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01 Apr 24. The chief of Germany’s largest military contractor Rheinmetall has urged European countries to ditch their preference for national champions and build bigger, more specialised defence groups to compete with US rivals. Armin Papperger also said in an interview that if Europe wanted closer defence collaboration, countries needed to specialise in different types of military technology. “It does not make a lot of sense if we, say, pick the second- or third-best technology because one nation wants that” for nationalistic reasons, he told the Financial Times. “That is the most difficult discussion they are having at government level.” “We need big companies in Europe,” added the 61-year-old Bavarian. Efforts by EU leaders to beef up defence co-operation have been stymied by the industry’s fragmentation. European arms companies compete against each other, military budgets are controlled at national level and individual countries are keen to maintain control of strategic supply chains, plants, jobs and technological edge. One example of successful cross-border co-operation is Europe’s biggest missile maker MBDA, which is owned by the UK’s BAE Systems and European aeronautics group Airbus, which each hold a 37.5 per cent stake, with the balance held by Leonardo of Italy. Europe’s rush to re-mobilise its armies has been a boon to companies such as Rheinmetall, which also makes infantry fighting vehicles, combat drones and the smoothbore gun that sits on the Leopard 2 tank. The Düsseldorf-based company founded in 1889 did business with Russia until the German government withdrew its export licence in 2014 following the Kremlin’s annexation of the Ukrainian peninsula of Crimea. Since Russia’s full-scale invasion of Ukraine in 2022, Rheinmetall’s share price has surged more than fivefold and the company expects to have a backlog of orders from Nato members and its allies worth €60bn by the end of 2024. Papperger last month sold shares worth almost €5m — just over 6 per cent of his total holdings in the company. Rheinmetall has revived its ambitions to further consolidate the region’s sprawling defence industry.
Last year, the company completed the €1.2bn takeover of its Spanish rival Expal, which cemented its leading position in the munitions supply chain. On March 18, it agreed to buy Reeq, a Dutch maker of unmanned ground vehicles used for combat, for an undisclosed sum. A loud and controversy-prone figure in an industry that typically operates under the radar, Papperger, who also called for the EU to consider an equivalent to Israel’s Iron Dome defence system, is bullish on Germany’s military reawakening, or “Zeitenwende” as Chancellor Olaf Scholz has called the country’s epochal shift since Russia’s war on Ukraine. A text message from defence minister Boris Pistorius was now enough for Rheinmetall to decide to increase production, Papperger told German newspaper Der Spiegel earlier this year. While other German defence contractors have complained about the lack of concrete orders from Berlin, Papperger said Rheinmetall had been able to boost capacity quickly — the company will next year produce 700,000 rounds of artillery shells compared with 70,000 a year before in 2022 — thanks to investments in new production lines before war returned to Europe. “I always thought that life is dangerous and that the world is dangerous,” said Papperger, who has been with Rheinmetall since 1990. “That’s why we invested early,” he added, pointing to investments in Hungary, Australia and the UK. Recommended EU defence Is Europe battle-ready? Localising and growing production capacity in many countries was important for future orders, he added. “You have to give something back to the countries . . . this is what I discuss at the moment with prime ministers.” If Donald Trump became US president again, “the pressure will be higher” on Germany, said Papperger, but the race to rebuild the country’s military strength would continue regardless of who ended up in the White House. “The US focuses more on the Asia-Pacific area than on Europe,” he said. Were the “very risky situation” in the region to spark a full-blown armed conflict, “the US will focus on Asia, and then Europe will be totally alone”. In recent decades, European leaders had taken it for granted that the US would come to the continent’s rescue in case of a military threat but “that will no longer happen”, Papperger said. The US — where Republican lawmakers have blocked military aid to Ukraine — had sent a “very clear message”, which was “we do no longer pay for you”. But US defence capabilities faced their own challenges, with Papperger singling out growing political polarisation. “A big task for the next US president will be to bring the two parties more together. It’s bad if the biggest economy in the world — and the biggest defence power — is a split nation.” (Source: FT.com)
02 Apr 24. Hanwha Group launches bid for Austal. South Korean industrial powerhouse, Hanwha Group has officially submitted an indicative offer to acquire West Australia-based naval and commercial shipbuilder Austal and its global business.
Importantly, the deal would only proceed subject to the appropriate due diligence and Foreign Investment Review Board (FIRB) approvals empowering Austal to leverage the experience, skills and business opportunities associated with being linked to a global business like Hanwha Group.
David Kim, Executive Vice President at Hanwha stressed that the company is respectful of the FIRB regulatory approval process, but is confident in its ability to obtain FIRB approval for the transaction, saying, “There is no foundation of the claim that the Foreign Investment Review Board (FIRB) would reject Hanwha’s acquisition of the company.
The South Korean powerhouse already has a sizeable presence in Australia and would bring a range of advantages to the shipbuilder, while Hanwha believes that the rationale and proposal presented to be “highly competitive” and in line with the Australian Government’s broader strategy to develop Australia’s defence industrial base and supporting workforce.
These factors include:
- Enhancing and strengthening the Australia-South Korea alliance: Hanwha is a known entity and respected ally to both Australia and US defence leaders with a strategic presence in the Indo-Pacific. Hanwha’s acquisition of Austal would build upon the countries’ alliances and support Australia’s national security as a partner and ally, building upon a series of relationships between key defence and security partners.
- Supporting government priorities: The deal is aligned with Australian government objectives outlined in the Independent Analysis of Navy’s Surface Combatant Fleet, where Hanwha’s capabilities and investment would accelerate delivery of critical programs and allow Australia to keep sovereign shipbuilding capabilities in Henderson, WA.
- Austal Value: Hanwha has more than 50 years of experience in shipbuilding, which would expand Austal’s growth potential and accelerate innovation (e.g. steel shipbuilding, production automation, Smart Shipyards, autonomous technology) while unlocking Austal value with increased investment and efficiencies.
- Building long-term partnerships: Hanwha is a long-term partner with the intent to invest in the business along with the workforce and communities it supports, while bringing stability to the company with long-term partnership at the forefront of decision making. With a focus on local jobs, community partnerships and economic development, Hanwha is an ideal partner for stable long-term growth compared to other ownership models.
“Hanwha has already obtained FIRB approval for prior investments in Australia and has a proven track record of investment in Australia’s defence industrial base, being the contracted supplier of infantry fighting vehicles, self-propelled howitzers and ammunition resupply vehicles with significant investment in a Geelong manufacturing facility that employs local workers,” Mr Kim explained.
Hanwha believes an Austal acquisition would benefit numerous stakeholders, including governments, shareholders, employees, and communities and is planning to go through all the proper processes towards a successful sale.
(Source: Defence Connect)
02 Apr 24. Hanwha a ‘credible buyer’ for shipbuilder Austal. South Korea’s Hanwha Group says it is a “credible buyer” and has made a “highly competitive” offer for Austal despite the ASX-listed naval shipbuilder rejecting a $1 billion takeover proposal from the defence and aerospace conglomerate.
Austal told investors it had declined to give Hanwha access to non-public information for due diligence because it was “not satisfied” that the bid would secure the necessary approvals from defence agencies in Australia and the United States.
Hanwha acquired control of Daewoo Shipbuilding and Marine Engineering this year. Getty
The Australian Financial Review’s Street Talk column first revealed Hanwha’s interest in Austal in July. Austal operates five shipyards in the US, Australia, the Philippines and Vietnam. JPMorgan and Poynton Stavrianou are working for Austal.
“There is no foundation of the claim that the Foreign Investment Review Board would reject Hanwha’s acquisition,” David Kim, Hanwha’s executive vice president, said on Tuesday. “Hanwha has already obtained FIRB approval for prior investments in Australia and has a proven track record of investment in Australia’s defence industrial base.”
Hanwha would also require approval from defence agencies in Australia and the US.
Street Talk has previously reported that New York’s JF Lehman & Company, which specialises in investing in complex and regulated sectors, has also been interested in Austal, as has Cerberus Capital Management, a $US60bn ($88bn) alternative asset investor. Former treasurer Joe Hockey’s Bondi Partners has also previously expressed interest in putting together a consortium of investors to take Austal private.
Despite the rejection of Hanwha’s offer, Austal shares rose more than 10 per cent on Tuesday and were trading 23¢ higher in the afternoon at $2.43.
Austal a ‘known entity’
Hanwha’s bid for Austal comes as the company aggressively expands into shipbuilding. Last year it acquired a controlling interest in Daewoo Shipbuilding & Marine Engineering, one of South Korea’s three major shipbuilders, for $US1.49bn. Daewoo Shipbuilding subsequently changed its name to Hanwha Ocean.
In a statement, Hanwha said it had made the takeover offer for Austal because it was a “known entity” and the acquisition would “build upon the countries’ alliances and support Australia’s national security as a partner and ally”.
“Hanwha believes an Austal acquisition would benefit numerous stakeholders, including governments, shareholders, employees and communities and is planning to go through all the proper processes towards a successful sale,” it said.
Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute, said he did not think Hanwha’s purchase of Austal would present a national security risk.
“Obviously, there will be some concerns about an Australian company being taken over by a foreign national, that’s understandable. But Hanwha is probably able to ensure Austal’s future,” Dr Davis said. “South Korea is not a hostile power, it’s a friendly partner, which we’re working with ever more closely.”
But Austal said it rejected the bid after assessing “the potential for shareholder value creation, competition concerns and a potential purchaser’s ability to ultimately complete a transaction (which would include necessary government approvals).”
“This latter consideration is particularly relevant in relation to the proposal from Hanwha, given Austal’s position as the designer and builder of defence vessels for the Australian and US navies and ownership clauses associated with defence contracts,” it told investors on Tuesday, adding some contracts required “a commitment to ensuring continuous naval shipbuilding in Australia”.
In December, Austal won a near $1.3bn contract to design and build three medical ships for the US Navy, taking its order book to more than $11 billion. It is also expected to benefit from a large pool of work that will be available as part of the AUKUS defence pact between Australia, the US and the United Kingdom.
The Australian National University’s Jennifer Parker, a former naval warfare officer, said it would be “detrimental to Australia to have a complete foreign takeover of our major shipbuilding company”. “But Hanwha is interesting in terms of the ability of the Koreans to very quickly build up one of the biggest shipbuilding industries in the world,” she said.
“It would be unlikely for the government to support a complete takeover of Austal because of that commentary in the last six months, and it probably wouldn’t be in our interest, but some sort of relationship between the two would be really interesting.”
Andrew and Nicola Forrest own 19.6 per cent of the stock through their private Tattarang investment vehicle and have installed former Australian rear admiral Lee Goddard, the chief executive of the Australian Missile Corporation, as their representative on the Austal board. Dr Forrest declined to comment. (Source: Google/https://www.afr.com/)
01 Apr 24. Cyberlux Corporation (OTC: CYBL) Releases 2023 Annual Report of Financial and Operational Results.
The Company reports the results for its Unmanned Aircraft Solutions, Datron Military Communications, and Special Activities Business Units
Cyberlux Corporation (OTC: CYBL), a leading provider of innovative defense technology systems, announced that the Company achieved a record Cash Flow quarter for the period ended December 31, 2023.
Cyberlux Corporation CEO Mark Schmidt commented on the results: “2023 proved to be a noteworthy year with the strategic restructuring of all Cyberlux business units. The reorganization sharpened our focus on core Department of Defense (DoD) activities and capitalized our strengths in Unmanned Aircraft Technology (UAS) and military communications. This initiative aimed to streamline operations and enhance the company’s ability to deliver high-quality products and services to our customers. As a direct result of this strategic realignment, the company achieved immediate success by adding a combined +$105m in booked revenue, with +$80m in UAS, +$20m in Datron Military Communications (DMC), and +$5m in Special Activities (SA). Cyberlux has positioned itself for sustained growth and continued leadership in the defense industry for 2024 and beyond.”
Financial highlights for 2023:
- Completed the acquisition of Datron system which provided a provider of communications solutions to government, militaries, and industrial users globally. Datron has a long history of product development and manufacturing quality products and has the infrastructure to support such activities.
- Secured a $79m contract with US DoD to supply Cyberlux K8 Unmanned Aircraft Systems. Cyberlux received $39m up front cash upon signing the contract, shipped $15m of product during 2023, and are still holding $23m in advance payments at December 31, 2023.
- Divested three foreign subsidiaries, which will significantly simplify Cyberlux’s business operations, financial statement, and income tax reporting. The company reported the operations of these subsidiaries as a discontinued operation in the 2023 and 2022 financial statements.
- Improved financial and accounting capabilities with the hiring of a Fractional CFO, an outsourced accounting and tax firm and the systems/capabilities of the Datron team.
- Finished the 2023 year with $3m of cash.
- Undertook the reconciliation of equity and debt transactions from the company books to the transfer agent records. Cyberlux is in the process of having share certificates issued by its transfer agent to match the shareholder agreements, as required.
- Completed reconciliations of Cyberlux’s prior accounts, which resulted in a restatement of the 2022 revenue to $5m.
Amidst a transformative year in 2023, the company has boldly refocused its operations, strategically divested certain assets, secured a substantial sales order from the DoD and welcomed the acquisition of Datron World Communications. With the advice and counsel of EisnerAmper, the company was able to exercise advantageous tax treatments. Cyberlux stands resolute in its commitment to growth and sustainability. Management remains steadfast in their confidence that the performance in 2023 lays a solid foundation for continued success well into the future. (Source: BUSINESS WIRE)
01 Apr 24. Sypris Reports Fourth Quarter Results.
Sypris Solutions, Inc. (Nasdaq/GM: SYPR) today reported financial results for its fourth quarter and full-year ended December 31, 2023.
HIGHLIGHTS
- Consolidated revenue for the quarter increased 16.9% and 23.7% for the full year driven by double digit expansion of shipments across both segments.
- Revenue for Sypris Electronics increased 25.2% and 42.7% for the quarter and full year, respectively, reflecting the continued growth in demand from customers serving the markets for Electronic Warfare, Aircraft and Missile Avionics, and Subsea Communications.
- Revenue for Sypris Technologies increased 10.8% and 12.5% for the quarter and full year, respectively, resulting from increased demand from customers serving the Commercial Vehicle, Specialty Automotive and Energy markets.
- During the quarter, Sypris Electronics announced that it had received two multim-dollar follow-on contract awards from a U.S. global defense contractor for the full-rate production of advanced integrated electronic warfare and communications avionics system modules for one of the largest Government DoD programs. Sypris also received releases for the first year of production with shipments scheduled to continue into mid-year 2025.
- Sypris Electronics also announced a follow-on award from a U.S. DoD prime contractor for a secure communications infrastructure program. Sypris will produce and test the embedded circuit card assemblies that will perform certain cryptographic functions for the Army Key Management System. Production is expected to begin in 2024.
- Subsequent to quarter end, Sypris Technologies received an award to supply specialty high-pressure closures for use in a large international liquified natural gas project. The closures will be integrated into the filtration systems of the carbon capture and storage facilities of the project. Production is expected to be completed during 2024.
- The outlook for 2024 remains positive, with revenue now expected to increase 10-15% year-over-year, reflecting the continued momentum of new contract awards and strong backlog across many of the Company’s markets. We expect gross profit to increase 20-25% for 2024, while gross margin is forecast to expand 150-175 basis points on a year-over-year basis.
“We continued to expand across all segments of our business during the fourth quarter. Material shortages and the disruptions associated with new program launches are abating, and our focus is clearly on meeting the growing demand of our customers,” commented Jeffrey T. Gill, President and Chief Executive Officer.
“The backlog in excess of $110m for Sypris Electronics is expected to support revenue growth through 2024 and beyond. Customer funding has already been secured for a portion of these key programs, which enables us to procure inventory under multi-year purchase orders to mitigate future supply chain issues.
“Overall demand from customers serving the automotive, commercial vehicle, sport utility and off-highway markets has remained solid. We continue to invest in new equipment, maintain or upgrade existing assets, and drive continuous improvement initiatives to add capacity and support more cost-efficient operations in the future.
“Orders for our energy products remain positive, with open quotes outstanding on several large projects. Additional opportunities for growth may exist with new projects globally in support of increasing LNG demand. We are also actively pursuing applications for our products in adjacent markets to further diversify our industry and customer portfolios.”
Fourth Quarter and Full-Year Results
The Company reported revenue of $34.7m for the fourth quarter ended December 31, 2023, compared to $29.7m for the prior-year comparable period. The Company incurred a net loss of $1.1m, or $0.05 per diluted share, compared to net income of $0.1m, or $0.01 per diluted share, for the prior-year period.
For the full-year 2023, the Company reported revenue of $136.2m compared with $110.1m for the prior year. The Company reported a net loss of $1.6m, or $0.07 per share, for 2023 compared with a net loss of $2.5m, or $0.11 per diluted share, for the prior year.
Sypris Technologies
Revenue for Sypris Technologies increased to $19.0m in the fourth quarter of 2023, compared to $17.2 m for the prior-year period, due to steel price increase pass-throughs. Gross profit for the fourth quarter of 2023 was $3.1m, or 16.3% of revenue, compared to $2.2 m, or 12.9% of revenue, for the same period in 2022. Gross profit for the fourth quarter of 2023 was favorably impacted by a customer payment for negative material surcharges and foreign exchange impacts on its contract with Sypris Technologies, offset by production inefficiencies driven by volatile customer demand schedules.
Sypris Electronics
Revenue for Sypris Electronics increased to $15.7m in the fourth quarter of 2023 compared to $12.5m for the prior-year period. Gross profit for the fourth quarter of 2023 was $1.3m, or 8.1% of revenue, compared to $2.4m, or 18.9% of revenue, for the same period in 2022. Gross profit and gross margin for 2023 were negatively impacted by ramp-up costs on two major programs.
Outlook
Commenting on the future, Mr. Gill added, “While challenging supply chain conditions and new program launches impacted our 2023 results, demand from customers serving the automotive, commercial vehicle and sport utility markets remains positive. Similarly, demand from customers in the defense and communications sector continues to be robust, while the outlook for the energy market continues to move in the right direction.
“Our healthy backlog, new program wins, and long-term contract extensions are expected to support continued revenue and earnings growth during 2024. We now expect revenue to increase 10-15% year-over-year as a result of the combined strength of our backlog for Sypris Electronics and increasing orders for our energy products. We also continue to expect to achieve gross margin expansion in the range of 150 to 175 basis points with gross profit forecast to increase 20-25% in 2024.”
About Sypris Solutions
Sypris Solutions is a diversified manufacturing and engineering services company serving the defense, transportation, communications, and energy industries. For more information about Sypris Solutions, visit its Web site at www.sypris.com. (Source: BUSINESS WIRE)
01 Apr 24. Terran Orbital Reports Record 2023 Financial Results.
- Record 2023 revenue of $135.9m up 44% year-over-year
- Record 2023 gross profit of $8.6m improved $25.8 m over prior year
- Manufacturing 78 satellites for Lockheed Martin for Space Development Agency programs
- Signed over $2.7bn in new awards in 2023 representing more than 360 satellites
- Introduced seven new standard bus designs, spanning multiple size classes of satellites
- Launched new Responsive Space Initiative to deliver standard buses in 30 days, with integrated payloads in 60 days
- Commissioned new 50 Tech facility and broke ground on Goodyear expansion facility
- $71.7 m cash balance as of December 31, 2023
Terran Orbital Corporation (NYSE: LLAP) (“Terran Orbital” or the “Company”), a leading manufacturer of satellite products primarily serving the aerospace and defense industries, today announced financial results and operational highlights for the three and twelve months ended December 31, 2023.
Full Year 2023 Financial Highlights
- Generated record revenue of $135.9m up 44% year-over-year
- Gross profit of $8.6 m compared to $17.3m loss in 2022
- Adjusted gross profit(1) of $19.4m compared to $2.2m loss in 2022
- Net loss of $151.8m improved from a net loss of $164.0 m in prior year
Marc Bell, Co-Founder, Chairman, and Chief Executive Officer of Terran Orbital said, “I am pleased to report our company’s strong results for 2023. Our revenue growth and gross margin improvement affirm the strength of our strategy and execution. The future of space is responsive, and Terran Orbital is well-positioned to capitalize on this growing market segment. We’re focused on sustainable growth, achieving profitability, and delivering solutions that meet evolving customer needs. Terran Orbital isn’t just keeping pace with disruption, we’re at the forefront, shaping the future of the space economy through responsive space.”
Results for the Fourth Quarter and Full Year 2023
Revenue for the fourth quarter of 2023 was $31.6m, compared to $31.9m for the same quarter in 2022, and $135.9m for the full year, up 44% over the prior year. The increase in annual revenue was primarily due to the continued and increased level of progress made in satisfying our customer contracts and reflects the ongoing favorable impact from significant contract wins and modifications in recent periods. Revenue for 2023 was negatively impacted by an estimated $6.1m of EAC adjustments on certain firm fixed price programs. EAC represents the total estimated cost-at-completion and is comprised of direct material, direct labor and manufacturing overhead applicable to a performance obligation.
Cost of sales for the quarter was $32.1m compared to $42.7m in the same period in the prior year, and $127.4m for the full year, compared to $111.5m for the prior year. The increase in cost of sales for the full year was primarily due to an increase of $25.8m in direct and indirect program costs and $2.5m in depreciation and amortization, partially offset by a decrease of $6.8m in share-based compensation expense, $3.9m loss reserve, and $2.1m in scrap and obsolete materials and services. Cost of sales for the full year included an estimated negative impact of $2.1m due to EAC adjustments on certain programs and non-recurring changes in estimates related to inventory.
Gross (loss) profit was $(0.5)m for the quarter, compared to $(10.8)m in the same period in the prior year, and $8.6m for the full year, compared to $(17.3)m for the prior year. Excluding share-based compensation and depreciation and amortization included in cost of sales, Adjusted Gross (Loss) Profit(1) was $2.2m for the quarter, compared to $(7.3)m for the same period in the prior year, and $19.4m for the full year, compared to $(2.2)m in the prior year. EAC adjustments negatively impacted gross profit and Adjusted Gross Profit by an estimated $4.0 m during 2023.
Selling, general, and administrative expenses were $27.2m for the quarter, compared to $27.6m for the same period in the prior year, and $117.5m for the full year, compared to $111.9m for prior year. The increase for the full year was primarily driven by increases in salaries and wages, research and development expenses, business development expenses, depreciation and amortization, and other operating costs, partially offset by a decrease in share-based compensation expense and accounting, legal, and other professional fees.
Net loss was $42.8m in the quarter, compared to a net loss of $33.0m for the same period in the prior year, and $151.8m for the full year, compared to $164.0m for the prior year. The improvement in annual net loss was driven by the net positive impact of the items noted above as well as the absence of debt extinguishment in 2023, partially offset by the change in the fair values of warrant and derivative liabilities and higher interest expense in 2023.
Adjusted EBITDA(1) was $(20.6)m for the quarter 2023, compared to $(26.1)m in the same period in the prior year, and $(77.4)m for the full year, compared to $(69.5)m for the prior year. The decrease in Adjusted EBITDA for the full year was primarily due to an increase in selling, general, and administrative expenses as a result of our growth initiatives, partially offset by an increase in Adjusted Gross Profit.
Capital expenditures totaled $23.1m in 2023, up from $22.5m in 2022.
Balance Sheet and Liquidity
As of December 31, 2023, Terran Orbital had $71.7 m of cash on hand and approximately $313.8m in gross debt obligations. The Company’s debt included $16.9m in connection with an obligation under one of its PIPE investment subscription agreements, which is payable in cash or equity at the Company’s option, subject to certain limitations.
Backlog
Backlog represents the estimated dollar value of executed contracts, including both funded (firm orders for which funding is authorized and appropriated) and unfunded portions of such contracts, for which work has not been performed. The unfunded portion of enforceable contracts is accounted for as variable consideration and is reported at our estimate of the most likely amount to which the Company is expected to be entitled. Although backlog reflects business associated with contracts that are considered to be firm, terminations, amendments or contract cancellations may occur, which could result in a reduction in our total backlog.
Our backlog totaled $2.7bn as of December 31, 2023, of which $2.4bn is related to Rivada Space Networks, compared to backlog of $170.8m as of December 31, 2022.
(1) Non-GAAP financial measure. Definitions of the non-GAAP financial measures used in this press release and reconciliations of such measures to their nearest GAAP measures are included below.
2023 Milestones
Launched 12 satellites into space, including:
- Runner-1 for ImageSat International
- Tantrum for Lockheed Martin
- 10 satellites for Space Development Agency’s Tranche 0 Transport Layer
Awarded $2.7bn in new contracts, including:
- 300 satellites for Rivada Space Networks
- 36 satellites for Lockheed Martin for the SDA Tranche 2 Transport Layer Beta
- 16 satellite constellation from new customer
- Contract with Axient to supply satellites for the Air Force Research Laboratory
- European Space Agency award for proximity operations and in-orbit servicing
Executing on expansion plans:
- Completed 50 Tech’s 60,000 sf addition to our existing manufacturing facility
- Increased clean room space ten-fold
- Completed our new printed circuit board assembly (PCBA) facility
- Completed our new module testing facility, over 2,500 modules built
- Expanded internal harness capability, delivered over 2,200 harnesses to programs
- Installed new large shaker table, TVAC chamber and shock testing facility
- Increased robotic assembly from module to panel (vehicle sub-assembly) level
- Broke ground on new 94,000 sf satellite assembly facility, anticipated to take possession in second quarter of 2024
Winning industry accolades
- Time Magazine’s TIME 100 Most Influential Companies 2023
- Fast Company’s Most Innovative Companies of 2023
- Business Intelligence Group’s BIG Award for Business, Small Business of the Year 2023
- Octane High Tech Awards, Best Large Disruptor / Innovator 2023
- Office of the Secretary of Defense’s Patriotic Employer Award 2023
About Terran Orbital
Terran Orbital Corporation is a leading manufacturer of satellite products primarily serving the aerospace and defense industries. Terran Orbital provides end-to-end satellite solutions by combining satellite design, production, launch planning, mission operations, and on-orbit support to meet the needs of the most demanding military, civil, and commercial customers. Learn more at www.terranorbital.com.(Source: BUSINESS WIRE)
28 Mar 24. Honeywell Acquires Italy’s Civitanavi for Autonomous Operations. The combination of Honeywell and Civitanavi Systems’ high-precision inertial navigation and stabilization solutions will provide new opportunities for customers to enable autonomous operations.
Honeywell is set to acquire Italy’s Civitanavi Systems, a provider of high accuracy inertial navigation and stabilization systems.
The acquisition is expected to further strengthen Honeywell’s capabilities to help customers create autonomous operations in aircraft and other vehicles.
Honeywell will initiate a voluntary tender offer to acquire all outstanding shares of Civitanavi for a purchase price of €6.30 per share in cash, at an equity value of approximately €200 m at closing.
Together with Civitanavi, Honeywell will be able to offer a broader set of technologies to its customers across the globe, whether they are traditional operators seeking to increase the autonomous capability of their existing fleets or are new entrants in the Advanced Air Mobility space.
Civitanavi’s product offerings of inertial navigation, geo reference and stabilization systems will complement technologies in Honeywell’s existing navigation and sensors business. Civitanavi specializes in high-performance Fiber Optic Gyro technology that Honeywell has not previously offered in its navigation portfolio.
“By integrating Civitanavi’s inertial technologies and sensors across Honeywell’s existing commercial, military, space and industrial platforms, our customers across the globe will now have access to a more robust portfolio of aerospace navigation solutions in support of their journey toward autonomous operations,” said Honeywell Aerospace Technologies President & CEO Jim Currier.
“With this acquisition, we will be able to immediately expand our offerings to customers in the European Union through Civitanavi’s navigation solutions, a capability we intend to further build out in the near-term. We look forward to adding this critical technology to our portfolio to help accelerate the growth of our Aerospace business. We are excited to welcome Civitanavi’s talented workforce as our newest Honeywell Futureshapers,” Currier added.
(Source: https://www.defenseadvancement.com/)
27 Mar 24. A new deal means Melrose can put past failures behind it. When we looked at Dowlais Group’s (DWL) annual figures, it brought home why the decision was taken to cleave the automotive business away from Melrose Industries (MRO). The much-touted turnaround specialist fell to an operating loss due to a goodwill impairment linked to the carrying value of its powder metallurgy division. But it wasn’t so much the loss in isolation, but the realisation of the managerial challenge posed by Melrose’s original £8.1bn acquisition of the GKN engineering group in 2018.
Melrose was not a conglomerate in the strictest sense, but its experience with GKN ties in with the narrative that more focused companies tend to perform better. Yet when you look at an organisation such as, say, Amazon (US:AMZN), you’re left with the impression that the conglomerate model may be evolving rather than disappearing altogether.
Melrose inherited around £629mn-worth of lossmaking contracts when the deal was struck, but what management couldn’t have foreseen was the strain on automotive supply chains brought about by a global semiconductor shortage, to say nothing of the grounding of civil aviation fleets in response to the pandemic. It’s notoriously difficult to fight a war on two fronts, but Melrose, which had established a reputation for unlocking cash from acquired businesses, often through stringent inventory management, found that operational efficiencies will only take you so far in the face of a ‘black swan’ event.
It’s worth remembering that Melrose was one of London’s Aim’s early success stories. By the time of the hostile GKN takeover, it had completed a succession of M&A deals that were notable for the rapid turnaround in the financial performance of the acquired entities, culminating in the 2016 deal to acquire Nortek, a ventilation equipment manufacturer, for £2.2bn. Within two years, Nortek had booked a 52 per cent increase in adjusted operating profits, achieving its original three-to-five-year targets well ahead of time. Unfortunately, matters then swiftly moved beyond management’s control, although it could be argued that private equity was poised to take a leading position in terms of M&A strategies anyway.
It’s curious to note that the Melrose split may have an antecedent in 1996 when Hanson ended its time as a diversified conglomerate by splitting into four separate listed companies: Hanson, Imperial Tobacco, The Energy Group and Millennium Chemicals. So much for nostalgia. At any rate, Melrose is a slightly different beast from the late Lord Hanson’s creation. The stripped-down, aerodynamic version of Melrose is now finding favour with the sell-side, as civil aviation volumes revert to the growth model. In a recent note, analysts at UBS increased its sum-of-the-parts valuation from 690p to 770p a share, citing “uniquely attractive aftermarket economics and platform exposures” when set against “original equipment manufacturers and suppliers with greater programme/margin risk”.
The analysts also make the point that the well-publicised issues with Boeing’s (US:BA) 737-Max aircraft will probably exacerbate constraints linked to the supply of new aircraft, thus providing support for aftermarket volumes. In its best upside scenario, UBS gives a potential valuation of 1,000p a share, representing a 50 per cent premium on the current share price.
Secular trends are now moving in Melrose’s favour. And even the 737-Max controversy has provided a potential unexpected fillip. There was further positive news midway through this month, when it was revealed that GKN Aerospace had cemented its long-term partnership with engine manufacturer Safran SA (FR:SAF), after signing a long-term agreement to expand its support for the LEAP (Leading Edge Aviation Propulsion) engines. The contract centres on parts production for the Leap 1A variant for the Airbus A320neo aircraft. It’s also expected that it will produce components for the LEAP 1B for the Boeing 737-Max aircraft in the future.
Analysis from the International Air Transport Association shows that the civil aviation market has moved out of the recovery phase, with revenues now 15 per cent in advance of pre-pandemic levels despite relatively slow growth in cargo volumes. Passenger flight numbers are estimated to rise to 4.71bn this year, a 4 per cent increase on 2019. And after three years of losses, airlines’ net profit hit $23.3bn, edging towards the adjusted 2019 rate. North America and Europe have led the way, which is significant given that much of the projected growth in flight numbers is expected in the Asia-Pacific and Middle Eastern markets.
Beyond the post-pandemic recovery, the structural growth of the civil aviation cycle is working in Melrose’s favour, aided by the fact that management no longer must contend with quite so many moving parts. A last word from analysts at Peel Hunt who believe that shareholders stand to benefit from additional share buybacks, with “organic potential and balance sheet optionality” generating “further substantial upside”. (Source: Investors Chronicle)
27 Mar 24. Big Technologies’ growth slows as it loses key surveillance contract.
The company might struggle to protect its impressive profit margins as growth slows
- Colombian contract ends
- Management says it still has a strong pipeline of potential customers
Surveillance software company Big Technologies (BIG) saw revenue growth slow from last year as it faces headwinds around contract timing.
Ironically, given the name, the problem with a company this small is that it is dependent on relatively few contracts. Last year, revenue grew 33 per cent due to an eight-year contract signed with the New Zealand department of correction. However, this wasn’t backed up with significantly larger contract wins this year.
The company is forecasting “short-term headwinds” to sales and profits in 2024 due to the ending of a contract in Colombia. This is a customer the company has been serving for a number of years, so it calls into question how essential the product offering is.
One strength of the company is its 70.7 per cent gross margin. However, this did fall from 72.5 per cent from the prior year due to more inventory provisioning. If the Colombia contract sets a precedent that the tracking product isn’t entirely essential, then other customers might start trying to negotiate down the prices.
Management did say it has a strong pipeline of future work and expects to return to growth in 2025. The concern is that Big is still trading on a FactSet consensus forward price/earnings (PE) ratio of 18, which is expensive for a company that is seeing growth slow quickly.
We have questioned how unique the technology is and whether Big would be able to protect its margins moving forward. The slowdown this year has backed up these concerns. It will take consecutive periods of accelerated growth to change our minds. Move back to sell. Last IC View: Hold, 247p, 29 Mar 2023. (Source: Investors Chronicle)
27 Mar 24. Rafael concludes a record year: ended the year 2023 with a record in sales of about 14bn NIS, a record in new orders amounting to about 30bn NIS and a net profit of 588m NIS.
Rafael Advanced Defense Systems Ltd. publishes today (Wednesday) its financial results for 2023, as approved by the company’s board of directors:
- A 21% increase in the volume of the company’s sales, which amounted to NIS 14,043m, compared to NIS 11,586m in 2022.
- An 85% increase in the volume of orders received by the company in 2023 – NIS 29,864m compared to NIS 16,104m in 2022.
- An unprecedented backlog of orders amounting to 52,416m NIS, a 47% increase compared to the backlog of 2022 (35,636 bn NIS) which is 3.6 years of sales.
- Net profit of 588m NIS, an increase of 17% compared to the net profit in 2022.
- Gross profit of 2,928m NIS, an increase of 19% compared to the corresponding year.
As mentioned above, Rafael’s order backlog reached an all-time high, with a 47% increase over 2022 – 52.416m NIS – driven by orders from both domestic and international markets. The volume of orders in 2023 increased by approximately 85%, totaling 29.864m NIS, with 57% of the orders coming from international customers (17.072 m NIS) and the remaining 43% from Israel (12.792m NIS).
The fourth quarter of 2023 was exceptional in terms of activity, with Rafael receiving orders totaling 14.514 m NIS, with over 61% of these orders being international, following the completion of large export deals. Sales volume in the fourth quarter stood at 4.594m NIS, a 19% increase compared to the corresponding quarter last year. Rafael notes a slight decrease in the gross profit margin compared to 2022 due to fluctuations during the “Swords of Iron War.”
Rafael Chairman, Dr. Yuval Steinitz: “We conclude 2023 as a record-breaking year in professional and business activity at Rafael. In its vision and mission, Rafael functions as a significant pillar in the security of the State of Israel. This year this vision was practically brought to fruition with some of the most advanced technological and operational breakthroughs. Even before the “Swords of Iron War”, whose effects on the company’s reports will be seen mainly in 2024, Rafael realized important opportunities in various countries in the world with huge deals such as the historic sale of the “David’s Sling” to Finland, the sale of Spike missiles to Greece, and more. I would like to take this opportunity to thank, on behalf of myself and the board of directors, the outgoing CEO of Rafael, Maj. Gen. Yoav Har-Even, for 8 years of leadership and significant work in the company. On behalf of the board of directors and the management, I would of course like to thank the Rafael employees and their families for their dedication and professionalism.”
Rafael CEO, Yoav Tourgeman: “Alongside our extensive life-saving activity in Israel, Rafael continues to operate globally with a diverse product portfolio, maintaining economic strength and commercial resilience. Rafael makes a crucial contribution to the IDF and the entire security establishment, with a wide range of advanced capabilities and systems resulting from significant investments in research and development. Above all, we rely on a high-quality human resource base, enabling us to meet the challenges and goals ahead. We expect to bring onboard approximately 2,000 new employees this year. While Rafael faces a challenging year in terms of performance and deliveries, I am confident that our proven operational experience, combined with cutting-edge innovation and excellent market positioning globally, will enable us to continue delivering the most significant value proposition to our customers.”
26 Mar 24. Czech gunmaker Colt CZ sells Vista Outdoor stake after rejected bid. Czech gunmaker Colt CZ Group (CZG.PR), opens new tab said on Tuesday it had sold all its shares in U.S. sporting and outdoor products group Vista Outdoor (VSTO.N), opens new tab after a rejected bid last year, as it turned focus to its planned acquisition of another group.
Colt CZ also reported on Tuesday revenue rose 1.8% year-on-year in 2023 to 14.86bn crowns ($638.5m), helped by a record fourth quarter and the start of a recovery in the U.S. market.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell 9.4% to 3.05bn crowns last year, in line with the company’s outlook. The company proposed an unchanged 30 crown per share dividend.
Colt CZ is forecasting revenue to rise up to 19.8% on a standalone basis and by up to 48.1% when factoring the expected contribution of its planned acquisition of Czech small-calibre ammunition maker Sellier & Bellot.
If the deal completes as expected by mid-2024, revenue should reach a range of 20.0bn to 22.0bn crowns and adjusted EBITDA should be in a range of 4.3bn to 4.7bn crowns in 2024.
The $820m deal for Sellier & Bellot has taken focus off a cash-and-stock merger offer to Vista rejected last November.
Investment firm MNC Capital has since made a bigger offer while Vista remains in the process of selling its sporting goods business to privately held Czech defence and civil manufacturing firm Czechoslovak Group (CSG) in a deal preceding any offer.
“Once we saw our bid was topped we decided there was no further logic to hold the stake,” Colt CZ Chief Executive Jan Drahota said, adding the last shares were sold this week. “As of today we don’t have any more shares.”
Colt CZ disclosed in October 2023 it held a 2.4% stake in Vista Outdoor and it and connected reporting persons had a stake exceeding 5%. On March 12, it said the stake had fallen below 5% and that Colt CZ’s stake was 1.9%. (Source: Reuters)
26 Mar 24. Smiths Group announces record orders and a change at the helm.
- A surprise change as Keel departs
- £100mn in new share buybacks
Shares in Smiths Group (SMIN) have flatlined over the past 12 months, but the market reacted positively after the engineering group announced £100m in new share buybacks, together with organic revenue growth of 3.9 per cent at the half-year mark. The group also announced that Roland Carter is taking over as chief executive following Paul Keel’s surprise decision to step down from the top job. Carter, a long-termer at the group, formerly headed up the Smiths Detection unit.
Indeed, Smiths Detection, alongside the John Crane business, were the major contributors to top-line growth, delivering growth rates of 8.9 and 12.7 per cent, respectively. Operating leverage on higher sales volume resulted in margin expansion at John Crane, and it would be reasonable to expect that matters could improve further given that investment in automation at the business unit has been a corporate priority.
Management points out, with some justification, that the interim results must be seen in context against a strong comparator in 2023, but perhaps the most pleasing aspect was the 16.5 per cent hike in the order book, with double-digit order growth across the largest business units. Order growth at Smiths Interconnect rebounded during the second quarter after a stuttering start to the accounting year, while performance at Flex-Tek was held in check by softness in the US construction market. Management anticipates that the latter business will return to growth in the second half.
Operating profit at £246m rose by 5.3 per cent on an organic basis, with an accompanying 20 basis point increase in the underlying margin. Return on capital was heading in the right direction, which is doubly positive given a 5.6 per cent increase in capital expenditure through the period.
Improved housekeeping, particularly in relation to working capital management, saw operating cash conversion rise to 26 percentage points to 89 per cent, while free cash flow generation more than doubled to £112m. The group ended the period with net debt equivalent to a manageable 0.9 times cash profits, even allowing for the buyback.
Conditions are expected to improve in key markets such as aerospace, security and energy, although the timing of interest rate retracement – an important consideration – remains open to question. The asking price of 16 times consensus earnings is about par from an historical perspective, but reaffirmed guidance of organic revenue growth within the medium-term target range of 4-6 per cent, underpinned by “record order books”, along with the prospect of margin expansion, is enough to justify our long-term interest. Buy. Last IC view: Buy, 1,650p, 26 Sep 2023. (Source: Investors Chronicle)
26 Mar 24. HENSOLDT achieves strong growth in the 2023 financial year. Company publishes 2023 annual report. The HENSOLDT Group continued its profitable growth trajectory in the 2023 financial year and met its most recent, more precise forecast. Investments in defence and security as a result of the ongoing geopolitical tensions worldwide were reflected in increased demand at HENSOLDT, particularly for reconnaissance, surveillance and self-protection systems. The company is thus consolidating its position as one of the leading companies in the European defence electronics market. (balance sheet press release dated 22 February 2024). The 2023 Annual Report, which is now available, provides an overview of the main pillars on which this success is based.
In its annual report, HENSOLDT looks ahead and beyond its own company: The report documents the role HENSOLDT technology plays in the air defence of cities such as Kyiv and Odessa. It shows how HENSOLDT is already developing the products of tomorrow and what role artificial intelligence will play in this. The company also gives start-ups the opportunity to increase the dynamics in the defence industry – the FCAS Accelerator is a first example of this. In addition, HENSOLDT’s journey from a manufacturing company to a series manufacturer will be outlined. To counter the shortage of skilled labour, HENSOLDT is also breaking new ground in recruiting.
The designated CEO Oliver Dörre has been gaining an overview of the company and its various locations since the beginning of 2024. He summarises his impressions of the first few months in the annual report. He will take over as CEO when Thomas Müller leaves the company on 1 April 2024.
The sustainability report also provides insights into the HENSOLDT ESG Strategy 2026, as the company prepares for the Corporate Sustainability Reporting Directive (CSRD) and aims to achieve climate neutrality by 2035. In line with the sustainability goals, the 2023 Annual Report is only available online for the first time (https://annualreport.hensoldt.net/en/).
26 Mar 24. Elbit Systems Ltd. (“Elbit Systems” or the “Company”) (NASDAQ and TASE: ESLT), the international high technology defense company, reported today its consolidated results for the fourth quarter and full year ended December 31, 2023.
Backlog of orders at $17.8bn; Revenues of $6.0bn; Non-GAAP net income of $299m; GAAP net income of $215m;
Non-GAAP net EPS of $6.70; GAAP net EPS of $4.82
In this release, the Company is providing US-GAAP results as well as additional non-GAAP financial data, which are intended to provide investors a more comprehensive view of the Company’s business results and trends. For a description of the Company’s non-GAAP definitions see page 7 below, “Non-GAAP financial data”. Unless otherwise stated, all financial data presented is US-GAAP financial data.
Management Comment: Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, commented: “Elbit Systems is committed to supporting the increased requirements of the Israel Ministry of Defense as well as maintaining our commitments to all our customers around the world.
The significant increase in the order backlog in 2023 highlights the relevance of Elbit Systems’ portfolio of advanced technological and operationally proven solutions that provide a competitive edge to our customers around the world.
The acceleration in revenue growth reflects the successful implementation of our operational transformation plan, as we increase capacity to convert a growing backlog into revenues.
In 2023, we continued our efforts to focus our portfolio on the end markets that are most relevant.
I would like to express my appreciation to our employees that have demonstrated significant resilience in challenging times. In view of Elbit Systems’ growth and our ability to address multiple challenges, including the current conflict, I am confident in our ability to realize our potential.”
25 Mar 24. Boeing CEO Dave Calhoun to step down in wake of ongoing safety problems. Boeing CEO Dave Calhoun said Monday he intends to leave the beleaguered company by the end of the year in a major shakeup of the company’s leadership. Boeing’s chairman and the head of the commercial airplane unit are also leaving.
Boeing’s chairman, Larry Kellner, will not stand for re-election as a board director. The board has elected former Qualcomm CEO Steve Mollenkopf to succeed him.
The company also announced that Stan Deal, CEO of Boeing Commercial Airplanes, is retiring. Stephanie Pope, Boeing’s chief operating officer since January, is taking his place effective immediately.
Boeing has been buffeted by more than five years of problems with its airplanes, including two fatal crashes of the 737 Max in 2018 and 2019 that killed 346 people, and most recently a door plug that blew out of the side of an Alaska Airlines 737 Max in January, leaving a gaping hole in the side of the plane. The problems have led to multiple groundings for safety issues and more than $31 bn in cumulative losses.
In a letter to Boeing employees Monday, Calhoun called the Alaska Airlines incident “a watershed moment for Boeing.”
“The eyes of the world are on us,” he said in announcing his departure plans. “We are going to fix what isn’t working, and we are going to get our company back on the track towards recovery and stability.”
The decision to leave was “100%” his choice, Calhoun said in an interview on CNBC Monday morning.
But Calhoun has become the focus of many who are critical of the way Boeing has been run in recent decades and the string of safety and quality issues.
“He’s the very best CEO that Airbus has ever had,” said Richard Aboulafia, managing director at AeroDynamic Advisory and a leading aerospace analyst, recently referring to the advantages gained by Boeing’s main rival during his tenure running Boeing.
His departure also comes in the face of widespread criticism of the company by CEOs of many of the world’s major airlines Boeing depends upon to buy its planes. CEOs of numerous airlines had asked to speak directly to the Boeing board last week, which Calhoun tried to characterize Monday as a normal process, even if it’s rare for customers to speak directly to directors.
As to why Calhoun decided to stay on through the end of the year rather than leave immediately, he told CNBC: “We have another mountain to climb. Let’s not avoid what happened with Alaska Air. Let’s not avoid the call for action. Let’s not avoid the changes that we need to make in our factories.” (Source: CNN)
22 Mar 24. Cohort vs Chemring: who wins in a troubled world? Fresh from a contentious electoral triumph, Vladimir Putin has rejected President Macron’s recent plea for a ceasefire in Ukraine during the Paris Olympics. The war has been raging for a little over two years, much longer than many would have initially anticipated, yet we don’t appear to be any closer to a resolution.
Indeed, political will, rather than Ukraine’s determination to resist Russian aggression, could shape events through the northern summer. At the time of writing, the latest aid bill, which provides financial support for Ukraine, is struggling to pass through US Congress, although European Union (EU) members recently agreed to provide another €5bn (£4.3bn) for military aid as part of the trading bloc’s formal assistance fund. The Financial Times notes that the continued political wrangling on Capitol Hill has meant that US defence contractors have been unable to exploit the boom in global military spending, at least in comparison with their European counterparts.
Matters have certainly been more positive closer to home. Figures provided by the House of Commons Library show that the UK is one of the leading donors to Ukraine, alongside the US and Germany, having pledged almost £12bn in overall support since February 2022. Security assistance provided by the US since the start of the conflict has topped the $75bn (£59bn) mark. Naturally, the scale of this contribution will rise significantly if the disputed bill eventually gains Congressional support.
There have been further signs that European countries have become more willing to double-down on their support, not least because of Sweden’s entry into the Nato alliance earlier this month.
For now, the war in Ukraine has placed a sizeable drain on both European and US arms stockpiles. The UK is still providing both lethal and non-lethal weaponry and equipment, although doubts have been raised as to whether the Ministry of Defence has been able to ensure adequate replenishment levels. This was borne out by disquiet among Conservative MPs after Jeremy Hunt’s failure to prioritise defence spending in the recent spring Budget.
We can say, however, that there will be little talk of any “peace dividend” in the years to come even if, by some miracle, hostilities cease in Ukraine – or even Gaza for that matter.
Armed conflict on this scale always informs future defence procurement decisions, but events in Ukraine have challenged many strategic assumptions, especially in relation to land-based warfare. The lessons learned will probably become clearer through the evolving nature of contract awards in the years to come, providing a secondary benefit for defence contractors, or at least those with the flexibility to respond to changes on the ground.
For the moment, however, the replenishment issue takes centre stage. UK defence contractor Chemring (CHG) has revealed that its Norwegian subsidiary, Chemring Nobel, had received €66.7mn from the EU as part of a €513mn funding round to boost ammunition production capacity. The bloc is looking to increase its annual output of shells to 2mn by 2025 to help counter the shortage in Ukraine. In addition, the Norwegian government has granted NKr428mn (£32mn) to bolster Chemring Nobel’s production capacity. Demand for the group’s countermeasures and energetics offerings is also on the rise, accounting for around 72 per cent of the record £756mn order intake in 2023.
We outlined the investment case for Hampshire-based Chemring in March 2023, since when the share price has crept up by a third. One of its UK stablemates, Cohort (CHT), has matched that appreciation rate, but it may now offer superior upside despite the health of Chemring’s order backlog and best-in-class book-to-build ratio.
Cohort reported a top-line increase of 22 per cent in its latest interim update, but its orders outstripped sales fulfilment by around a third. The balance sheets of both companies are in good trim, but Cohort trades at a sizeable discount to its UK rival based on their respective enterprise value to sales multiples. Admittedly, it does come up short of Chemring in terms of free cash flow yield, although research from Peel Hunt indicates that this will reverse during this year and next.
Cohort tends to rely on incremental contract awards as opposed to big-ticket affairs, but its order cover at the time of its interim release stood at a healthy 95 per cent. As if to bear this out, its Chess Dynamics subsidiary has just been awarded a £15.7mn contract from BAE Systems Maritime Australia to supply its Sea Eagle surveillance systems for the Australian navy’s Hunter-class frigates. Chief executive Andy Thomis notes that the contract “enhances the visibility of future revenues” – a worthwhile consideration for investors even if Putin unexpectedly breaks out the olive branch. (Source: Investors Chronicle)
25 Mar 24. Airbus to acquire INFODAS and strengthen its cybersecurity portfolio. Airbus Defence and Space has entered into an agreement to acquire INFODAS, a Cologne-based, German company that provides cybersecurity and IT solutions in the public sector including for defence and critical infrastructures. The transaction is subject to the customary regulatory approvals and is expected to be finalised before the end of 2024.
This acquisition supports Airbus’ strategic ambition to strengthen its cybersecurity portfolio for the benefit of its European and global customers. With exponential cyber threats, along with the increasing digitalisation and connectivity of its products and systems, cybersecurity is a pivotal component of Airbus’ development. Over the last years, the group has continuously developed its cybersecurity capabilities and expertise, ensuring the best possible protection for its products, operations, customers, and ecosystem, including major programmes such as the Future Combat Air System (FCAS).
INFODAS is a company with around 250 employees and annual revenues of about 50 m euros. Besides its headquarters in Cologne, INFODAS has additional offices in Germany in Berlin, Bonn, Hamburg, Munich and Mainz. The company has been certified by the Federal Office for Information Security (BSI) as an IT security service provider in the areas of information system auditing, consulting and penetration tests. The INFODAS’ SDoT Security Gateway product family is approved for classification levels up to secret. The products are also certified in accordance with Common Criteria and have other country-specific certificates.
22 Mar 24. MBDA expects orders, revenue in Italy to dip this year after new records in 2023. The Italian unit of European missile maker MBDA expects the number of new contracts and revenue to slip this year after seeing record high orders in 2023, its managing director said on Friday.
MBDA’s Italian order portfolio last year rose by just over 40% to 4.5bn euros ($4.87bn). New contracts almost doubled, for the second year in a row, to 2.3bn euros from 1.18bn euros the previous year, according to a presentation slide.
“This year we expect order volumes and revenues to be slightly below the levels of 2023 – hard to repeat given the record highs – but to still be significant,” Italy’s Managing Director Giovanni Soccodato said.
As world geopolitical tensions rise, global military spending is surging and the market for missiles and missile defence systems are forecast to grow.
“Looking ahead, from the solid base that has been created, it is extremely meaningful to prepare the future,” Soccodato told reporters, explaining that although contracts this year would not be as significant in terms of numbers they would concern products that would be key for the company’s future development.
The group is owned by France’s Airbus (AIR.PA), opens new tab and Britain’s BAE Systems (BAES.L), opens new tab, both with a 37.5% stake, and by Italy’s Leonardo (LDOF.MI), opens new tab, with the remaining 25%.
It has been frequently cited as a successful example to follow as more pan-European alliances in the defence sector are needed to take full advantage of military budgets in a more efficient and less fragmented way.
Earlier this month, MBDA reported that the consortium as a whole generated revenue of 4.5bn euros in 2023, with new orders rising to 9.9bn euros. The company’s total order portfolio is now worth 28 bn euros.
Soccodato said containing costs was particularly important at a time when traditional players like MBDA face aggressive competition from new players from countries such as South Korea and Turkey. ($1 = 0.9245 euros) (Source: Reuters)
22 Mar 24. The future of UK aircraft manufacturer, Britten-Norman, has been secured thanks to the sale of the business and assets, after its future was hanging in the balance just one month ago.
Joint administrators were appointed on Thursday 21st March 2024 to five companies within the group, being B-N Group Ltd, Britten-Norman Ltd, Britten-Norman Aircraft Ltd, BN Defence Ltd and BN Daedalus Ltd (‘the Companies’).
Britten-Norman Aerospace Limited
Following their appointment, the Joint Administrators of the Companies sold 100% of the share capital of Britten-Norman Aerospace Limited to Shelton Bidco Limited, an investment vehicle established by a group of financial investors led by 4D Capital Partners.
Immediately thereafter, the business and assets of the Companies were then acquired by Britten-Norman Aerospace Limited.
For the avoidance of doubt, Britten-Norman Aerospace Limited is not in any insolvency process.
UK aircraft manufacturer
Based on the Isle of Wight, Britten-Norman is a designer and original equipment manufacturer of aircraft, including the Islander, Trislander and Defender 4000, which are typically used in aerial surveys, air ambulance services, surveillance, law enforcement and security.
The business has operated for more than 60 years and has distributed its aircraft to over 100 countries. It also provides aircraft support services including field servicing and pilot training.
Shelton Bidco Limited has also acquired the share capital of the firm’s US entities BN Aircraft Sales Inc and Britten-Norman Inc.
Transfer of all 117 staff
The transactions secure the sale of the business and assets of the group and the transfer of all 117 staff to Britten-Norman Aerospace Limited across its head office and manufacturing site on the Isle of Wight, hangars in Lee-on-Solent, its design and engineering site in Southampton and sales office in London.
Pole: We’re proud to have secured a future for the business
Chris Pole, Managing Director at Interpath Advisory and joint administrator of the Companies, said,
“Britten-Norman is an important part of the UK aerospace industry that has a long track record of supplying world-renowned aircraft. We’re proud to have secured a future for the business and enable the management team to build on that heritage with fresh investment.
“Crucially, the deal also enables the transfer of all staff and the ability to secure precious manufacturing and engineering capability in the UK.” (Source: News Now/https://onthewight.com/)
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