, which is building Technology Lab for Welasiya College in Puttalam District of Sri Lanka, a nation that is home to over 1,500 IFS employees.
IFS CEO Darren Roos commented: “I think that every CEO will have been affected one way or another by 2020. Like many, we had to adapt as individuals and as a business, but the passion this team has for our customers continued to shine. I am hugely proud of that.
Roos continued “I am also really proud to see that a significant part our licence revenue has come from new logos, customers who have moved away from their legacy vendor; this combined with our performance in recurring revenue points the performance of a very strong business. 2021 will be a hugely important year for IFS as we launch IFS Cloud on March 10th.”
IFS Chief Financial Officer, Constance Minc, added, “This is the third consecutive year that IFS has delivered double digit revenue growth, and over this period we have grown recurring revenue by 250%. This consistency, together with the improved revenue mix, reveals a strong business that continues to deliver with all the right ingredients to capitalise on our investment cycle. We have real strength in our service proposition, demonstrated by licence revenue growing at 105% percent in 2020, as well as an industry focus in sectors like aerospace and defence that will ensure that we continue to deliver value to our customers.”
Financial and Operational Highlights for FY 2020, growth YoY:
- FY2020 software revenue was MSEK 5,092, an increase of 26 percent versus 2019
- FY2020 recurring revenue was MSEK 4,081, an increase of 43 percent versus 2019
- FY2020 cloud revenue increased 60 percent versus 2019
- FY2020 net revenue was MSEK 7,211, an increase of 14 percent versus 2019
- In addition, service business licence revenue grew 105 percent versus 2019 while aerospace and defence licence revenue grew 37 percent.
- IFS added close to 200 new logos across its core industries, including Carlsberg, Panasonic, LKAB, Savoye, Marshall Aerospace & Defence Group, MRO Logistics, Groupe Beneteau, Lely, De Havilland Aircraft Canada, Mitutoyo, Séché Environnement.
- The partner Ecosystem grew 28 percent versus 2019 and participated in over 30 percent of implementations
- IFS held its leader status in the Gartner Magic Quadrant for Field Service Management, maintaining this position every year since 2014. Also in 2020 IFS was named a Leader in the IDC MarketScape for SaaS and Cloud- Enabled Large Enterprise ERP Applications, a Gartner Peer Insights Customer Choice Cloud ERP for Product-Centric Enterprises, a Gartner Peer Insights Customer Choice for EAM Applications and a Leader in the IDC MarketScape for SaaS and Cloud-Enabled EAM Applications
*Note: all figures based in Swedish Krona and reported in constant currency. Learn more at www.ifs.com/uk/company/financial-results/.
28 Jan 21. HENSOLDT is awarded top innovator seal of approval. Awards given to top 100 German companies. The sensor specialist HENSOLDT is one of the 100 most innovative companies in Germany. This is corroborated by the 2021 TOP-100 seal of approval, awarded by the compamedia competition for innovation management. This year, particularly innovative companies are honoured for the 28th time. The award is based on an analysis of 120 criteria to assess whether innovations at HENSOLDT are the result of strategy and processes or random products. The repeatability of innovative performances is also evaluated on this basis.
When receiving the award, HENSOLDT CEO Thomas Müller stated: “We are proud to be counted among the innovation elite in Germany. Innovation is the result of long-term strategic planning, the pooling of creative energies in the company and the creation of an environment, in which employees can contribute their knowledge and enthusiasm.”
In 2021, compamedia also evaluated the companies’ reaction to COVID-19: “We rapidly adjusted to the new situation and were able to continue market operations without suffering any drop in performance or profits. For example, we carried out product demonstrations for clients using video conferencing and live streaming in 2020. We successfully concluded a critical design review with all participants working from home. We successfully completed an intercontinental repair operation using remote diagnosis, sending the replacement parts and supporting the actual repair using video conferencing”, added Peter Fieser, Chief HR Officer at HENSOLDT.
Furthermore, HENSOLDT has also committed to working for the public good during this time. 3D printers and precision guillotines were used at several sites for the production of face shields for healthcare institutions. These initiatives were driven by HENSOLDT employees.
Prof Dr Nikolaus Franke, the Chief Scientist for TOP-100, is impressed by the companies that have received the award. “The TOP-100 companies have consistently concentrated on being as innovative as possible”, he noted. Ranga Yogeshwar, the science journalist, has now been the mentor for the competition for innovation management for ten years.
The TOP-100 seal of approval has been awarded by compamedia since 1993 for particular innovative strength and outstanding innovative achievements. Prof Dr Nikolaus Franke has been the Chief Scientist since 2002. He is the founder and chairman of the Institute for Entrepreneurship and Innovation at the Vienna University of Economics and Business. Franke is one of the leading international researchers in innovation, having been awarded 25 research prizes and published over 200 papers.
27 Jan 21. Second Front Systems Extends Seed Round Funding to $8.1m to Provide Immediate Impact to National Security, adds investment by Pallas Ventures. As the U.S. national security community competes against near-peer adversaries for advanced technologies and technological superiority, Second Front creates tools to accelerate access, evaluation, and integration of emerging technologies
Second Front Systems (2F), a public benefit software company that equips defense and national security professionals for long-term, continuous competition for access to emerging technologies, announced today an oversubscribed extension of $2.1m to their original $6m seed round led by ARTIS Ventures. In addition to all current investors 8VC, Kleiner Perkins, Gula Tech Adventures, and Abstract Ventures, this extension also includes a new investment from strategic partner Pallas Ventures.
The additional venture funding will be used to further expand the capabilities of Second Front’s core software platform, Atlas Fulcrum, which has received a major contract award from the General Services Administration (GSA) and the Air Force’s innovation arm AFWERX, in addition to supporting the development of additional products and growth activities.
“One of the key areas limiting the U.S. national security community is the speed and scale with which we can identify, test, acquire, and integrate emerging technology,” said Richard Spencer, Pallas Ventures Managing Director, and former Secretary of the Navy. “Second Front’s product-first approach to a highly bureaucratic and laborious process provides the Department of Defense and the U.S. Government with the critical tools needed to increase the speed and impact of investments in modernization and emerging technologies.”
Using software network effects, Second Front works to bridge the gap between commercial technologies and warfighters, breaking down silos, connecting dispersed buying centers, and helping to accelerate technology discovery, assessment, and integration.
“There’s a clear and present need for the U.S. to protect and promote emerging and critical technologies–like autonomy, cyber, biotech, and AI–in order to maintain a competitive advantage against near-peer competitors,” said 2F Founder and CEO Peter Dixon. “At Second Front, we believe that defense acquisition professionals are at the center of the warfighting mission and are honored to leverage this opportunity to provide them tools that further their impact.”
About Second Front Systems
Second Front Systems (2F) is a public benefit, venture-backed software company that equips defense and national security professionals for long-term, continuous competition for access to emerging technologies. Founded by two former Marines with firsthand experience of the dangers outdated technology poses in combat, 2F is fast-tracking government access to disruptive, commercially proven technology for national security missions. For more information, visit https://secondfront.com/
About Pallas Ventures
Pallas Ventures partners with innovative companies developing break-through technology with compelling national security applications. Pallas’ investment arm enhances our advisory services and helps resource our clients.
With each investment, we provide immediate value – leveraging decades of experience garnered from both defense and corporate enterprises to provide strategic insight to our portfolio partners. Pallas Ventures will make equity investments in companies having promising technologies through cash purchase or in kind for services rendered.
Our network brings to bear invaluable experience at the highest levels of government and the U.S. military, offering the entrepreneurs we partner with a wealth of resources at a critical stage in the life of their companies. https://www.pallasadvisors.com/ventures (Source: PR Newswire)
27 Jan 21. Lockheed Overtakes Boeing as Largest US Aerospace and Defense Firm. Boeing, which saw no defense revenue growth last year, takes another financial hit from the tanker program. Boeing ceded its long-held top spot as America’s largest aerospace and defense firms to Lockheed Martin after reporting financial results from an abysmal 2020 on Wednesday. The Chicago-based company also said it would lose another $275m building Air Force KC-46 tankers because of “program primarily due to production inefficiencies including impacts of COVID-19 disruption.” The company has lost more than $4 bn on the project.
The company closed 2020 — a year that saw the collapse of passenger air travel from the coronavirus pandemic and the return to flight of the 737 Max airliner — with just under $58.2bn in revenue, down 24 percent from the previous year.
While Lockheed — which on Tuesday reported $65.4bn in 2020 sales — has long been the world’s largest defense contractor, revenue from Boeing’s commercial airplane business has combined with its military work to keep it atop the defense-and-aerospace category for decades.
Boeing’s defense and space sales were flat year-over-year at just shy of $26.3bn. Its services business, which includes defense work, made $15.5bn, down 16 percent as thousands of aircraft remain grounded due to the pandemic.
“Overall, the government services and defense and space businesses remain significant and relatively stable and we continue to see solid global demand for our major programs,” CEO David Calhoun said on the company’s quarterly earnings call Wednesday. “Nevertheless, the scale of government spending on COVID-19 response has the potential to add pressure to global defense spending in the years ahead.”
U.S. defense spending is expected to flatten or decline in coming years as the Biden administration and a Democrat-controlled Congress focus more on domestic issues.
Calhoun said the company expects its defense business to grow in the “lower end of the single digits” in coming years.
“It’s hard to commit to a big uptick in any way on growth rates anytime soon, in light of what I think are the pressures,” he said.
Calhoun, who became CEO of the firm one year ago this month, said the coronavirus would continue to delay international defense contracts.
“The order activity in those international markets has pushed to the right, somewhat of an almost entirely because of COVID-related stuff, not because of any competitive issue one way or the other,” he said.
Like many of his colleagues in recent years, Calhoun touted Boeing’s classified military work as being “incredibly encouraging and incredibly important to us.”
Despite the continued problems with the KC-46, the Air Force has purchased 94 of a planned 179 aircraft. Just this month, it placed two orders totaling $3.8bn for 27 aircraft.
The FAA last month cleared the 737 Max for passenger flights in the United States. Some airlines have already resumed flights across North and South America. European regulators on Wednesday said the plane can resume flights across the continent.
Boeing also disclosed Wednesday that it would not deliver its first 777X, a larger, more efficient version of the popular 777 jetliner, until late 2023. (Source: Defense One)
27 Jan 21. Boeing’s cost overruns on KC-46 now exceed initial contract with US Air Force. With the Jan. 27 announcement of a new $275m charge on the KC-46, Boeing has now paid as much in cost overruns for the troubled program as the U.S. Air Force invested in the tanker’s development.
The new charge, which the company reported as part of fourth-quarter 2020 earnings, means Boeing has now paid more than $5.0bn out of pocket to pay for the myriad technical problems and production issues that have cropped up since the company won the program in 2011. Under the firm, fixed-price contract signed then, Boeing is responsible for paying for any costs in excess of the contract’s $4.9bn ceiling.
The latest KC-46 overrun occurred “primarily due to production inefficiencies including impacts of COVID-19 disruption,” the company said.
Steve Trimble of Aviation Week put together a list of KC-46 charges by year, finding that the program documented its largest overrun in 2020 despite seeing charges decrease to only $148m in 2019.
The company previously attributed $494m in charges to the ongoing pandemic during the first, second and third quarters of 2020.
The KC-46 is a commercial-derivative plane based on the Boeing 767 airliner. Because it is manufactured on the 767 production line in Everett, Washington, before undergoing military-specific upgrades, any slowdown in commercial plane volume also makes it more expensive to produce the KC-46. (Source: Defense News)
27 Jan 21. General Dynamics profit misses, but 2021 outlook boosts shares. Defense contractor General Dynamics Corp missed Wall Street estimates for quarterly profit and revenue on Wednesday, as its aerospace unit delivered fewer Gulfstream jets due to the COVID-19 pandemic, but 2021 revenue guidance sent shares up nearly 4% in early trading. During a post earnings conference call Phebe Novakovic, the General Dynamics CEO, said she expected 2021 revenue to be up $1bn to $39bn and forecast earnings share in the range of $11.00 to $11.05 per fully diluted share.
The 2021 outlook counteracted investor disappointment that quarterly Gulfstream jet deliveries declined to 40 units from 44 a year ago, which sent shares down slightly in early trading.
Business jet deliveries in 2020 were hampered by coronavirus shutdowns, making it harder for defense contractors like General Dynamics to deliver jets due to COVID-related travel restrictions and factory slow-downs.
Sales in the company’s aerospace unit posted a 16.9% fall to $2.44bn. Total revenue fell 2.7% to $10.48bn.
However, the broader business jet market saw an order boost late in 2020 as U.S. buyers rushed to take advantage of favorable tax rules they feared could change under the new Biden administration.
During the quarter, General Dynamics’ marine systems unit, which makes ships and submarines for the U.S. Navy, was awarded a $9.47bn contract for the construction of Columbia class submarines, moving the U.S. Navy’s top procurement priority out of the early-construction phase.
The shift to the construction phase for the first two Columbia class submarines added to General Dynamics’ backlog which sat at record-high $89.5bn at the end of the year.
Net earnings fell to $1bn, or $3.49 per share, in the fourth quarter ended Dec. 31, from $1.02bn, or $3.51 per share, a year earlier.
Analysts on average expected earnings of $3.54 per share on a revenue of $10.78bn, according to Refinitiv data. (Source: Reuters)
26 Jan 21. Lockheed Martin reports rare profit miss as pandemic hits F-35 deliveries. Lockheed Martin Corp on Tuesday missed profit estimates for the first time in the last eight quarters as the COVID-19 pandemic disrupted deliveries of the U.S. weapons maker’s F-35 jets and caused supplier delays.Shares of the company were down about 2.3% after it said fourth-quarter deliveries of its F-35 jets fell to 42 from 51 a year earlier.
Progressive Democrats in Congress have called for cuts in military spending amid the global health crisis, although analysts have said sudden changes are unlikely in an industry that has supported countless jobs during the recession.
Analysts, however, were optimistic about Lockheed’s prospects, citing the company’s strong balance sheet and demand for its offerings.
Lockheed’s move to raise its full-year cash from operations outlook to at least $8.30 bn from a prior $8.1 bn, along with a robust backlog, shows the defense sector remains a very resilient business, an analyst from Vertical Research Partners said.
Bethesda, Maryland-based Lockheed signed deals with United Arab Emirates, Japan and Taiwan in the last quarter, while Israel said earlier this month it was looking to expand its squadron of stealth F-35 warplanes.
“The Missiles business remained solid, aided by global defense spending,” Jeff Windau, an analyst at Edward Jones, said in an email. Lockheed’s missiles and fire control unit, which makes missile defenses like the Terminal High Altitude Area Defense (THAAD) saw fourth-quarter sales increase $97m, or 4% over the same period a year earlier despite headwinds from the ongoing pandemic.
Lockheed now expects 2021 revenue between $67.10 bn to $68.50bn, in line with analysts’ expectation of revenue of about $68.04bn, according to IBES data from Refinitiv.
Full-year earnings for 2021 are expected to be in the range of $26.00 to $26.30 per share.
Net earnings rose to $1.79bn, or $6.38 per share, in the fourth quarter ended Dec. 31, from $1.5bn, or $5.29 per share, a year earlier.
Analysts on average had expected net earnings of $6.41 per share.
Net sales rose 7.3% to $17.03bn, above estimates of $16.92bn. (Source: Reuters)
26 Jan 21. Raytheon posts better-than-expected profit and sales, shares jump. U.S. aerospace manufacturer Raytheon Technologies Corp reported better than expected quarterly profit and sales Tuesday but forecast lower than expected 2021 revenue amid a slow global economic environment triggered by disruptions from the COVID-19 pandemic.
Shares of the company rose as much as 6% in early trading after the company said its free cash flow could almost double to $4.5bn in 2021.
However, the company provided a full-year revenue outlook of about $63.4bn to $65.4bn which was below analysts’ estimate for revenue of about $67.28bn.
Still, the Waltham, Massachusetts-based company said it now expects 2021 full-year earnings per share to be in the range of $3.40 per share to $3.70 per share, beating analysts’ average expectation of $3.47 per share, according to IBES data from Refinitiv.
Raytheon also beat its 2020 cash flow guidance of about $2bn by posting $2.3bn, thanks to stability in its defense unit that contributes to more than half of the company’s overall sales.
Although progressive Democrats in Congress have called for cuts in military spending amid the pandemic, analysts have said sudden changes are unlikely in an industry that supports countless jobs during the recession.
The newly installed U.S. Secretary of Defense, Lloyd Austin, resigned from Raytheon’s board of directors on Friday following his confirmation by the U.S. Senate. Austin has told Congress he will recuse himself of Raytheon-related matters at the Pentagon.
On an adjusted basis, Raytheon earned $0.74 per share in the quarter, beating analysts’ estimate of $0.70 per share.
Net sales in the quarter were $16.4bn, just below analysts’ expectation of $16.92bn.
The company, which had about 195,000 employees when it merged with United Technologies last April, has laid off nearly 20,000 full-time and contract employees in its commercial aerospace business, which makes aircraft engines and spare parts.
Raytheon’s backlog at the end of the fourth quarter was $150.1 bn and comprised of $82.8 bn from commercial aerospace and $67.3 bn from defense.
The company expects a 2021 tax rate about 19% versus 17.5% in 2020, management said on a post-earnings conference call with investors.
26 Jan 21. MBH Corporation plc (MBH), a diversified investment holding company, is launching a new engineering vertical with the acquisition of 3Ks Engineering (“3Ks”), one of the largest companies in the UK to offer the dual role of large fabrication alongside heavy machining. This is MBH’s first acquisition of 2021 following a highly active 2020 which saw the group make 12 acquisitions to grow to 22 companies in its portfolio. 3Ks Engineering will be the 23rd company joining MBH.
MBH today establishes a new vertical with the 100% acquisition of 3Ks Engineering (“3Ks”), a one stop shop for large fabrication & heavy machining service and is one of the largest companies in this industry operating in the UK.
3Ks is the latest example of MBH’s agglomeration strategy of acquiring stable and set businesses with solid leadership. 3Ks has been a family business for over 50 years. Established in 1969 in South Wales by Ronald Hanbury, it has been run for the past 20 years or so by sons Kevin and Karl Hanbury who will remain in the business post acquisition. The company has an extraordinarily loyal staff base with the average tenure of an employee (excluding the Hanbury brothers) being 11 years.
3Ks was established to largely serve the oil & gas sector. The majority of their customer base remains in that sector, although they serve a range of industries with clients across the UK providing solutions to Subsea, Offshore, Onshore, Rail Sector and Back Deck requirements. For the year ending 31 January 2020 3Ks generated revenue of GBP4.0M. This acquisition is an EPS accretive acquisition. The estimated total consideration for the acquisition is approximately GBP3.3M. The consideration will be paid partly in unlisted bonds in MBH Corporation plc and would convert to listed bonds upon completion of audited accounts. The terms of the listed and unlisted bonds are as follows:
- 5 year terms and principal payable on maturity
- 5% interest per annum payable semi-annually
Convertible notes will be used to settle the remaining purchase consideration. At the date of conversion, the convertible note will convert into MBH shares at the lower of the 30 day volume weighted price preceding the conversion date (i.e. 12 months post completion date) or EUR0.80c per share.
Callum Laing, CEO MBH Corporation plc, commented: “This is a fascinating new vertical for our Group and 3Ks represents the best of the engineering sector with talented leadership who inspire huge loyalty from their people. They deliver consistent quality in a highly complex field and we’re delighted to welcome them and their team to the MBH Group.”
Kevin Hanbury, Managing Director of 3Ks Engineering, said: “3Ks was founded 51 years ago and in that time we’ve grown it into a business and team that we are hugely proud of. This latest step is an exciting one for us and our people as we look to accelerate growth and continue to innovate through our products and services for the future.”
26 Jan 21. Airbus Helicopters resilient in 2020. Steadfast priorities: supporting customers and setting the stage for the future. In 2020, Airbus Helicopters logged 289 gross orders (net: 268) in a challenging market heavily impacted by the economic consequences of the COVID-19 pandemic, reinforcing the company’s position on the civil and parapublic market. Additionally, the company delivered 300 rotorcraft worldwide despite the pandemic travel restrictions, resulting in a stable 48% share of the civil and parapublic market and thus allowing Airbus Helicopters to maintain its market-leading position thanks to its wide range of competitive products designed to enable customers to perform a multitude of missions.
“I am proud of our teams all over the world who adapted their ways of working to be there for our customers when they needed us the most, striving to help them to maintain their essential missions across the globe by delivering helicopters and the associated support and services they required. I would like to thank our customers for their continued trust in Airbus Helicopters,” said Bruno Even, Airbus Helicopters CEO. “We certified the five-bladed H145 and the H160 and laid solid foundations for our pursuit of zero-emission technologies with our CityAirbus demonstrator,” he added.
Key deliveries in 2020 included the first five-bladed H145 to launch customer Norsk Luftambulanse, a helicopter emergency medical services operator, at the end of September, followed by deliveries to DRF Luftrettung at the end of the year. On the heavy side, the first H225Ms were handed over to the Kuwait Air Force as well as the first NH90s for the Spanish Air Force. September also saw the 463rd delivery, on time, on cost, and on quality, of an UH-72A Lakota from the Airbus Helicopters factory in Columbus, Mississippi.
Order highlights for 2020 consist of 84 helicopters for the best-selling H145, including 17 UH-72B for the US Army, the first Fenestron and Helionix-equipped versions to be ordered. The H135 achieved solid sales with 33 units and also received the EASA certification of an alternate gross weight as well as a new single pilot IFR cockpit layout at the end of 2020. Milestone Aviation and Heli-Union both became new customers for the multi-mission H160, ordered to address a wide range of missions including offshore transportation.
The NH90 had a successful 2020 with the Bundeswehr placing an order for 31 naval helicopters to replace the ageing Sea Lynx fleet due to be retired. The French Armament General Directorate (DGA) confirmed the development of a new Standard 2 version to equip the French Special Forces and the first NH90 for Qatar performed its maiden flight at the end of the year.
On the customer support and service side, once again there was a strong showing for HCare support contracts, with new customers joining the ranks such as the National Aeronautics and Space Administration (NASA) and Air Methods Corporation. Facing the global pandemic, the company mobilised to keep its military and civil customers flying thanks to elevated levels of technical and logistics support, new distance learning solutions, and direct assistance from Airbus Helicopters in making protective equipment available to pilots and crews. A new AirbusWorld collaborative customer platform was launched based on feedback from customers, offering a streamlined user experience and new functionalities aimed at fostering open dialogue among operators and with the company.
Airbus Helicopters’ resilient business model allows the company to continue investing and preparing the future. In 2020, innovation milestones included the first fully automatic flight of CityAirbus, a demonstrator that will play an important role in developing zero-emission flight and in preparing the future urban air mobility market. The VSR700, the company’s rotary-wing unmanned aerial system, performed its first free flight in July and autonomous deck-landing trials at the end of the year.
25 Jan 21. RHH Franks celebrates 60 years of engineering excellence with fresh look and new strategy for the future. Defence manufacturer RHH Franks is celebrating its 60th trading year, and has relaunched with a new brand and long-term strategy of continual improvement.
In line with its commitment to the highest levels of quality, on-time-delivery and manufacturing technology, managing director Elsa Hogan has introduced plans to revolutionise the Hampshire-based business that requires a brand that will reflect its values and objectives in the 21st century.
She said: “As we enter our 60th year, it was important to build on our long-standing history of success and sustainable growth by revolutionising our strategy with reignited ambition.
“This rebrand marks a significant turning point for the business, which is now focussed on reinvesting in our people, software, machinery and facilities, along with improving efficiency to meet the increasing demands of the supply chains we serve.
“RHH Franks strives to be at the forefront of manufacturing innovation, constantly improving our processes and capabilities with the aim of passing the benefits onto our customers.
“It was therefore fitting to take the opportunity this year to announce our revised strategy and unveil a new look that our employees can be proud to work for and our clients can be proud to work with.”
The schedule of improvement at RHH Franks began two years ago and has already involved an extensive factory expansion, significant investment in new machinery, state-of-the-art CAD software and an Enterprise Resource Planning system.
Founded in 1961 by Ronald Henry Herman Franks and Basil James, RHH Franks was first tasked with manufacturing parts for the BAC111 short haul jet airlines being constructed at Bournemouth Airport.
Since then, the firm has grown from a modest sheet metal workshop to a sizeable end-to-end subcontract manufacturer providing a complete range of services from CNC milling and turning to fabrication and Nadcap-accredited welding, chemical processing, heat treatment and dip and torch brazing.
Over the decades, it has delivered parts, components and assemblies for some of the world’s most advanced aircraft of the time, including the Twin Store Carrier for the Tornado GR4, Augusta Westland 159, Hawk, Eurofighter Typhoon and Apache AH64.
Clients include Leonardo Helicopters, Eton Aerospace, Cobham, SEA Ltd and QinetiQ.
Honeywell is one of its longest standing clients, having worked with RHH Franks since 1967.
Michal Pis, commodity manager for Honeywell Aerospace, said: “Our relationship with RHH Franks dates back to when we were trading as Normalair Garrett more than 50 years ago.
“During this time, RHH Franks has worked closely with us to manufacture components for some of the most impressive new, existing and legacy aircraft, supplying tens of thousands of parts.
“The fact they remain a manufacturing partner today is testament to their ongoing commitment to quality, high service levels and on-time-delivery.
“Their engineering excellence aligns perfectly with our unmatched heritage of innovative aerospace design.”
Today, RHH Franks operates from its recently expanded 30,000 sq ft premises on the Gore Road Industrial Estate, New Milton, and its team of over 40 skilled engineers manufacture more than 13,000 components each year for a variety of sectors.
It also serves the aerospace, nuclear and marine industries.
As a family-run business, it is proud of the loyal and dedicated team that supports it, many of whom have been employed at RHH Franks for most of their working life.
Elsa Hogan, managing director, added: “We are thrilled to be celebrating 60 years in business.
“Not only is this a great achievement on its own, but to be marking it with some of our very first clients and employees who have descended from former employees is quite something.
“Looking forward, we will be following up on the rebrand by continuing to improve our internal processes to increase efficiency, focus on quality and helping more of our customers understand how they can improve their supply chain with our end-to-end support.”
The business has also enrolled in the Fit for Nuclear programme and is working towards achieving SC21 silver supply chain certification after achieving a bronze award in September 2019 and again in November 2020.
Part of RHH Franks’ vision for the future is to inspire the next generation of engineers too. In 2018 its launched its apprenticeship scheme and regularly welcomes local students for work experience, aware that combining decades of experience in an environment where fresh perspectives are welcomed will encourage as many people as possible into the exciting and rewarding world of engineering.
25 Jan 21. Kape Technologies posts earnings beat.
- Cash profits 7 per cent ahead of consensus
- Integration of PIA ahead of schedule
- Infrastructure upgrade to significantly reduce costs
Kape Technologies (KAPE:198p), a provider of cyber security software, has released a bullish pre-close update ahead of annual results on Wednesday, 17 March 2020.
It’s hardly surprising given that home working and remote working restrictions due to the Covid-19 pandemic has led to increased adoption of Kape’s cyber security software (which protects data security and privacy against piracy and phishing attacks). Demand for virtual private network (VPN) solutions that encrypt and secure internet connections has been rising notably in both North America and Europe, regions that account for almost three-quarters of Kape’s annual revenue. Kape is also benefiting from the transformational acquisition of Colorado-based Private Internet Access (PIA) at the end of 2019.
These strong drivers have delivered full-year cash profit of $39m, well ahead of previous guidance ($35m-$38m), on 85 per cent higher revenue of $122m. Margins shot up from 22 to 32 per cent, helped in part by a 31 per cent reduction in PIA’s operating expenses. On this basis, analysts at Progressive Equity Research forecast a trebling of full-year pre-tax profit to $34.4m, EPS of 15.8¢ (11.6p), up from 6.4¢ in 2019, and closing net cash of $25.7m.
Furthermore, higher marketing activity in the final quarter of 2020 has laid the platform for accelerated organic growth in 2021. In addition, Kape has completed a cutting-edge infrastructure upgrade that has significantly cut costs as well as enhancing the customer experience for its 2.5m paying subscribers, a tenfold increase since I first advised buying the shares, at 47.9p, in my 2017 Bargain Shares portfolio.
Analysts forecast a further increase in cash profits to $41.5m in the current year, but I expect this to be easily beaten. However, even on this basis, the shares are not highly priced on an enterprise value to cash profit multiple of 13 times, one reason why they have made decent headway since I last suggested buying at 170p (‘Four tech companies with high growth potential’, 18 November 2020). I expect the positive share price momentum to be maintained. A chart breakout above last summer’s highs around 225p would signal that a share price move towards my 275p target price is under way. Buy. (Source: Investors Chronicle)
22 Jan 21. Cybersecurity Services Company Gigit Finalizes Second Merger. Company strengthens its foothold in emerging CMMC federal compliance security standards with stock, IP, and assets merger deal with Peak InfoSec. Gigit, Inc. (https://gigitsecurity.com), a cybersecurity firm that ensures cybersecurity compliance and reduces cybersecurity risk through its testing, assessment, and consulting services, today announces the formal merger of Peak InfoSec (https://peakinfosec.com), an Information Security consulting firm and turnaround specialists, into its company. Peak InfoSec will act as a wholly-owned subsidiary of Gigit, providing Cybersecurity Maturity Model Certification (CMMC) Third-Party Assessor Organization (C3PAO) conformity assessments to Gigit’s clients that are part of the Defense Industrial Base. This is the second merger Gigit will have completed, having previously acquired Cyber51, a greatly-regarded cybersecurity company with a focus on network & web application vulnerability assessments, penetration testing (“pentesting”), and cybersecurity training. With this latest merger, Peak InfoSec founder and highly-certified cybersecurity expert, Matthew Titcombe, steps into the role of Chief Security Information Officer (CISO) at Gigit. Gigit, which among its specializations itself offers cybersecurity due diligence services in the mergers and acquisitions space, furthers its ability to serve mid-market (Interim Healthcare) and large (Uber) clients heavily involved in M&A as well as federal government contracting work.
“From a strategic point of view, this acquisition strongly positions Gigit to serve the Department of Defense space,” said Gigit CEO David Jacobs. “Matt Titcombe is on the cutting edge of the CMMC DoD requirements, which will soon expand throughout the federal government sector, so we are thrilled to have Matt join us as our CISO. The combination of Peak InfoSec’s assets and Matt’s talent and intellectual property give us long term stability within the FED community.”
“Merging with Gigit is a natural fit. With the tidal wave of CMMC work coming our way, the Gigit/Peak InfoSec merger will bring more resources to Defense contractors and ready them for Conformity Assessments,” said Titcombe. “My transition to Gigit CISO now allows me to focus exclusively on Information Security consulting and formal cybersecurity assessment services.” (Source: PR Newswire)
17 Jan 21. Marlink Group To Acquire ITC Global. Marlink Group, backed by Apax Partners (France), has signed a definitive agreement to acquire 100% of ITC Global, a leading provider of satellite communications solutions, from Panasonic. Upon completion of the acquisition, ITC Global will become a cornerstone of the Marlink Group, supporting the expansion of Marlink’s global leadership in the energy and enterprise markets.
ITC Global brings expertise in managed, high-value, high-performance satellite network solutions to the fast-growing Marlink Group. The company’s strong reputation in the Energy, Enterprise and Maritime Passenger markets will enable the Group to further expand its leadership position in these highly demanding market segments. In addition, the Marlink Group will leverage ITC Global to diversify and strengthen its commercial operations in the US, UK and Australia.
Most importantly, Marlink’s respective customers will benefit greatly from the combined Group’s enhanced capabilities and strength as a sustainable leading provider for their business-critical remote connectivity solutions. The acquisition will provide the Marlink Group with synergistic platforms to offer best-in-class managed SATCOMs’ services and further develop its Smart Network Solutions for its customers.
The closing of the transaction is subject to customary regulatory approvals and is expected in the first quarter of 2021. (Source: Satnews)
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.