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16 Dec 22. Space imaging company Maxar agrees to $6.4bn takeover. Maxar Technologies, a provider of space imaging services to companies and governments, agreed to be acquired by private equity firm Advent International in an all-cash transaction valued at $6.4bn. Under the terms of the agreement, Advent will acquire all outstanding Maxar common stock for $53 per share, a 129% premium over the closing price on Dec. 15, the last full trading day on the New York Stock Exchange prior to the announcement. As a private company, Maxar will accelerate investments in satellite technologies and data insights used by government and commercial customers, as well as pursue acquisitions, it said in a statement. This includes supporting the delivery of the company’s Legion satellite constellation, accelerating the launch of Legion 7 and 8 satellites and expanding its Earth Intelligence and Space Infrastructure businesses through investments in capabilities such as advanced machine learning and 3D mapping.
“Advent has a proven record of strengthening its portfolio companies and a desire to support Maxar in advancing our long-term strategic objectives,” Maxar CEO Daniel Jablonsky said in the statement. “As a private company, we will have enhanced flexibility and additional resources to build on Maxar’s strong foundation, further scale operations and capture the significant opportunities in a rapidly expanding market.”
With some $28bn invested across the defense, security and cybersecurity sectors in the last three years, Boston-based Advent’s portfolio companies support many satellite and defense platforms which serve the U.S. government and its allies as well as companies across the globe. The firm said it arranged debt and equity financing commitments to finance the acquisition. The transaction is expected to close mid-2023, subject to customary closing conditions. Maxar, which has 4,400 employees, will operate under the same brand and maintain its headquarters in Westminster, Colorado, and will remain U.S.-controlled and operated. (Source: Defense News)
09 Dec 22. OHB SE and AFK Enterprise agree to acquire stake in Deutsche Aircraft Holdings: focus on climate-neutral flying! OHB and AFK’s joint company DAH Beteiligungsgesellschaft mbH on Thursday, December 8th, 2022 signed an agreement to secure an important minority equity investment in Deutsche Aircraft Holdings (DAH), the sole owner of Deutsche Aircraft Group companies. The investment comes from a joint venture between aerospace company OHB SE and investment company AFK Enterprise AG, and will propel the development of new green aviation technologies including the D328eco™, an environmentally-friendly version of the acclaimed Do328® short-haul passenger aircraft manufactured by Deutsche Aircraft GmbH. Under the agreement, the investors have the potential to acquire additional ownership up to a majority at a later point in time.
The partnership fuels progress on the D328eco and Leipzig production facilities, as well as to open opportunities for the development of future aircraft variants in new international markets.
Dave Jackson, CEO of Deutsche Aircraft said: “This investment reaffirms both the strong market need for a proven regional aircraft and underpins the belief in the green aviation sector, in particular the opportunities Deutsche Aircraft’s new D328eco aircraft will offer.”
Deutsche Aircraft’s D328 series of aircraft is founded on the proud heritage of Dornier and Deutsche Aircraft is the holder of the Do328® type certificate. With new propulsion systems, latest-generation avionics and more seats, the D328eco will set new standards for environmentally-friendly short-haul flying. Deutsche Aircraft is also studying a variety alternative fuels and future climate-neutral propulsion systems as part of its product roadmap. The Do328 is the last commercial aircraft to date to have been developed and built entirely in-house by a German company – and this will also be the case with the D328eco.
The equity stake in DAH is subject to approval from the German Government which is currently supporting the development of the D328eco with a high-volume development cost loan, and, in addition, supports the development of clean aviation initiatives at Deutsche Aircraft. The transaction is anticipated to close during the first quarter of 2023, following regulatory approvals and other customary closing conditions.
With this investment we are significantly strengthening our Aerospace business segment,” said Dr. Lutz Bertling, member of OHB SE’s management board. “Beyond the current project, OHB intends to develop with its partners strategically more joint business in Europe, the United States and Middle East, including beyond aviation, with first projects already under discussion in the defense and space sectors.”
“For us, this investment is another important step in diversifying our portfolio into mobility with environmentally friendly drives,” said Dr. Berthold Peikert, CEO AFK Enterprise AG.
15 Dec 22. Crane Holdings, Co. Files Form 10 Registration Statement in Connection with Planned Business Separation.
- On-Track to Complete Previously Announced Separation on April 3, 2023
- Crane Company and Crane NXT Both Expect to Host Investor Conferences on March 9, 2023
Crane Holdings, Co. (“Crane,” NYSE: CR), a diversified manufacturer of highly engineered industrial products, today announced that Crane Company has filed a Form 10 Registration Statement with the U.S. Securities and Exchange Commission (SEC) relating to the company’s previously announced plan to separate into two simplified businesses to optimize investment and capital allocation, accelerate growth, and unlock shareholder value.
Max Mitchell, Crane’s President and Chief Executive Officer stated: “The public filing of the Form 10 is another important milestone toward the separation transaction to create Crane Company and Crane NXT. We continue to believe that the separation will create two focused businesses, each with differentiated technology, industry leading positions, strong balance sheets and significant opportunities for growth and value creation.”
Update on Previously Announced Separation
On March 30, 2022, Crane announced that its Board of Directors had unanimously approved a plan to pursue a separation into two independent, publicly-traded companies to optimize investment and capital allocation, accelerate growth, and unlock shareholder value.
Upon completion, Crane shareholders will benefit from ownership in two focused and simplified businesses that are both leaders in their respective industries and well-positioned for continued success:
- Crane NXT will be a premier Industrial Technology business, with substantial global scale, a best-in-class margin profile, and strong free cash flow generation. This year, the Payment and Merchandising Technologies (“PMT”) business that will become Crane NXT is expected to achieve approximately $1.4bn in sales with a pre-corporate Adjusted EBITDA margin approaching 30%.
In addition to its market-leading brands, Crane NXT will differentiate itself through its technology leadership, positioning it to leverage long-term secular drivers including automation, security, and productivity across several high-growth adjacent markets.
After the separation, Crane NXT will be positioned to drive earnings growth through continued investment in the business and value-enhancing acquisitions. Its balance sheet and strong free cash flow will also allow it to support significant acquisitions and a dividend in-line with peers. Crane NXT’s shares are expected to be listed on the NYSE under the ticker symbol “CXT”. As previously announced, Crane NXT will be led by Aaron Saak, with the executives currently leading Crane’s PMT business continuing to serve in senior positions.
- Crane Company will be a leading global provider of mission-critical, highly engineered products and solutions, with differentiated technology, respected brands, and leadership positions in its markets. After the separation, Crane Company will include the Aerospace & Electronics and Process Flow Technologies global strategic growth platforms, as well as the Engineered Materials segment.
This year, these businesses are expected to generate approximately $1.9bn in annual sales with a pre-corporate Adjusted EBITDA margin of approximately 18.5%. The company will be well-positioned to accelerate organic growth in its large and attractive end markets, benefit from favorable secular trends, and apply its proven processes to drive new product development and commercial excellence. Crane Company is expected to have a strong, well-capitalized balance sheet underpinning a capital deployment strategy focused on supporting the company’s organic and inorganic strategic growth objectives, while providing a dividend in-line with peers.
Crane Company will be led by Max Mitchell, who will continue to serve as President and Chief Executive Officer, with Rich Maue continuing to serve as Chief Financial Officer. The company intends to continue to be listed on the NYSE under its current ticker symbol, “CR”.
Upcoming Events
- Fourth Quarter Earnings and 2023 Outlook: Crane will report its fourth quarter earnings on Monday, January 23, 2023 after close of market by public distribution and the Crane website at www.craneco.com. The conference call to discuss fourth quarter financial results and the 2023 outlook for both Crane Company and Crane NXT will be held on Tuesday, January 24, 2023 at 10:00 A.M. (Eastern). All interested parties may listen to a live webcast of the call, along with slides that accompany the call, both accessible from the Company’s website. An archived webcast will also be available to replay this conference call directly from the Company’s website under Investors, Events & Presentations.
- Investor Conference for Crane Company and Crane NXT: Crane Company and Crane NXT will each host an investor conference on March 9, 2023 in New York City. At both events, key executives will provide a detailed review of each company’s business, strategy, capital structure, and capital deployment policies, as well as an update on their 2023 business outlook. Additional details will be forthcoming in early 2023.
- Separation. We expect to complete the planned separation on April 3, 2023 subject to the satisfaction of customary conditions, including the Form 10 being declared effective and final approval of the separation by Crane Holdings, Co.’s Board of Directors. Shareholder approval is not required.
Transaction Details
The separation is expected to occur through a tax-free distribution of the Aerospace & Electronics, Process Flow Technologies, and Engineered Materials businesses to the Company’s shareholders. Payment & Merchandising Technologies will be renamed Crane NXT concurrent with the separation, and the Aerospace & Electronics, Process Flow Technologies, and Engineered Materials businesses will be named Crane Company. Upon completion of the separation, shareholders as of the record date will own 100% of the equity in both of the publicly traded companies.
About Crane Holdings, Co.
Crane Holdings, Co. is a diversified manufacturer of highly engineered industrial products. Founded in 1855, Crane provides products and solutions to customers across end markets including aerospace, defense, chemical and petrochemical, water and wastewater, payment automation, and banknote security and production, as well as for a wide range of general industrial and consumer applications. The Company has four business segments: Aerospace & Electronics, Process Flow Technologies, Payment & Merchandising Technologies, and Engineered Materials. Crane has approximately 11,000 employees in the Americas, Europe, the Middle East, Asia and Australia. Crane is traded on the New York Stock Exchange (NYSE:CR). For more information, visit www.craneco.com. (Source: BUSINESS WIRE)
14 Dec 22. Cohort expects to profit as countries arm up.
Increased spending from the UK Ministry of Defence swung the company back to profitability
- Chess delivers operational improvement
- Management expects medium-term profit growth
As a military technology company, Cohort (CHRT) will benefit from the tailwinds of a tense geopolitical climate. Driven by an increase in spending by the UK’s Ministry of the Defence, the company has bounced back from a loss last year and has a record order book going into the second half of this year.
The return of Chess to profitability has helped. The division, which makes surveillance and targeting devices, swung back to an operating profit of £0.3mn after making a loss of £2.7m last year. However, Cohort expects to squeeze more out of Chess – which it acquired three years ago – given the net margin is still just under 2 per cent.
Chess is the largest division, making up 25 per cent of total revenue, so improved profitability there will go a long way to driving improved profitability across the wider group. The next biggest, MASS, the military data technology division, makes up 22 per cent of revenue. Its operating profit rose from £3.7m to £4m and saw its net profit margin rise four percentage points to 23 per cent. MASS is used for training, so the UK’s plan to grow the military will drive medium-term growth.
Despite the stronger performance, operating cash flow fell from an £8.5mn inflow last year to a £5.8mn outflow. This was because of a big increase in working capital. Stock has been built up for second-half deliveries and will unwind in the next six months.
The record order book of £304m, up from £291m, means management expects medium-term organic growth. The brokers agree. FactSet consensus is for EPS to rise from 37p this year to 45p in 2024. This gives an affordable looking 2024 PE ratio of 12.4. Political industrial complex is the new central bank. Don’t bet against it. Buy. Last IC View: Hold, 525p, 14 Dec 2021 (Source: Investors Chronicle)
13 Dec 22. Shield AI Boosts Series E to $225m as Company Continues to Accelerate Building the World’s Best AI Pilot. Shield AI, a fast-growing defense technology company building AI pilots for aircraft, today announced it has raised additional equity capital from the U.S. Innovative Technology Fund (USIT). This additional raise was done at the company’s Series E price and closes out the round at $225m, with $150m in equity and $75m in debt. The initial part of Series E was closed in June, which made the company the fourth venture-backed, multi-bn-dollar defense-technology startup in 20 years.
“We fundamentally believe that the greatest victory requires no war, which is why deterrence technology like AI pilots for defense are so crucial. We are racing to put up swarms of highly intelligent aircraft to deter the next conflict and this new capital accelerates our efforts,” said Brandon Tseng, Shield AI’s cofounder, president, and former Navy SEAL.
Shield AI’s Hivemind software is an AI pilot for military and commercial aircraft that enables intelligent teams of aircraft to perform missions ranging from room clearance, to penetrating air defense systems, and dogfighting F-16s. Hivemind employs state-of-the-art algorithms for planning, mapping, and state-estimation to enable aircraft to execute dynamic flight maneuvers and uses reinforcement learning for discovery, learning, and execution of winning tactics and strategies. On aircraft, Hivemind enables full autonomy and is designed to run fully on the edge, disconnected from the cloud, in high threat, GPS and communication-degraded environments.
“Automated defense capabilities will play an increasingly essential role in our defense programs and are critical to our ability to remain competitive,” said Thomas Tull, Chairman of USIT. “Shield AI is a leader in this space, developing some of the most advanced and cutting-edge technology for AI piloting. We are proud to be able to support Shield AI and the work they are doing in defense.”
About Shield AI
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 has offices in San Diego, Washington D.C., Dallas, and Abu Dhabi. Shield AI’s products and people are currently in the field actively supporting operations with the U.S. Department of Defense and allies. For more information, visit www.shield.ai. (Source: PR Newswire)
14 Dec 22. Cohort plc, the independent technology group, today announces its half year results for the six months ended 31 October 2022.
A much stronger first half for the Group with a record closing order book. The increase in the interim dividend reflects the Board’s confidence in the Group’s growth prospects and commitment to a progressive dividend policy
Financial highlights
- Revenue up 29% to £77.5m (2021: £60.0m).
- Adjusted* operating profit up significantly to £5.0m (2021: £1.7m)
- Strong adjusted* earnings per share of 10.12 pence (2021: 3.04 pence).
- Order intake £88.6m (2021: £105.3m), 1.1x the period’s revenue.
- Record closing order book of £304.2m (30 April 2022: £291.0m).
- Interim dividend increased by 10% to 4.25 pence per share (2021: 3.85 pence per share).
- Net debt of £0.6m at 31 October 2022 (31 October 2021: £6.1m net funds). As at 9 December 2022 net funds were £7.6m.
* Adjusted figures exclude the effects of marking forward exchange contracts to market value, amortisation of other intangible assets (£1.8m; 2021: £3.4m) and exceptional items (£nil; 2021: £0.3m income).
Operational highlights
- Increased revenue was driven by higher UK MOD sales, particularly at MCL and export revenue at Chess.
- Adjusted* operating profit improved significantly on last year, due to higher revenue at Chess and MCL. MASS and SEA also performed slightly better. ELAC Sonar (ELAC) was weaker due to mix and delayed orders. Slower deliveries at EID resulted in an operating loss.
- Order intake was over 1.1x the period revenue with strong performances at Chess, MCL and SEA, the latter including a large support contract for the UK’s Royal Navy
Looking forward
- Record high order book of £304.2m with over £80m of revenue deliverable in the second half. Taking into account revenue recognised in the first half, this covers over 95% (2021: 89%) of consensus forecast revenue for the full financial year. Revenue deliverable in future years from committed orders continues to grow.
- The current year outlook for the Group is therefore unchanged.
- We continue to see a positive outlook for organic growth in the medium term.
Commenting on the results, Nick Prest CBE, Chairman of Cohort, said: “The first half has seen a welcome return to growth by the Group, with our order book underpinning most of the second half of this financial year. In line with previous experience we anticipate a stronger Group performance in the second half and thus remain on track to achieve our expectations for the full year. The Group’s order book has steadily increased over the last few years to what is now a record high. Its longevity has also increased with revenue now deliverable out to 2032. The pipeline of order opportunities for the remainder of the year also looks strong. Demand for our solutions and services continues to be driven by the UK’s increased spending on defence and security and by international tensions in the Asia-Pacific region and Europe. Overall, we continue to see a positive outlook for organic growth in the years ahead.”
14 Dec 22. Cohort expects to profit as countries arm up.
Increased spending from the UK Ministry of Defence swung the company back to profitability
- Chess delivers operational improvement
- Management expects medium-term profit growth
As a military technology company, Cohort (CHRT) will benefit from the tailwinds of a tense geopolitical climate. Driven by an increase in spending by the UK’s Ministry of the Defence, the company has bounced back from a loss last year and has a record order book going into the second half of this year.
The return of Chess to profitability has helped. The division, which makes surveillance and targeting devices, swung back to an operating profit of £0.3mn after making a loss of £2.7m last year. However, Cohort expects to squeeze more out of Chess – which it acquired three years ago – given the net margin is still just under 2 per cent.
Chess is the largest division, making up 25 per cent of total revenue, so improved profitability there will go a long way to driving improved profitability across the wider group. The next biggest, MASS, the military data technology division, makes up 22 per cent of revenue. Its operating profit rose from £3.7m to £4m and saw its net profit margin rise four percentage points to 23 per cent. MASS is used for training, so the UK’s plan to grow the military will drive medium-term growth.
Despite the stronger performance, operating cash flow fell from an £8.5mn inflow last year to a £5.8mn outflow. This was because of a big increase in working capital. Stock has been built up for second-half deliveries and will unwind in the next six months.
The record order book of £304m, up from £291m, means management expects medium-term organic growth. The brokers agree. FactSet consensus is for EPS to rise from 37p this year to 45p in 2024. This gives an affordable looking 2024 PE ratio of 12.4. Political industrial complex is the new central bank. Don’t bet against it. Buy. Last IC View: Hold, 525p, 14 Dec 2021. (Source: Investors Chronicle)
12 Dec 22. HII boss sees mission tech business growing faster than shipbuilding. HII’s mission technologies business, expanded through acquisitions like Alion Science and Technology as well as Camber, makes up about 25% of the contractor’s sales and will “outpace shipbuilding from a growth perspective,” according to HII’s chief executive.
Though known as a shipbuilder, HII, which includes Newport News Shipbuilding and Ingalls Shipbuilding, has sought to expand its portfolio. The company last year acquired Alion for $1.65 bn, adding more than 3,200 employees. In 2016, the company had picked up Camber, including 1,700 employees.
Alion was best known for its expertise in training and simulation, cyber technology, and intelligence, surveillance and reconnaissance, whereas Camber contributed capabilities including software engineering and intelligence analysis.
In an interview with Defense News on the sidelines of the Reagan National Defense Forum, which took place Dec. 2-3, Chris Kastner said the company is focused on getting out of debt. The top executive added that HII doesn’t see significant capability gaps for which it needs acquisitions to fill, but remains open to evaluating potential deals.
The McLean, Virginia-based mission technologies division includes six groups: C5ISR; cyber, electronic warfare and space; unmanned systems; live, virtual, constructive solutions; fleet sustainment; and nuclear and environmental services. While Kastner said this business will grow faster than the shipbuilding units, he doesn’t have a specific target for its size.
Meanwhile, he said inflation is going to make it “potentially a challenge getting new ships under contract.” The question will be whether there’s “enough funding to support the price,” he added.
He told Defense News the company is providing the U.S. Navy and the Office of the Secretary of Defense with data about increased costs, including for the workforce and parts.
“We’re trying to get in front of it,” he said. “It’s going to play out over the next three years.”
The problem of inflation, Kastner added, will weigh on both the company’s supply chain and lead times. (Source: C4ISR & Networks)
13 Dec 22. Chemring Group PLC (“Chemring”) today announces its results for the year ended 31 October 2022.
Highlights:
- FY22 performance exceeded the Board’s initial expectations with strong performance in both sectors despite a challenging macro-economic environment
- Roke revenue exceeded £100m for the first time and with order intake of £168m, up 59%, is well positioned to continue its growth trajectory in what continues to be a buoyant market
- Post year-end acquisition of Geollect completed on 7 December 2022
- Order intake for Countermeasures & Energetics was £356m, up 40%, driven by multi-year orders received across the sector
- Investment in the Group’s manufacturing infrastructure continues to be a key enabler to deliver improved safety and operational excellence, with the Countermeasures & Energetics margin improving from 16.2% to 17.4%
- The continued reduction in net debt by 73% to £7.2m was driven by strong operating cash generation and cash conversion of 109%. Net debt to underlying EBITDA of 0.1 times
- Proposed final dividend increased by 19% to 3.8p, giving a total dividend of 5.7p (3.5 times cover)
- Board’s expectations for FY23 are unchanged. Approximately 86% (2021: 84%) of expected FY23 revenue is covered by the order book
Michael Ord, Group Chief Executive, commented: “This has been another year of positive performance and growth across the Group, exceeding the Board’s initial expectations despite a challenging macro-economic environment. I am delighted with the financial and operational progress that continues to be made across the Group as we build a stronger, higher quality and technology focused business.
“Our purpose at Chemring is to deliver innovative technologies and products that detect and defeat ever-changing threats and help make the world a safer place. This has never been as important as it is today given the fast changing geopolitical and technological backdrop. Our relentless focus on living our shared values of Safety, Excellence and Innovation is what powers this and I would like to thank all my colleagues across Chemring for their determination, hard work and support. Our continued progress would not be possible without their collective efforts.
“Trading since the start of the current financial year has been in line with expectations. With 86% of FY23 expected revenue covered by the order book, the Board’s expectations for FY23 performance are unchanged. Chemring is well placed, with a robust strategy, market-leading positions across different geographies and sectors, and with products and services that are critical to our government and blue-chip customers around the world. Chemring’s long-term prospects remain strong.”
Investors Chronicle Comment: Chemring exits FY 2022 with good revenue visibility. Defence contractor Chemring (CHG) reported a double-digit rise in annual revenue and said that its full-year results trumped initial expectations. The top-line was 13 per cent to the good at £443mn, while EPS increased by 15 per cent to 16.9p. The outlook is positive, especially given wider economic anxieties, with the order book up by 30 per cent year-on-year to £651mn. Current trading is in line with expectations and the group rewarded shareholders with a 19 per cent increase in the annual dividend to 5.7p. All in all, a strong showing which demonstrates counter cyclical properties backed by technologies that are increasingly in demand.
13 Dec 22. Chemring supported by need for systems upgrades.
- Excellent revenue visibility
- Further debt reduction
When we covered Chemring’s (CHG) interim statement in June, we noted that the conflict in Ukraine had highlighted the need for countries, even advanced military powers, to modernise their defence capabilities – such is the rate of change on the technological front. Subsequent events in the conflict have only reinforced this notion and the lessons haven’t been lost on those in charge of defence procurement, even if many governments are under fiscal pressure.
The defence contractor’s full-year figures also point to counter-cyclical qualities from the investment angle. As a constituent of the FTSE 250, Chemring has increased in value by 1.6 per cent through this year, a modest capital return, but wholly favourable when set against the index’s 21 per cent decline over the same period. This is partly due to the group’s international reach – around half of group revenue is dollar denominated. But it also reflects the growing importance of its key competencies – sensors & information and countermeasures & energetics – in modern warfare.
The favourable market position in borne out in full-year numbers, with a 28 per cent hike in order intake with “strong performance in both sectors despite a challenging macro-economic environment”. In the Sensors & Information segment, the group’s Roke business, formerly Siemens’ UK defence electronics unit, passed £100m in revenue for the first time and registered a 59 per cent rise in order intake to £168m, “driven by a growing number of multi-year contracts”. Countermeasures & Energetics also benefitted from a marked improvement in order intake, all of which means that around 86 per cent of expected FY 2023 group revenue is covered by the order book.
An already solid balance sheet has been bolstered by a cash conversion rate of 109 per cent, facilitating further debt reduction which leaves net debt standing at a negligible 0.1 times cash profits.
Chemring has been faced by operational and financial challenges during the period, some of which relate to the now familiar supply chain and inflationary pressures, although there was significant investment in capital projects. So, it’s unsurprising that the operating margin was broadly flat at 14.5 per cent.
Management notes that last year’s Integrated Review of Security, Defence, Development and Foreign Policy in the UK highlighted how “science and technology is central” to national defence and security policy, but it also sums up the investment rationale where the group is concerned. Trading at a 21 per cent discount to the consensus target, the shares are still worth tucking away for the long run. Buy. Last IC View: Buy, 3,390p, 08 Jun 2022. (Source: Investors Chronicle)
12 Dec 22. MilDef announces delivery delays in the fourth quarter. As previously communicated, there are timing issues in the supply chain, mainly of semiconductor components, for MilDef’s hardware portfolio. In the fourth quarter, approximately SEK 60-70m of the order book with delivery planned for the current quarter is expected to be moved to Q1 and Q2 2023. No business will be lost, but revenue and profit will be negatively impacted in the fourth quarter and positively impacted in the first half of 2023. A couple of large deliveries will be rescheduled to Q1 and Q2 2023 due to component shortages. This has an impact of SEK 60-70m on revenue for the quarter, of which approximately 50 percent each will be allocated to the first and second quarters of 2023. The company will add this revenue on top of the previously communicated revenue target of 25 percent growth per year.
“It is never fun to be forced to delay deliveries to our customers”, says Björn Karlsson, CEO MilDef Group. “At the same time, it’s important to understand that these contracts add to the 2023 revenue stream. We have analyzed the delivery issues in 2021-2022 and activated measures with the aim of minimizing this type of disruption next year,” concludes Björn.
12 Dec 22. Denel Integrated Systems Solutions poised for growth. Denel Integrated Systems Solutions (DISS) will be one of four divisions in the restructured Denel Group and aims to grow substantially as it seeks commercial and defence business locally and abroad, as well as continuing to deliver on important projects including the SA Army ground-based air defence system (GBADS).
Dr Dawie Roos, Executive Manager: DISS told defenceWeb the division’s current focus is upgrading GBADS as it is the design authority and prime contractor for the project.
Phase one included integrating the Starstreak very short-range air defence (VSHORAD) missile into the system which entered service in 2014. Phase two added the Skyshield new generation gun fire control system for the 35 mm Mk 5 Oerlikon guns, as well as upgrading the Mk 5 guns to the new 35 mm Mk 7 air defence gun system configuration. This provides for the AHEAD ammunition capability (the AHEAD shell is a pre-programmed projectile – velocity is measured as it moves through the final part of the barrel and accordingly, a time to detonate is computed to intercept distance and disperse a cloud of tungsten sub-projectiles for improved target destruction). This phase was completed in 2020 and DISS is now supporting it for the user – the Air Defence Formation headquartered in Kimberley.
At present, DISS is responsible for next level integration, including a new generation command and control capability covering radars and radios (new generation radios acquired under Project Radiate). The current phase will conclude around mid-2023. Although designed for and able to use the Umkhonto surface-to-air missile, this has not yet been acquired by the SA National Defence Force (SANDF).
DISS highlights its air defence system integration capabilities to foreign clients and can integrate legacy equipment with modern air defence systems. Roos indicated DISS is in discussions with several foreign countries in this regard.
Apart from GBADS, another notable SANDF contract for DISS was Project Achilles, which equipped the SA Air Force (SAAF) Joint Air Reconnaissance Intelligence Centre (JARIC) with image and video interpretation and exploitation tools. This was completed two years ago, on time and on budget, to the satisfaction of the client.
DISS was established in 2016 and was part of Denel Dynamics before becoming independent. Under the new Denel structure, it will be one of four separate divisions in the Group, which will comprise Land, Air, Guided Weapons and Integrated Systems Solutions.
“For us that’s a positive development. We are moving into a Level 5 system engineering role with the mandate to do multi-disciplinary system level integration,” Roos explained.
“It’s a major achievement and step forward for Denel.”
Although relatively small at present, DISS plans to grow significantly. Part of its growth strategy is targeting the commercial sector and it is currently in discussions with Transnet, Prasa and Eskom.
As one example, DISS is talking to Transnet about helping to address security problems. These growth areas will tap into existing DISS knowledge and experience in integrated command and control plus communication systems. Applying DISS experience in systems engineering, systems integration and logistics support, clients will receive innovative, custom designed solutions with through life cycle support, the company says. (Source: https://www.defenceweb.co.za/)
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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.
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