Sponsored by TCI International Inc.
22 Jul 21. Shield AI Acquires Heron Systems. The Acquisition Enhances Shield AI’s Industry Leading Reinforcement Learning And AI Engineering Capabilities. Shield AI, a fast-growing technology company that is applying self-driving car technologies to military aircraft, today announced that it has acquired Heron Systems Inc., a software company known for decisively defeating an experienced Air Force F-16 pilot 5-0, and five other AI-pilots, during the DARPA AlphaDogfight trials.
Together, Shield AI and Heron will accelerate the deployment of advanced AI-pilots to legacy and future military aircraft – an urgent and necessary step toward achieving national security priorities and remaining credible in the face of sophisticated peer countries. This acquisition is being executed as China recently announced the successful development of an AI-pilot for their fighter aircraft that can defeat China’s best pilots.
“Truly special AI companies are incredibly rare assets in the defense market. Heron has developed the most advanced AI-pilot for fighter aircraft in the United States. With China already showing comparable results, operationalizing Heron’s work for programs such as Next Generation Air Dominance must be a national security priority,” said Shield AI cofounder and CEO Ryan Tseng.
“Shield AI enables us the opportunity and scale to accelerate the integration of our AI-pilot on a next generation fighter and UAS. What stood out about Shield AI for us – is that they’re really the only ones who have an operational AI pilot that can operate on the edge without GPS or comms, and this has been proven on combat operations,” said Brett Darcey, Heron Systems GM.
“Whoever has the best AI-pilots will have a decisive and overwhelming advantage on the battlefield – inferior AI-pilots will be quickly destroyed, militaries without AI-pilots won’t stand a chance. The combined Shield AI and Heron team is excited and humbled to contribute to the warfighter, national security, and global stability by operationalizing AI-pilots onboard 6th generation fighters and Group 5 UAS,” said Brandon Tseng Shield AI cofounder and former Navy SEAL.
Heron’s proprietary, multi-agent deep reinforcement learning framework has enabled its AI software to achieve dominant performance across a broad range of scenarios, including in the aforementioned DARPA AlphaDogfight trials.
Heron Systems will operate as a wholly owned division under Shield AI.
About Shield AI
Shield AI is redefining what is possible for defense and commercial unmanned systems, building self-driving technology that enables intelligent teams of systems to execute complex operations without GPS, communications, or remote pilots. Put simply – we’re building the world’s best AIpilots.
We are a mission driven company founded to protect service members and civilians with artificially intelligent systems.
Shield AI is a venture-backed company built around a team of proven executives, warfighters with relevant national security experience, and world-class AI engineers. The company is headquartered in San Diego, CA with satellite offices across the United States. Shield AI’s products and people are currently in the field actively supporting operations with the US Department of Defense and allies. For more information, visit www.shield.ai.
Follow Shield AI on Twitter and LinkedIn
About Heron Systems
Heron Systems’ mission is to innovate and apply cutting-edge AI to build technological supremacy that solves modern war-fighting problems. From advanced R&D and prototypes to full stack solutions, our AI-powered solutions deliver industry leading performance designed to work with existing systems.
Our technical approach is guided by a firm commitment to quality engineering, open architecture, and flexible, extensible systems.
Founded in 1993, Heron Systems has offices in California, MD and Alexandria, VA. (Source: PR Newswire)
23 Jul 21. Cobham launches £2.6bn bid for rival Ultra Electronics. The FT reported today that Cobham, the private-equity backed UK aerospace and defence group, has launched a £2.6bn takeover bid for listed peer Ultra Electronics. Ultra said that Cobham, which was bought last year by US buyout fund Advent International, had pitched its offer at £35 per share in cash with shareholders also entitled to the interim dividend of 16.2p apiece. The price represents a 42 per cent premium to Ultra’s closing value on Thursday and a 63.1 per cent premium to the undisturbed price. “Having considered the proposal, the board has indicated to Cobham that it is at a value the board would be minded to recommend to Ultra shareholders, subject to consideration and satisfactory resolution of other terms and arrangements, including the establishment of safeguards for the interests of Ultra’s stakeholder groups,” Ultra said. “In relation to this, Cobham has indicated to the board that it is minded to offer the UK government appropriate undertakings in respect of national security.” Cobham had said last month it was considering a bid for Ultra to create a “global defence electronics champion”. Ultra had fired back with a strongly-worded statement saying it had received no proposal from its suitor.(Source:
23 Jul 21. Thales reports its 2021 half-year results.
- Order intake: €8.2bn, up 35% (+37% on an organic basis1)
- Sales: €8.4 bn, up 8.7% (+9.8% on an organic basis)
- EBIT2: €768m, up 121% (+119% on an organic basis)
- Adjusted net income, Group share2: €591m, up 155%
- Consolidated net income, Group share: €433m, up 565%
- Free operating cash flow2: €420m
- 2021 sales target upgraded: sales now expected between €17.5bn and €18.0bn3
Thales’s Board of Directors (Euronext Paris: HO) met on 22 July 2021 to review the financial statements for the first half of 20214.
“Thales’s H1 2021 results recorded a sharp rebound, once again demonstrating the resilience of our business model and the relevance of the strategic choices – both technological and industrial – implemented.
Commercial momentum was especially strong in space, defense and cybersecurity.
On a pro forma basis, EBIT was already close to its 2019 level. The robust improvement in Transport and Digital Identity and Security (DIS – formerly Gemalto) almost entirely offset the steep decline in Aerospace, which remained affected by the consequences of the health crisis on the civil aeronautics market.
Free operating cash flow was well ahead of plan.
These results illustrate the commitment and professionalism of Thales teams, whom I want to thank warmly.
Given the robustness of growth over the first months of 2021, we are raising our sales target for the year. We now expect sales of between €17.5bn and €18bn.
The world of tomorrow requires digital solutions contributing to a safer, more sustainable, and more inclusive world, which widens the scope of growth opportunities for Thales. All Group teams are mobilized to support our customers in this transformation.” Patrice Caine, Chairman & Chief Executive Officer
H1 2021 key figures
Order intake in the first half of 2021 totalled €8,244m, up 35% from H1 2020 (+37% on an organic basis, i.e., at constant scope and exchange rates). The Group continued to benefit from strong commercial momentum during the second quarter, especially in Defense & Security and Space. At 30 June 2021, the consolidated order book stood at €34.6bn, a new all-time record.
Sales totalled €8,423m, up 8.7% from H1 2020, and up 9.8% at constant scope and exchange rates. The increase in sales reflects the sharp rebound in most of the businesses that were affected by the health crisis in 2020, with the exception of civil aeronautics and biometrics.
In the first half of 2021, the Group posted EBIT of €768m (9.1% of sales), compared to €348 m (4.5% of sales) in H1 2020, a rise of 121% (119% on an organic basis).
At €591m, the adjusted net income, Group share was up by 155%.
Consolidated net income, Group share came to €433m, up sharply compared to H1 2020, boosted by the strong increase in adjusted net income.
Free operating cash flow7 was €420m, versus -€471 m in H1 2020, on the back of the recovery in profitability, the internal measures implemented, and a reduced seasonality of WCR. Net debt stood at €2,496m at 30 June 2021, a decrease of €1,432m year-on-year.
H1 2021 order intake
H1 2021 order intake amounted to €8,244m, up 35% compared to H1 2020 (+37% at constant scope and exchange rates). The book-to-bill ratio was 0.98 versus 0.78 in H1 2020. Over 12 months, it worked out at a high 1.17.
In H1 2021, Thales booked 7 large orders with a unit value of over €100m, for a total amount of €1,705m (€560m in H1 2020):
- 4 large orders booked in Q1 2021:
o two contracts related to the supply of Rafale aircraft to Greece and France
o the new generation of the Franco-Italian SAMP/T NG ground-based air defense system
o SATRIA, a telecommunications satellite aimed at reducing the digital divide in Indonesia
- 3 large orders booked in Q2 2021:
o the second generation of Europe’s Galileo navigation satellites
o two secure telecommunications satellites for Italy (SICRAL 3)
o the modernisation and support of three tactical control radars in Canada
At €6,539m, orders with a unit value of less than €100m were up 18% compared to the first half of 2020. This increase reflects a 55% rise in orders with a unit value of between €10 m and €100m, buoyed by strong commercial momentum in the Space and Defense businesses in mature countries.
Geographically9, order intake in emerging markets amounted to €1,508 m, up 3% at constant scope and exchange rates. At €6,736 m, order intake in mature markets rebounded strongly (+49% at constant scope and exchange rates), driven primarily by four large military contracts and two large space contracts.
Order intake in the Aerospace segment totalled €2,886m, versus €1,625m in H1 2020 (+80% at constant scope and exchange rates). This performance reflected mainly Thales Alenia Space’s new commercial successes during the first half of the year (including the three large orders with a unit value of over €100m mentioned above), as well as the gradual recovery of demand in the civil aeronautics market. At 30 June 2021, the segment’s order book stood at €7.4bn, up 13% from 31 December 2020.
At €579m, order intake in the Transport segment was up 32% from H1 2020 at constant scope and exchange rates. This growth attests to the strong momentum of the mainline rail business.
Order intake in the Defense & Security segment totalled €3,374m compared to €2,425m in H1 2020, up 39% at constant scope and exchange rates, including the four large orders with a unit value of over €100 m mentioned above. The segment’s order book totalled €22.7bn, or 2.8 years of sales, further strengthening visibility for the years ahead.
At €1,370m, order intake in the Digital Identity & Security segment was in line with sales, considering that most businesses in this segment do not book long-term orders.
H1 2021 sales
Sales in the first half of 2021 totalled €8,423m, compared with €7,751m in the first half of 2020, up 8.7% despite the civil aeronautics and biometrics businesses still being affected by travel restrictions. At constant scope and exchange rates,11 the organic increase of 9.8% mainly reflects the rebound of most business lines after Q2 2020 was heavily impacted by the onset of the health crisis. In addition to the collapse in demand in civil aeronautics, this crisis resulted in temporary operational disruptions across all Group activities.
Geographically12, this sales growth was driven by mature markets (+11.6% on an organic basis). France and Rest of Europe achieved the strongest performances. The recovery was weaker in emerging markets (+4.8% on an organic basis), which were notably impacted by phasing effects on large Transport contracts.
Sales in the Aerospace segment amounted to €2,112m, up 8.6% from H1 2020 (+10.2% at constant scope and exchange rates). This increase reflects the strong rebound in the space business resulting from the many commercial successes achieved since mid-2020, as well as the gradual recovery in demand for civil aeronautics, particularly in the aftermarket.
In the Transport segment, sales totalled €756m, up 5.4% compared to H1 2020 (+6.0% at constant scope and exchange rates). This rise was mainly driven by the strong commercial momentum of mainline rail, which was partially offset by the phasing effects on large urban rail signalling contracts (particularly in Doha (Qatar) and London).
Sales in the Defense & Security segment came to €4,152 m, up 15.7% compared to H1 2020 (+14.9% at constant scope and exchange rates) and 7% higher than in H1 2019. This strong rebound attests to the solid momentum of the Group’s solutions: at end-June 2021, the Group had a backlog of close to €23bn.
In the Digital Identity & Security segment, sales were down 2.2% at constant scope and exchange rates to €1,370m. This decline reflects the continued impact of the health crisis on demand for passports since Q2 2020, as well as a high base of comparison for EMV payment cards, which had seen strong growth in H1 2020. The cybersecurity business recorded double-digit growth, backed by a unified portfolio of Thales and Gemalto solutions.
H1 2021 results
In H1 2021, the Group posted EBIT13 of €768m (9.1% of sales), compared with €348m (4.5% of sales) in H1 2020.
The Aerospace segment posted EBIT of €69m (3.2% of sales), versus an EBIT loss of €109m (-5.6% of sales) in H1 2020. The return to a positive EBIT margin is the result of the recovery in sales, combined with the effects of the crisis adaptation plans.
EBIT for the Transport segment continued to rise, reaching €39m (5.2% of sales), versus €4m (0.6% of sales) in H1 2020. Despite the health crisis, the measures implemented as part of the segment’s transformation plan resulted in an increase in the EBIT margin in line with medium-term objectives (EBIT margin of 8% to 8.5%).
In the Defense & Security segment, EBIT stood at €497m, versus €359m in H1 2020 (+40.7% at constant scope and exchange rates). The EBIT margin for this segment came to 12.0%, versus 10.0% in H1 2020. The health crisis had caused operational disruptions in this segment during the second quarter of 2020.
At €152m (11.1% of sales), EBIT for the Digital Identity & Security segment continued to improve in line with the plan, despite the ongoing adverse impact of the health crisis on the biometrics business. The segment benefited from additional cost synergies and strict cost control, as well as leverage on cybersecurity sales growth.
At €34m in H1 2021, Naval Group’s contribution to EBIT returned to its pre-health crisis level (versus a negative €15m contribution in H1 2020).
Net financial interest was stable at -€30m in H1 2021. The other adjusted financial income and expenses item was less affected by foreign exchange losses than in H1 2020 (-€7m in H1 2021 versus -€15m in H1 2020). The change in adjusted financial expense on pensions and other long-term employee benefits (-€16m versus -€20m in H1 2020) was due to a further decrease in discount rates.
As a result, adjusted net income, Group share came to €591m, versus €232m in H1 2020, after an adjusted income tax charge14 of -€99m, vs. -€65m in H1 2020. At 14.7% at 30 June 2021 compared to 23.2% at 30 June 2020, the effective tax rate benefited from changes to tax rules in Italy and the United Kingdom. Restated for these items, the effective tax rate was 22.4%.
Adjusted net income, Group share, per share14 came to €2.78, up 155% compared to H1 2020 (€1.09).
Consolidated net income, Group share came to €433m, up sharply compared to 30 June 2020 (€65 m), on the back of the strong increase in adjusted net income.
Financial position at 30 June 2021
H1 2021 – financial position
Free operating cash flow was €420m, versus -€471m in H1 2020, on the back of the recovery in profitability, the internal measures implemented, and a reduced seasonality of WCR compared to previous years.
At 30 June 2021, net debt amounted to €2,496m, down by €1,432m year-on-year, after taking into account new lease liabilities totalling €54m (€95m at 30 June 2020) and after the payment of €290m in dividends (no dividend payout in H1 2020).
At 30 June 2021, shareholders’ equity, Group share totalled €5,664m, versus €5,115m at 31 December 2020. Consolidated net income, Group share (€433 m) and the decrease in net pension obligations (€394m net of tax) largely offset the dividend payout (€290m).
The public health and macro-economic context remains highly uncertain in the short term and could affect the pace of air traffic recovery and the investment plans of our customers.
Thales will continue to implement all the levers of its Ambition 10 strategic plan, designed to generate profitable and sustainable growth, combined with the structural adaptation plan in its civil aeronautics-exposed businesses, which will be impacted by this crisis over several years.
However, the solid H1 2021 performance has led the Group to upgrade its full-year sales target.
Consequently, assuming an economic and public health situation that does not experience any new major disruptions, and a normalization of the global semiconductor supply chain, Thales has set the following 2021 objectives:
- As in 2019 and 2020, a book-to-bill ratio above 1;
- Sales in the range of €17.5bn to €18.0bn16, taking into account the significant ongoing disruptions in civil aeronautics and the recovery of growth in other segments;
- An EBIT margin in the range of 9.5% to 10%, up 150 to 200 basis points from 2020, thanks to the full effect of the global crisis adaptation plan, ongoing Ambition 10 competitiveness initiatives and the further ramp up of Gemalto-related cost synergies.
21 Jul 21. Comment on SpaceTech Investment from Alexander Assim, Principle of Alicorn. Alicorn is a global venture capital firm established by the B Corporation accredited investment group Arowana.
“Investors are still erring on the side of caution when it comes to SpaceTech, mostly due to a misperception that they must wait till to ‘blast off’ to gain the desired returns. The distinction between commercialisation or mass adoption of SpaceTech and the realisation of an investment, are two very different beasts. The market is capable of moving at light speed when there is wide market agreement on what a company or sector’s potential will be, rather than what is today.
Investment opportunities in the SpaceTech sector are increasing. Virgin Galactic listed back in 2019 and has already proven that there’s investment opportunities prior to launch day, Seraphim Space Investment Trust listed in the UK last week and was oversubscribed, highlighting that the appetite is growing for the sector and SpaceX won’t be far behind. There is an entire industry to come, and probably all before Elon lands a cargo mission on Mars.”
20 Jul 21. Babcock and Rolls-Royce plot sale of stakes in RAF Voyager contractor AirTanker. Babcock International Group and Rolls-Royce Holdings have hired bankers to sell their stakes in AirTanker, which operates the RAF’s fleet of Voyager aircraft, Sky News learns. Two of Britain’s biggest manufacturers are hoisting a ‘for sale’ sign over their stakes in AirTanker, the company behind the RAF’s Voyager refuelling fleet. Sky News has learnt that Babcock International Group and Rolls-Royce Holdings have appointed investment bankers to market their combined shareholding in AirTanker. City sources said that Babcock and Rolls-Royce had asked Jefferies to kick off a sale process. The two companies own roughly 50% of AirTanker, although the value of their interest was unclear on Tuesday. AirTanker delivers the Future Strategic Tanker Aircraft contract for the Ministry of Defence (MoD), and is based at RAF Brize Norton. It is responsible for the British military’s air-to-air refuelling capability as well as serving international allies of the UK’s armed forces. The remaining shares in AirTanker are owned by Airbus Group and Thales, the French engineering group. (Source: News Now/https://news.sky.com/)
21 Jul 21. Saab’s Results January-June 2021: Strong sales growth and positive cash flow. Saab presents the results for January-June 2021.
Key highlights Q2 2021
- Orders increased 7% and the order backlog amounted to SEK 96.7bn.
- Organic sales growth of 15% driven by high project activity and deliveries.
- EBITDA increased 19% to SEK 1,196m (1,004), a margin of 11.8% (11.4).
- Operating income improved 10% and amounted to SEK 715m (652), corresponding to a margin of 7.1% (7.4), including costs for right-sizing measures of SEK 85 m.
- Operational cash flow was SEK 3,152m (1,817) due to large milestone payments received in the quarter.
- New organizational structure including Operational Excellence function effective as of July 1, 2021.
- Changed outlook: Organic sales growth for the full year 2021 to be around 10% (previous outlook was an organic sales growth in line with long-term target of 5%).
Statement by Micael Johansson, President and CEO, Saab:
Strong sales growth and positive cash flow
The activity in the defence market continued to be favourable in the second quarter and demand in our main markets remained good. This benefits Saab’s growth both internationally and in Sweden, supporting our multi-domestic strategy. In the quarter, orders continued to grow and increased 7%, amounting to SEK 9.9bn.
We secured a Future Development and Support contract for the Swedish Gripen C/D and orders for Training solutions for the Netherlands and for the U.S. Marine Corps. We also received orders for radar components for the G/ATOR system in the U.S., a Helicopter 15 support contract with Sweden and a contract for radar warning equipment for the German Tornado aircraft. Our solid order backlog is now amounting to SEK 97bn, a good contributor for future sales growth.
Organic sales increased 15% in the quarter driven by high activity level and deliveries in our defence projects. The civil aviation business still reported a decline in sales. Five out of six business areas showed improved volumes. For the first half of the year we delivered organic sales growth of 15%. Combined with our strong backlog for this year, we now increase our outlook on organic sales growth in 2021 to be around 10%.
The strong sales in the quarter contributed positively to earnings and EBITDA increased 19%, corresponding to a margin of 11.8% (11.4). Operating income increased by 10% and was SEK 715m (652), with a margin of 7.1% (7.4). This includes right-sizing measures from the closure of our Barracuda facility in the U.S. and adjusted capacity in our operations in South Africa. These measures had a negative impact on operating income of SEK 85m, corresponding to 0.8% margin impact. We reiterate our EBIT margin outlook for 2021.
As of July 1st, our new organisation, where six business areas becomes four, and the new Operational Excellence function, came into effect. The aim is to improve efficiency in our business by removing internal interfaces, drive synergies in operations and improve customer interaction.
The uncertainty of the pandemic, along with ongoing travel and other restrictions, continues to impact predictability. This also impacts some areas of the supply chain, however, we continue to have a close dialogue with our suppliers to mitigate the effects.
Operational cash flow in the quarter improved significantly and amounted SEK 3.2bn (1.8). The majority of this year’s large milestone payments were received in the first half of the year. We reiterate the outlook of positive operational cash flow for the full year.
A commitment to society has been at the core of Saab’s business since its founding, supporting nations to keep people and society safe. In our commitment to contribute to a sustainable society, we are also working actively to reduce the environmental impact, from our operations, the value-chain and products.
During the first half of the year, a project to identify and prioritise group-wide climate-related risks and opportunities was conducted, through the Task Force on Climate Related Financial Disclosures (TCFD) framework. Moreover, together with Swedish industry, a concept for flexible production and resilience was presented to better prepare Sweden for the next crisis.
To visualize our progress in our sustainability work, in this interim report we have started to describe our sustainability progress. I am confident that Saab is well positioned on its journey to create long-term sustainable value for all our stakeholders and society as a whole.
20 Jul 21. Senator Warren questions Lockheed’s antitrust solution to buy Aerojet. U.S. Senator Elizabeth Warren has asked the Federal Trade Commission to take a tougher look at defense industry mergers, questioning a proposal from Lockheed Martin that would allow it to buy the biggest independent maker of rocket motors, Aerojet Rocketdyne Holdings.
The Democratic senator, who has a keen interest in corporate behavior, asked the FTC to examine the premise and efficacy of internal firewalls like those Lockheed proposes to prevent it from gaining a competitive advantage over peers once the deal closes, according to a July 16 letter seen by Reuters.
Lockheed Martin (LMT.N) announced a $4.4bn agreement to buy Aerojet (AJRD.N) late last year, a deal that has raised eyebrows because it would give Lockheed – the No. 1 defense contractor – ownership of a vital piece of the U.S. missile industry whose motors are used in everything from the homeland missile shield to Stinger missiles.
Lockheed has said after the deal closes “the Aerojet Rocketdyne business will continue to serve as a merchant supplier” to the entire defense industry, a premise that was met with skepticism by Raytheon Technologies (RTX.N), a major customer for rocket motors. read more
Internal firewalls would be needed at the new company to protect competitor intellectual property, pricing and product progress in the highly competitive weapons business.
Warren’s letter urged the FTC to take a stronger antitrust stance on defense deals and said the Lockheed tie-up should not be allowed until the FTC understood the effectiveness of past internal firewalls, which she views as necessary to maintain competition, as well as national security.
In a statement, Lockheed said the company “has a long history of successfully and ethically operating as a merchant supplier to the entire industry,” adding it has operated with “effective and trusted firewalls” in the past.
A firewall is an example of a “behavioral remedy,” one of the tools the FTC has to preserve competition. That is why Warren’s letter to FTC Chair Lina Khan asked if “behavioral remedies” have protected competition and prevented monopolistic behavior in the defense industry.
Behavioral remedies usually expire after a few years.
A “structural remedy,” a more common enforcement mechanism, generally requires a company to sell a line of business to prevent monopolistic behavior.
In February, the FTC extended its review of the deal under the Hart-Scott-Rodino Act to scrutinize potentially anti-competitive mergers.
Lockheed said it expected the deal to close in the fourth quarter of this year. (Source: Reuters)
19 Jul 21. Ultra Electronics transforming at pace. The defence contractor’s self-help measures are already generating substantive benefits.
- Record order book and significant pipeline opportunities
- Improved showing by the Forensic Technology segment
There were no great surprises, nasty or otherwise, in half-year figures for Ultra-Electronics (ULE), though they were superior to consensus expectations. Aggregate order volume stood at a record of £1.3bn, reflecting growth in advance of 60 per cent over the past five years. And the defence contractor reckons it has a better than even chance of securing pipeline contracts worth an estimated £12bn through to the end of decade.
Revenue pulled back from a year earlier due to supply chain disruptions experienced in Q1 2021, with the group’s Maritime business unit the main casualty. That’s set against rising receipts from The Pentagon for tactical radio equipment and strengthening performance in the Forensic Technology segment, including a $24m (£17.5m) contract covering multiple states in Brazil. Overall, underlying operating profit was up by 16.5 per cent to £62.2m.
The transformation programme is delivering ahead of plan, with greater than expected benefits of £57m by 2024. The extra capital in prospect should not only boost R&D, but also potentially make the group more competitive in the contract bidding process. It is too early to determine the extent to which the programme will benefit profitability, but it’s worth noting that the underlying operating profit margin of 15.4 per cent represents a 260-basis point increase on the 2020 comparator.
Lowly net debt, good order visibility and increased efficiencies will certainly improve any defensive valuation case made by the group’s directors assuming Cobham decides to move ahead with a formal offer on 23 July. The shares are up by 23 per cent since we highlighted the investment case in April 2020, but aren’t prohibitively priced at 18 times FactSet’s forward adjusted earnings consensus of 128p a share. Last IC view: Buy, 2,166p, 28 Jun 2021. (Source: Investors Chronicle)
14 Jul 21. Kromek Group plc (“Kromek” or the “Group”) Final Results. Kromek (AIM: KMK), a worldwide supplier of detection technology focusing on the medical, security screening and nuclear markets, announces its final results for the year ended 30 April 2021.
- Revenue of £10.4m (2020: £13.1m)
- Gross margin was 48.4% (2020: 47.3%)
- Adjusted EBITDA* loss of £1.7m (2020: £0.4m loss)
- Loss before tax was £6.3m (2020: £18.3m loss)
- Cash and cash equivalents at 30 April 2021 were £15.6m (30 April 2020: £9.4m) *Adjusted EBITDA is defined as earnings before interest, taxation, depreciation, amortisation, exceptional items, early settlement discounts and share-based payments. For further details, see the Financial Review below. Operational Summary • Resumption of orders and shipments across all segments in final two months of the first half, following the impact of COVID-19, with increased commercial activity in the second half, resulting in revenue for H2 2021 being 26% higher than H1 2021
- Medical imaging segment returned to growth trajectory in the second half of the year
o Ramp up in delivery under medical imaging contract expected to be worth $58.1m as the customer began installing its scanner in multiple countries
o Received a $600,000 order from an OEM customer for detectors to be used in niche SPECT applications
o Progressed development programme for ultra-low dose MBI technology and entered the new area of improving outcomes from cancer surgery
- Continuing commercial traction and development of nuclear security products, with sales in Europe, the US and Asia o Expansion of global footprint with sales commencing in 9 new countries and engagement of 9 new distributors o Continued to supply products to government agencies in the US and UK; the Irish Civil Defence; and the European Commission o Completion of development project with the Defense Threat Reduction Agency (“DTRA”), an agency of the US Department of Defense, for a ruggedised small form factor nuclear radiation detector for military applications o Launch of next-generation D3 PRD and D5 RIID high-performance radiation detectors • 24 new customers won in the civil nuclear segment and widening interest for drone-based radiation mapping system, including sales to the civil emergency services sector • Significant progress in fast-growing bio-security market o Awarded $5.2m contract extension in the year and a further $6m post period by the Defense Advanced Research Projects Agency (“DARPA”), an agency of the US Department of Defense, to advance the development of a mobile wide-area bio-security system capable of detecting and identifying airborne pathogens
- Commenced field trials in an airport and, post period, in schools, airports and other locations of an airborne COVID-19 detection system under a £1.25m project with funding from Innovate UK • Received first commercial order from security screening OEM customer that achieved highest level of European liquid explosive detection certification for cabin baggage for its scanner
- Continued improvement in CZT manufacturing processes in the UK and US facilities, including introduction of further process automation
- 3 new patents were filed and 10 were granted during the year Dr Arnab Basu, CEO of Kromek, said: “Against a backdrop of significant global uncertainty, Kromek has emerged from the 2021 financial year in a stronger position than when we entered. While the disruption across our markets in the early part of the year impacted our sales, our revenue for the second half was 26% above the first half, with the strong momentum continuing post year end. In particular, we are seeing continued traction in the medical imaging segment as our customers increasingly roll out their products incorporating our technology. We are extremely encouraged by the results that we are receiving from the piloting of our biological- 2 threat detection solution. We also believe that we are well-positioned to benefit from the increase in government defence and security spending globally, including in the UK, as evidenced by our announcement today of the receipt of our first major order for our D5 RIID. As a result, and with excellent visibility over full year forecasts, we are on track to deliver our highest ever annual revenue for the full year to 30 April 2022, representing significant growth over 2021. Consequently, and combined with the successful fundraising completed in the year under review, we are well-placed to capitalise on the substantial opportunities across our business and the Board continues to look to the future with increased confidence.” This announcement contains inside information.
16 Jul 21. ASGN Incorporated Announces Acquisition of IndraSoft. Acquisition significantly expands the Company’s customer base and relationships with the Air Force, DISA, and Army Intelligence.
ASGN Incorporated (NYSE: ASGN), one of the foremost providers of IT and professional services in the technology, digital, and creative, fields across the commercial and government sectors, announced today the acquisition of IndraSoft Inc., a leading cybersecurity and digital transformation solutions provider to the federal government. IndraSoft’s team of more than 220 highly skilled consultants will be integrated into the ECS Missions Solutions business unit.
Founded in 2004 in Reston, VA, IndraSoft is an award-winning solutions provider with a deep footprint across the U.S. Air Force, Army Intelligence, and the Defense Information Systems Agency (DISA), as well as other defense agencies and the Census Bureau. IndraSoft provides depth in digital transformation, DevSecOps, cybersecurity, and cyber analytics solutions.
“We are thrilled to welcome the IndraSoft team to ASGN,” said Ted Hanson, ASGN President and Chief Executive Officer. “The acquisition of IndraSoft is yet another example of our long-term capital deployment strategy to acquire high-growth consulting businesses that position ASGN as an industry-leading provider of IT services and solutions to the commercial and government marketplaces. IndraSoft’s depth and breadth of technical capabilities, talent, and solutions align perfectly with our Federal Government Segment and ECS’ digital modernization expertise.”
“The acquisition of IndraSoft deepens our footprint at key customers, including the U.S. Air Force, Army Intelligence, DISA, and other defense agencies,” said George Wilson, President of ECS.
“IndraSoft’s innovative culture and long track record of success make it a great fit with our own unwavering commitment to exceptional service delivery for our customers. We look forward to successfully pursuing new mission-impactful work together,” added John Heneghan, Chief Operating Officer of ECS.
“At IndraSoft, we are dedicated to enabling mission results through differentiated solutions and a culture of continuous improvement,” said Neeraja Lingam, CEO of IndraSoft. “We have successfully delivered value and transformative services for nearly two decades. Now, we are excited to join ECS and accelerate our combined growth trajectory by expanding upon the resources and capabilities we can deliver to our customers.”
In addition to the cash consideration, ASGN is granting restricted stock unit awards to 16 IndraSoft employees covering approximately 52,000 shares. Subject to continued service to ASGN, these grants will vest: (a) one-half on the second anniversary of the grant date, and (b) 25 percent on each of the third and fourth anniversaries of the grant date. The restricted stock unit awards were granted as employment inducement awards pursuant to the New York Stock Exchange rules. (Source: BUSINESS WIRE)
16 Jul 21. Nordic Unmanned Acquires AirRobot. Nordic Unmanned has signed an agreement to acquire 100 percent of the shares the leading German drone developer and manufacturer AirRobot. The acquisition secures patented world-leading last-mile unmanned delivery technology and extends the product and customer portfolio within the Defense & Security business area.
“The acquisition of AirRobot gives access to a strong and proven portfolio of products and patents. It includes an excellent position in the German defence market and an exciting technological roadmap for the global unmanned last-mile logistics market. We are very happy to welcome the strong and experienced team of 30 developers and production staff, located in one of the most important European markets, to the Nordic Unmanned family. The increased product portfolio within the logistic and defence business areas will contribute strongly to our communicated 2025 growth strategy.”
Knur Roar Wiig, CEO Nordic Unmanned.
Experienced supplier for the German armed forces
Founded in 2005, AirRobot is a true pioneer in the European drone industry. AirRobot had revenues of EUR 2.3m in 2020 and a profit before tax (EBT) margin of 5%. The company is a long-standing supplier for the German armed forces (“Bundeswehr”) of both drone systems and Maintenance, Repair and Overhaul (“MRO”) services since 2005.
During the past years, the company has invested heavily in next generation drones, to position itself for a major ongoing defence contract in Germany. The company holds ISO 9001 certification as a drone developer and manufacturer and is fully certified to deliver to German and other NATO forces.
“This transaction is in line with our announced strategy of consolidating the fragmented drone industry in Europe. It builds on the strong and booming defence industry relationship between Germany and Norway following the joint submarine programme recently agreed between the two nations. With this transaction we will be able to serve our current clients within the German and Norwegian governments in an even better manner,” Knur Roar Wiig, CEO Nordic Unmanned
AirRobot is located in the city of Arnsberg in the Ruhr region, in the heart of the German industrial area.
- Key products and technologies
AirRobot possesses a line of proprietary drone systems with more than 16 000 flight hours to date: Important in relation to German army, potential for sale to other armed forces in Germany and other countries.
- Coaxial motor configuration patent in Germany, UK, US, Canada, Ireland, and several other key markets: A design currently used by several logistical drones, including Nordic Unmanned’s own Staaker BG200 system.
- Last-mile delivery drone solution: Complete, patented and highly scalable logistic last mile platform concept for global clients.
The acquisition of AirRobot adds revenue, a full operational team and an exciting new CRM pipeline for Nordic Unmanned from day one. Long-term, AirRobot will give us the realisation of the patented concept for last-mile logistics, placing Nordic Unmanned as a front runner in the global unmanned logistics market. I highly recommend those with an interest in our industry to view the AirRobot video available online, highlighting this truly revolutionary and scalable concept Knur Roar Wiig, CEO Nordic Unmanned
The transaction will be settled at closing with 80 percent in cash and 20 percent in Nordic Unmanned shares, issued in line with the board’s authorization, for a total value of EUR 4.45m. The shares will serve as escrow for the certain seller’s guarantee obligations for 18 months. The seller has the option to choose between shares or cash at release of the escrow. An additional EUR 0.5m in cash is payable if certain performance targets are met.
The seller is AirRobot’s founders and current CEO and CFO, Mr. Burkhard Wiggerich and Mrs. Jolante Wiggerich. Upon completion of the transaction, they will renounce their posts but will continue to assist the company as required.
“This is the perfect match for AirRobot. As a listed, international company, Nordic Unmanned provides a wonderful platform for further growth, based on our strong technology platform and our position in the German market,” Burkhard Wiggerich, CEO AirRobot.
The transaction is subject to Investment Control Approval from German authorities and is expected to take place before year end. (Source: UAS VISION)
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.