Sponsored by SPX CommTech (TCI & ECS)
www.tcibr.com
www.enterprisecontrol.co.uk
————————————————————————-
12 Sep 23. Chemring Group PLC (“Chemring” or “the Group”) today issues a scheduled trading update for the period to 31 August 2023.
Current trading and outlook
Trading in the period has progressed as planned, with continued strong order intake a notable highlight. This provides excellent visibility out to FY25. Expected FY23 revenue is now fully covered by the order book and the outturn for the year ending 31 October 2023 remains in line with the Board’s and current analyst expectations*. Achieving full year expectations is subject to US Department of Defense (“US DoD”) approval of certain countermeasure deliveries, representing c.£25m of revenue, that have already been manufactured and will be recognised once approval is received. The US DoD is expected to grant approval subject to determination of the quality of raw material provided by a third-party supplier that is outside of the control of the Group. The Group is supporting all parties in resolving this matter.
The Group has received a number of significant orders during the period, detailed below. As at 31 August 2023, order intake for the year to date was £536m (31 August 2022: £365m) and the order book was £829m (31 August 2022: £575m). Encouragingly, order cover for FY24 is building, with Countermeasures & Energetics having 81% order cover of expected revenue and the shorter cycle Sensors & Information sector having 54% cover.
Contract awards – Sensors & Information
Roke
In the Sensors & Information sector our specialist consulting and technology business, Roke, has received a significant award valued at £40m to deliver the next two years of Project ZODIAC for the UK Ministry of Defence (“UK MOD”). ZODIAC is the backbone of the British Army’s Land ISTAR Programme, and will deliver an integrated intelligence, surveillance, target acquisition, and reconnaissance (“ISTAR”) system, which will transform how the Army undertakes data-led decision making in the Land environment to gain operational advantage.
ZODIAC will provide an integrated and distributed system of applications and underlying system architecture that will enable the Army to understand, decide and act with greater precision and speed and digitally integrate with key allied partners. Roke will act as the Prime Systems Integrator on this advanced technology programme supported by a supply chain of some of the world’s leading technology companies. The Group expects to see deliveries under this contract commence late in FY23 with the majority delivered in FY24 and early FY25.
Activity at Roke has remained extremely buoyant with order intake in the year to date at £165m (31 August 2022: £124m) up 33%. As a result of this strong order intake we expect Roke to achieve another record year in FY23, with revenue exceeding £160m.
US Sensors
Having successfully completed a Low Rate Initial Production (“LRIP”) Production Readiness Review and a supporting Manufacturing Readiness Review in May, our US Sensors business has been informed that the Milestone C procurement decision in respect of the Joint Biological Tactical Detection System (“JBTDS”) program has been approved.
A LRIP contract, valued at $15m, was received in September 2023. Hardware deliveries under this contract will be made over the next 10 to 14 months, with a Full Rate Production contract expected to be awarded thereafter.
Contract awards – Countermeasures & Energetics
Energetics
In Energetics we continue to see increased levels of activity and demand in the propellants and energetic materials markets as customers re‐evaluate their operational usage and stockpile requirements associated with traditional defence capabilities.
Our Norwegian business, Chemring Nobel, continues to work with a number of its customers, including Northrop Grumman, Diehl Defence, Rheinmetall, and Nammo, on establishing long-term supply agreements. Chemring Nobel now has a record order book, providing significant visibility over the medium term.
In the US, our Chicago business has received multiple orders in the period including two contracts totalling $23m to supply critical components to Lockheed Martin, and a $11m order to supply key parts on the United Launch Alliance (“ULA”) Vulcan launch system including flight-critical initiators, thrusters and cartridges. Our Chicago business now has a record order book which is in excess of $100m.
Our three niche Energetics businesses, which design and manufacture high precision engineered devices and specialist materials, continue to see strong customer demand with order intake up 122% to £211m (31 August 2022: £95m). This strong performance demonstrates the value that our customers place on Chemring’s niche products and reinforces our decision to invest in expanding capacity at our Energetics sites.
Countermeasures
In Countermeasures we have continued to see sustained customer demand from across our portfolio, maintaining our position as the world leader in the design, development and manufacture of advanced expendable countermeasures. In the year to date the Group’s Countermeasures businesses received orders totalling £141m (31 August 2022: £121m) and in the period since 30 April 2023 we received the following notable awards: $17m for the delivery of MJU-75 flares from our fully automated manufacturing facility in Tennessee in support of the US DoD, and £24m for the delivery of a range of countermeasure products in support of the UK MOD from our facility near Salisbury.
Full year results date
As previously announced, the results for the year ending 31 October 2023 will be released on 12 December 2023.
Michael Ord, Chemring Group Chief Executive, commented: “These significant order wins are illustrative of our leading technological offering and the heightened customer demand that we are seeing in response to increased global uncertainty. The growth in order intake across both sectors demonstrates customer confidence in Chemring to develop and supply highly effective solutions, builds our order cover for FY24, and positions the Group well for the future.”
12 Sep 23. Prolifics, a global digital engineering leader, announced its successful acquisition of Enable Consulting, an IT consultancy specializing in enriching the Salesforce platform for its clients.
Enable Consulting, headquartered in Philadelphia, Pennsylvania region, excels in implementing, configuring, and tailoring streamlined, dynamic, and fully integrated Salesforce platform including sales, service, marketing, customer experience, data and analytics to meet the unique needs of its clients. As a recognized Salesforce Partner, Enable has demonstrated proficiency in delivering customized solutions, project implementations, and integrations.
This acquisition aligns with Prolifics’ commitment to partnering with their clients and innovating customer-centric solutions. Enable’s specialized Salesforce knowledge will empower Prolifics to accelerate and expand its current offerings in Salesforce engineering, incorporating end-to-end and hybrid cloud platforms, seamless third-party app integrations, AI-powered analytics, and in-house testing accelerators while collectively ensuring the highest levels of quality, reliability, and functionality.
Commenting on the acquisition, Prolifics CEO Satya Bolli stated, “This strategic move underscores our dedication to advancing customer-oriented growth. By uniting the strengths of Prolifics and Enable Consulting, we are poised to serve our Salesforce clients more effectively than ever before. With Salesforce’s continuous evolution, our clients seek innovative ways to leverage its capabilities, and this acquisition bolsters our ability to assist them every step of the way.”
Enable Consulting CEO and Managing Partner Joe Cellucci added, “Enable’s mission was to find a strategic partner to match in growth, capability and – most importantly – cultural alignment. And that’s what we found with Prolifics. We’re not just another Salesforce implementation partner. We engineer transformative solutions where Salesforce is the cornerstone of those 360-degree platforms that most organizations aspire to create. We focus on optimizing Salesforce for enterprise-level impact.”
About Prolifics
At Prolifics, we deliver outcomes that matter, whether it’s literally keeping the lights on for thousands of families, improving access to medical care, or helping prevent worldwide financial fraud. We’re digital engineers providing technology services and consulting across the full digital environment. Our expertise includes data strategy, integration and modernization, automation, AI and emerging technologies, and quality assurance and test automation. We use our systematic approach to rapid, enterprise-grade continuous innovation to treat our digital deliverables like a customized product – using agile practices to deliver immediate and ongoing increases in value.
About Enable Consulting
Enable Consulting offers end-to-end Salesforce expertise for an optimized customer journey. Our services are designed to unlock the full potential of Salesforce, resulting in streamlined, robust, and fully integrated solutions. We specialize in orchestrating digital transformations through various Salesforce capabilities, including Sales Cloud, Service Cloud, Community Cloud, Pardot, MuleSoft, Lightning Platform, Data Cloud and Industry Clouds, offering a comprehensive suite of solutions tailored to modern business needs. Enable Consulting is dedicated to elevating your Salesforce experience, enhancing efficiency, and unlocking new potential across every aspect. We have focused from our start on creating solutions with our client’s best interest as the focal point while enhancing their ability to be agile and continuously innovate.
For more information, please visit enableconsulting.com.
07 Sep 23. Advent launches break-up of UK aerospace jewel Ultra Electronics. Private equity group Advent International has fired the starting gun on its break-up of cutting-edge British aerospace group Ultra Electronics.
The US group has sold Ultra’s pioneering forensics division to a Texas-based group called Leads Online.
Advent swooped on Ultra, which was a FTSE 250 index member, in a £2.6 bn deal in June 2021.
But the takeover went through only last year following an in-depth investigation that scrutinised how the sale to a US firm would affect the UK’s national security.
Ultra was regarded as a strategically important company because its work includes making sonobuoys for hunting enemy submarines and technology used in F-35 fighter jets.
Advent had already come under fire for the rapid break-up of another British defence company, Cobham, which it pounced on in 2019 for £4 bn.
Ultra’s ballistic forensics business had previously been earmarked for sale by Advent as it was not regarded as a core part of the company.
Its world-class technology is used by police forces and crime agencies in 80 countries to solve gun-related crime by analysing bullets in detail and putting the information in databases. This enables users to connect ‘cold cases’ and link crimes that have been committed with the same gun. Leads Online, which provides data and intelligence tools to law enforcement agencies, did not say how much it paid for the forensics division.
The sale will fuel fears that Advent could further break up the company.
Despite pledging to be a ‘long-term investor’, Advent carved up Cobham, which pioneered air-to-air refuelling technology, within 18 months of acquiring it.
This is a typical business model for private equity firms, which was why many defence experts and MPs criticised the sale.
Lord West of Spithead, the former First Sea Lord, previously said Ultra’s sale to Advent could leave Britain at the mercy of Russia and China’s navies as submarine warfare is set to become the next ‘major theatre of war’.
Ultra traces its history to 1920, when it started as a small electronics factory in West London. (Source: Google/https://www.thisismoney.co.uk/)
07 Sep 23. Boeing CFO signals fresh losses in Q3 for contractor’s defense sector. Boeing Chief Financial Officer Brian West previously warned that it could take several years until the company’s struggling defense sector turns a profit.
Boeing’s defense business will log a loss in the third quarter of 2023, Chief Financial Officer Brian West said today.
The company’s defense sector margins “will be negative in the quarter and also similar to what they were last quarter,” West said during the Jefferies Industrials conference hosted in New York City. The aerospace titan recorded a $527 m loss for its defense business in the second quarter of 2023.
Losses for Boeing’s Defense, Space & Security sector have been a familiar story in recent quarters as the company strives to resolve issues on a string of programs. Boeing is experiencing “persistent supply chain and labor stability issues,” West said today, adding that the defense sector’s problems are largely concentrated in two main areas.
Approximately 25% of Boeing’s defense sector portfolio is struggling due to “a few legacy programs that we know how to make that we just got to get back on track. That’s proving to take longer,” West said. (He did not elaborate on what those particular problem programs are.)
An additional 15% is accounted for in Boeing’s fixed-price development contracts — programs like the KC-46A tanker, T-7A training jet, MQ-25 refueling drone, NASA Starliner and the Air Force One replacement VC-25B — that have collectively logged bns in losses, according to West. The KC-46A alone has topped an eye watering $7 bn in charges.
Those contracts have “new pressure,” West said without elaborating, adding that “we need to address it, account for it in our closing position. And we will.”
The remaining 60% of Boeing’s defense portfolio “are products that have strong demand, are performing well in the field and there’s good margin behind it,” West noted. However, he cautioned that the company needs to see progress in the next few quarters on its legacy programs and hit upcoming milestones for its fixed-price development efforts.
West, who has previously warned that the defense sector may not be profitable until the 2025-2026 timeframe, reiterated that guidance today, as well as the company’s expectation of hitting a free cash flow goal of $3-5bn by the end of 2023.
Still, the company will need to work through some woes on its commercial side as well: a recently-discovered issue with the company’s 737 MAX jet will require rework on about 75% of the 220 737s in Boeing’s inventory, West said, though he emphasized the company can still meet the “low end” of a previous projection of 400-450 737 deliveries this year. Boeing’s commercial business will be “negative” in the upcoming quarter, West said. Boeing will report its third quarter results in October.
(Source: Defense News Early Bird/Breaking Defense.com)
07 Sep 23. Acquisition Expands Anduril’s Suite of Autonomous Capabilities Into the Group 5 Autonomous Aircraft Space. Defense technology company Anduril Industries today announced its acquisition of Blue Force Technologies, a developer of autonomous aircraft with an integrated aerostructures division serving a wide range of defense and commercial customers. This transaction will expand Anduril’s existing autonomous fleet to now include large high performance, group 5 aircraft and significantly increases Anduril’s reach and impact within the Department of Defense. Terms of the deal were not disclosed.
Blue Force Technologies designs and manufactures high-end composite aircraft and their components at its factories in North Carolina. Blue Force Technologies has been developing Fury, a group 5 autonomous air vehicle with fighter-like performance since 2019. Fury leverages proprietary rapid prototyping, digital engineering and an open architecture that is designed to deliver next-generation flight performance with the flexibility to integrate heterogenous sensors and payloads to support air dominance missions. Recently, the company successfully completed a flight test of the flight software on board a VISTA, Variable Stability In-flight Simulator Test Aircraft, and a ground test for Fury’s novel carbon fiber composite propulsion flowpath system.
Anduril is making significant investments to continue the development of the Fury autonomous air vehicle, expand manufacturing operations in North Carolina and accelerate development of technologies critical to future capabilities such as autonomous collaborative platforms. As a nontraditional company that uses its own capital for research and development, Anduril moves fast to engineer, prototype, develop and produce new capabilities for the Department of Defense.
These new capabilities are critical to maintaining deterrence in an era of strategic competition. To project force, deter aggression, and regain affordable mass, the DoD will need to rely on large quantities of smaller, lower-cost, more autonomous systems. The U.S. Air Force, U.S. Navy and U.S. Marine Corps have all signaled their intention to modernize and adopt advanced autonomous capabilities. This ecosystem of autonomous systems must be powered by software that enables a single operator to control multiple assets to accomplish a wide range of missions.
This acquisition follows Anduril’s successful launch of Lattice for Mission Autonomy earlier this year, the artificial intelligence-enabled software platform that enables teams of autonomous systems to dynamically collaborate to achieve complex missions, under human supervision. By investing in both hardware and software capabilities, Anduril will further accelerate the development of autonomous operations like manned-unmanned teaming and other critical advanced autonomous solutions for warfighters around the world.
Anduril is a proven leader in developing and fielding integrated autonomous solutions across a wide variety of sensors, effectors and assets across domains. Anduril has experience automating the operations of hundreds of robotic systems deployed in tactical environments around the world. Its objective is to support Department of Defense and allied militaries services in fielding autonomous and artificially intelligent systems as fast as possible. (Source: ASD Network)
07 Sep 23. Sweden’s Saab snags Silicon Valley-based CrowdAI. Swedish defense company Saab AB acquired artificial intelligence firm CrowdAI, again expanding its footprint in the fast-growing sector. The deal’s closing was announced Sept. 7. No financial details were shared. Saab ranked No. 33 in the latest Defense News “Top 100″ analysis of the world’s largest defense companies, raking in $3.7bn in defense revenue in 2022.
Erik Smith, president of Saab in the U.S., in a statement said the takeover provides the company “a new capability as well as deeply rooted relationships with new customers.” It also underscores “our commitment to innovation and growth in the United States,” he added.
The Department of Defense last year selected CrowdAI to help aid AI adoption, under a contract worth up to $249m. The company was also tapped in 2019 during a “Shark Tank”-style event the Air Force hosted to quickly ink contracts.
As part of Saab, “the team we’ve built will open new doors for dual-use technological advancement that aligns with the DoD’s priorities,” Devaki Raj, the cofounder of CrowdAI, said in a statement. Its future work will mainly be carried out in San Diego, California.
Saab last month acquired BlueBear Systems, a British company that specializes in autonomy, avionics, and modeling and simulation. Terms were not disclosed at the time. BlueBear last year had a turnover of £8m, or $10m, Defense News reported. (Source: Defense New
07 Sep 23. SAIC Announces Second Quarter of Fiscal Year 2024 Results.
- Revenues of $1.78bn; 8.3% organic growth adjusted for impact of divestitures
- Net income of $247m; Adjusted EBITDA(1) of $174m or 9.8% as a % of revenues, an increase of 70 bps year-over-year
- Diluted earnings per share of $4.56; Adjusted diluted earnings per share(1) of $2.05
- Cash flows provided by operating activities of $150 m; Transaction-adjusted free cash flow(1) of $143m
- Company increases revenue, adjusted EBITDA margin(1), and adjusted diluted EPS(1) guidance for fiscal year 2024
Science Applications International Corporation (NYSE: SAIC), a premier Fortune 500® technology integrator driving our nation’s digital transformation across the defense, space, civilian, and intelligence markets, today announced results for the second quarter ended August 4, 2023.
“I am proud of the financial performance we delivered in the quarter with both strong organic revenue growth and margin expansion. We remain on track to achieve our three year financial targets and are off to a strong start,” said SAIC CEO Nazzic Keene. “Our focus remains on building and sustaining our high-performance culture to deliver value for our employees, customers, and shareholders.”
Second Quarter Summary Results
Revenues for the quarter decreased $47m or 3% compared to the same period in the prior year primarily due to the sale of the logistics and supply chain management business (Supply Chain Business) ($149m), the deconsolidation of the Forfeiture Support Associates J.V. (FSA) ($34m), and contract completions, partially offset by ramp up on existing and new contracts. Adjusting for the impact of the divestiture of the Supply Chain Business and the deconsolidation of FSA, revenues grew 8.3%.
Operating income as a percentage of revenues increased from the comparable prior year period primarily due to the gain recognized from the sale of the Supply Chain Business, improved profitability across our contract portfolio, and lower indirect costs.
Adjusted EBITDA(1) as a percentage of revenues for the quarter increased to 9.8% from 9.1% for the same period in the prior year primarily due to improved profitability across our contract portfolio and lower indirect costs.
Diluted earnings per share for the quarter was $4.56 compared to $1.30 in the prior year quarter. Adjusted diluted earnings per share(1) for the quarter was $2.05 compared to $1.75 in the prior year quarter. The weighted-average diluted shares outstanding during the quarter decreased to 53.9m from 55.9m during the prior year quarter.
Cash Generation and Capital Deployment
Cash flows provided by operating activities for the second quarter increased $9m compared to the prior year quarter, primarily due to the timing of payroll payments, partially offset by higher cash provided by the MARPA Facility in the prior year and higher tax payments in the current year.
During the quarter, SAIC deployed $126m of capital, consisting of $100 m of plan share repurchases, $20m in cash dividends, and $6 m of capital expenditures.
Sale of Logistics and Supply Chain Management Business
On May 6, 2023, SAIC closed the sale of its logistics and supply chain management business to ASRC Federal Holding Company, LLC for $356m in cash, including $355m received at closing and a post-closing adjustment for working capital. The divestiture is consistent with SAIC’s broader strategy to focus on Growth & Technology Accelerants and on innovative, platform-agnostic solutions that add shareholder value. SAIC recorded a preliminary pre-tax gain of $233m, net of $7m of transaction costs, which is included within other operating income on the condensed and consolidated statements of income.
Quarterly Dividend Declared
On September 6, 2023, the Company’s Board of Directors declared a cash dividend of $0.37 per share of the Company’s common stock payable on October 27, 2023 to stockholders of record on October 13, 2023. SAIC intends to continue paying dividends on a quarterly basis, although the declaration of any future dividends will be determined by the Board of Directors each quarter and will depend on earnings, financial condition, capital requirements and other factors.
(1)Non-GAAP measure, see Schedule 5 for information about this measure.
Backlog and Contract Awards
Net bookings for the quarter were approximately $0.7 bn, which reflects a book-to-bill ratio of 0.4 and a trailing twelve months book-to-bill ratio of 0.8. SAIC’s estimated backlog at the end of the quarter was approximately $22.5bn. Of the total backlog amount, approximately $3.7 bn was funded.
Notable New Business Awards:
U.S. Department of Treasury: SAIC was awarded a $1.3bn seven-year single-award indefinite delivery, indefinite quantity (IDIQ) contract by the Department of the Treasury to provide T-Cloud, a complete range of cloud and professional services. The T-Cloud contract supports Treasury’s adoption and transformation of a multi-cloud environment by centralizing management of the systems infrastructure, platform and software-as-a-service by a single broker. SAIC is responsible for delivering a shared service cloud infrastructure model that provides enterprise-wide efficiencies in access, contracting and security. SAIC will also provide services for business operations, technical, security, network, service desk, subject matter expert support and transition services. Net bookings and backlog for the quarter do not include any value related to T-Cloud. Consistent with the Company’s policy, bookings and backlog related to this award will be recognized as the task orders under the IDIQ are received.
Notable Recompete Awards:
Naval Air Warfare Center Weapons Division: SAIC was awarded a multiple-award IDIQ contract with a $249m ceiling from the U.S. Navy to continue supporting the Naval Air Warfare Center Weapons Division (NAWCWD)’s combat instrumentation platforms used for training and test evaluation ranges. Under the new contract, SAIC will perform systems design and integration, hardware and software upgrades or modifications for the Combat Environment Instrumentation Systems (CEIS). SAIC will also provide services to support global position system-based range equipment, airborne electronic warfare (EW) systems, warning & countermeasures systems and range Radio-Frequency/Electro-Optical Tracking systems. The Company will deliver test support and instrumentation for unmanned aerial vehicle (UAV) and telemetry systems.
Notable Space and Intelligence Community Awards:
U.S. Space and Intelligence Community: During the quarter, SAIC was awarded approximately $520m of contract awards by space and intelligence community organizations. These awards represent a combination of new business and recompetes.
SAIC was awarded the following contracts subsequent to the end of the quarter which are not included in the current quarter net bookings and book-to-bill:
U.S. Space Force: SAIC was awarded a seven-year, $575m contract by the United States Space Force to support its Ground Based Radar Maintenance and Sustainment Services (GMASS). Under the contract, SAIC will provide on-going sustainment and modification of the GMASS Contract-covered systems, including Upgraded Early Warning Radars (UEWR), the Precision Acquisition Vehicle Entry (PAVE) Phased Array Warning System (PAWS), and the Perimeter Acquisition Radar Attack Characterization System (PARCS) radars and all associated systems and equipment. In addition to sustaining operational capabilities, the contract will also utilize an integrated roadmap to highlight incremental opportunities and areas for innovation to promote backlog items and improve operational efficiencies. Through this work, SAIC will help further modernize critical missile warning and space domain awareness radars for key Space Force missions. (Source: BUSINESS WIRE)
————————————————————————-
SPX CommTech, part of SPX Technologies Inc, innovates specialised technologies within the Radio Frequency (RF) spectrum to ensure a smarter, more secure future for all. Formed by TCI and ECS, SPX CommTech’s Battlespace portfolio enables defence and security teams to detect, defeat and exploit RF signals to enhance communications intelligence (COMINT) and counter unmanned aerial systems (Counter-UAS). Additionally, its Tactical Data Link portfolio allows intelligence gathering agencies, special forces, emergency response, and security teams to securely and reliably transfer video and data between enabled-aircraft and ground teams over long distances for airborne Intelligence, Surveillance, Reconnaissance (ISR). For more information visit www.tcibr.com and www.enterprisecontrol.co.uk
————————————————————————-