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11 Jul 24. NATO summit highlights defense deals for RTX, Boeing and others. The NATO summit in Washington showcased a series of significant deals for top U.S. defense companies and others, including RTX (RTX.N), , Lockheed Martin (LMT.N), Boeing (BA.N), , Norway’s Kongsberg Defense (KOG.OL), and Sweden’s SAAB (SAABb.ST).
Here are some of the weapons procurements that were highlighted, many of which have been in development for months, if not years. Many date to before the summit, with the exception of the Stinger contract which was first publicly announced at the summit.
HIGHLIGHTED DEALS
- A $680m contract for 940 Stinger missiles made by the Raytheon unit of RTX (RTX.N). Shoulder-fired Stingers have been in hot demand in Ukraine, where they have successfully stopped Russian assaults from the air. Neighboring European countries have sought the weapon, fearing they may also need to beat back Russian forces.
- Patriot GEM-T missiles, made by COMLOG, a joint venture between RTX’s Raytheon and MBDA valued at $5.5bn. NATO in January said its procurement arm would support a group of member countries, including Germany, the Netherlands, Romania and Spain, with a contract to buy up to 1,000 Patriot air defense missiles.
- 155mm artillery shell components, made by various companies including General Dynamics (GD.N), valued at $365m, have been ordered. The most pressing need for Ukraine two years after Russia’s full-scale invasion is artillery ammunition, much of which has been supplied by the U.S. and other NATO members.
- An extension program for NATO’s AWACS airborne radar for $1.2bn that is being built by Boeing, Italy’s Leonardo (DRS.O), Spain’s Indra, Airbus (AIR.PA), Thales (TCFP.PA), Jacobs, and Kongsberg.
Tesla cars may have been used as cabs in New York, but the firm is hitting the brakes on plans for a self-driving robotaxi.
HIGHLIGHTED CO-PRODUCTION AGREEMENTS
- Norway’s Nammo and RTX’s Raytheon business unit agreed to partner to build rocket motors. These engines have become a hot commodity to propel a wide range of rockets and missiles in Ukraine and for future weaponry across NATO.
- The Ground Launched Small-Diameter Bomb (GLSDB) produced by SAAB and Boeing has been used successfully in Ukraine.
- Portions of interceptors for Lockheed Martin’s Patriot missile defense system will be produced by Poland’s Wojskowe Zakłady Elektroniczne. The United States this week also announced a second $2bn foreign military financing direct loan deal with Poland as part of a major modernization program that will include buying U.S. defense equipment.
- Kongsberg and RTX’s Raytheon business unit are working to improve the National Advanced Surface-to-Air Missile System, also called NASAMs. Originally announced in October 2023, NASAMs have become an important part of missile defense in Ukraine. (Source: Google/Reuters)
11 Jul 24. IFS, the leading technology innovator in cloud and Industrial AI software, today announces the acquisition of EmpowerMX. EmpowerMX is an AI-powered aviation maintenance software provider specialising in Airframe Maintenance Repair and Overhaul (MRO) solutions, which are trusted by the largest aviation organisations in the world, including Embraer, MRO Holdings, Delta, and American Airlines.
The acquisition reinforces IFS commitment to industrial AI and underpins the importance of industry-specific capabilities that enable customers to rapidly derive value and improve the way they serve their customers at the moment of service. For aerospace & defence customers, this translates to improving efficiencies, enhancing production control, minimising turn-around times, and reducing maintenance costs.
Together, EmpowerMX and IFS will provide aerospace & defence customers with the most comprehensive and capable maintenance management system that can support multiple users in multiple roles, as well as provide well-documented, paperless governance in the form of electronic task cards and logbooks.
The acquisition will deliver more value and industrial AI innovation to customers at a time when aviation MROs and the airline industry are experiencing multiple challenges that negatively impact profitability and operational efficiency, including supply chain disruption, labour and skills shortages, capacity shortfall, compliance, and ESG reporting.
EmpowerMX customers will now be able to leverage IFS capabilities and global scale to benefit from embedded IFS.ai innovation that enables them to maximise asset availability, deliver best practices, and ensure compliant delivery.
Scott Helmer, President, IFS Aerospace & Defence Business Unit, commented: “Combining EmpowerMX with IFS is a perfect opportunity to proactively advance our leadership position in the aviation MRO software space due to the many synergies we have: an aligned technology vision, deep sector expertise and a shared commitment to customer value. Together, we not only expand our reach and foothold into the burgeoning MRO space, but we can also better serve a wider base of global A&D customers with the industrial AI-fueled MRO innovation that enhances security, safety, and efficiency.”
Helmer added: “EmpowerMX’s world-class and established customer base of leading aviation brands complements our own roster of industry leaders including Southwest Airlines, Air France KLM, Lockheed Martin, and BAE Systems.”
Dinakara Nagalla, Founder & CEO, EmpowerMX, commented: “EmpowerMX has been at the forefront of technology innovation in the MRO space, and I am incredibly proud of what our team has achieved with the EMX platform, products, and services. We are excited to join the IFS team that will enable us to accelerate innovation and extend the value we create for MRO customers. With IFS’s global presence, EmpowerMX can help our MRO clients deliver faster turnaround, drive bottom line growth, and leverage the AI capabilities we are infusing into our products.”
IFS is independently recognised as a leader in EAM, ERP, and FSM solutions for asset and service-centric industries. Within A&D, more than 310 m passengers fly safely thanks to aircraft maintained by IFS.ai.
Aly Pinder, Research Vice President, Aftermarket Services Strategies, IDC, commented: “For the aviation MRO and airline industry, digital transformation initiatives are critical to addressing operational challenges, including long turnaround times, out-of-service aircraft, and compliance adherence,” said IDC analyst Aly Pinder. “As a notable company in the aviation MRO software market, IFS has helped some of the world’s largest air carriers address these challenges by modernising their enterprise intelligence systems. The acquisition of EmpowerMX will complement IFS’s existing cloud-based aviation maintenance solution and present IFS with an opportunity to strengthen its market position in the MRO sector.”
10 Jul 24. Videosys Expands Antenna Division Amid Increasing Demand from Defense Industry. Videosys has created a separate brand identity for its antenna business, named VB Antennas, fuelled by its expansion into new areas, including security and defense.
Videosys Broadcast has increased its office and manufacturing capacity in response to increased demand from robotics, security, and defense industries.
The company is recruiting more design and production staff and has created a separate brand identity for its antenna business, VB Antennas.
According to Videosys, the growth of the company’s antenna business has been fuelled by its expansion into new areas, including security and defense, where there is demand for robust, durable and flexible antennas that can be used in challenging terrain as well as harsh RF environments.
Colin Tomlin, CEO of Videosys Broadcast, stated that new customers in the defense and security sectors have been quick to recognise Videosys Broadcast not only has extensive expertise and knowledge of antennas, but is also an expert in video, radio and camera systems, placing Videosys in the unique position of being able to advise and build bespoke systems across a wide range of use cases.
Tomlin said, “Our antenna cover the L, S and C bands used in ground-based security and surveillance applications, as well as the NATO D-H frequency bands that enable battlefield and MANET connectivity, both on-the-move and at-the-halt.
“We also provide COTS and custom-designed antennas for use with unmanned vehicles such as drones, boats and ground transportation with a wide range of connector options. While our genesis and pedigree lie in the design and supply of broadcast quality antennas for outside broadcast and live sports events – a market that still accounts for the majority of our business – the technology used in broadcast antenna can equally be applied to these new markets. It’s just that the use case is different.”
“A good example of this is our new gooseneck omni antenna, which is ideal for body worn applications where having a fully bendable neck allows users to position the antenna in a particular direction to enhance battlefield communications,” he says. “We have expanded this principle across all our omni and sector antennas.”
Tomlin says; “Many of these new markets require suppliers to deliver up to 1,000 units at a time, so we must be nimble and ready to meet that demand without impacting on the supply of antenna products to our existing customers.
“By increasing our manufacturing capacity, we are able to keep lead times down to four to six weeks for all customers, which is significantly better than some of our competitors with lead times as long as 14 weeks. What’s more, all of our products are made in the UK. This is especially important in some sectors where provenance and reliability are key and where suppliers – and their suppliers – are carefully vetted before contracts are awarded.“
This comes two and a half years after the acquisition of Masthead Antennas. Tomlin added; “Since acquiring Masthead, we have streamlined our design and manufacturing processes, ensuring continuity of product. Parts are standardised and built with components that come from commercial suppliers.
“This is something we have always done, but is also a requirement for our ISO 9001 accreditation application, a globally recognised standard that helps companies audit their performance and demonstrate a commitment to quality.” (Source: https://www.defenseadvancement.com/)
11 Jul 24. Kitron: Q2 2024 – Robust profitability and positive outlook despite sector challenges. Kitron today reported quarterly figures that reflect the company’s ability to maintain operating margins in line with the company’s strategic target despite sector challenges.
Kitron’s revenue for the second quarter was EUR 167.6m, compared to 206.3m last year. There was strong growth within the Defence/Aerospace market sector, while other market sectors declined.
Second-quarter operating profit (EBIT) was EUR 15.0m, compared to 19.2m last year. EBITDA was EUR 19.6m, compared to 23.5m last year.
Profitability expressed as EBIT margin was 8.9 per cent, compared to 9.3 per cent last year.
The order backlog ended at EUR 454.5m, a decrease of 15 per cent compared to last year but an increase of 2 per cent from the preceding quarter.
Peter Nilsson, Kitron’s CEO, comments:
“Kitron is well-positioned for growth over the next 12 months. With robust performance in the Defence and Aerospace sector and strategic cost-saving measures, the company is well-placed to capitalize on emerging opportunities.”
Profit after tax amounted to EUR 10.4m, compared to 15.7m in the same quarter the previous year. This corresponds to earnings per share of EUR 0.05, compared to 0.08 last year.
Solid operating cash flow
Operating cash flow in the first quarter was EUR 18.8m, compared to 12.7m in the second quarter of 2023.
Net working capital was EUR 188m, a decrease of 1.0 per cent compared to the same quarter last year. Net working capital as a percentage of revenue was 28.4 per cent compared to 22.3 per cent last year.
Outlook
For 2024, Kitron reiterates its outlook from the first-quarter report and expects revenue to be between EUR 660 and 710m with an operating profit (EBIT) between EUR 53 and 60m, including EUR 4.8m in restructuring costs in the first quarter.
11 Jul 24. Booz Allen Fuels Automation in Space. Booz Allen Hamilton (NYSE: BAH) today announced that its corporate venture capital arm, Booz Allen Ventures, LLC, has made a strategic investment in Quindar, an early-stage commercial space technology company focused on automating and democratizing satellite operations. This investment is aligned with the firm’s VoLT business strategy—centered on velocity, leadership, and technology—and highlights the urgency of integrating mission-critical technologies across the space domain to increase awareness, security, automation, and data collection for decision advantage on a global scale.
“By continuing to invest in companies who are delivering innovative solutions and emerging tech to the space domain, we are demonstrating our commitment to safeguarding the nation’s interest and ensuring resiliency in an increasingly contested and competitive environment,” said Chris Bogdan, executive vice president at Booz Allen and leader of the firm’s space business. “This investment demonstrates Booz Allen’s commitment to shaping tomorrow’s capabilities and advancing our clients’ missions as a critical integrator and data solutions provider for the space domain.”
As commercial efforts continue to rapidly transform the space domain, federal clients are increasingly asking industry to help accelerate innovation and integrate technology to modernize legacy, monolithic satellite and ground systems that are aging out—replacing them with new, proliferated, commercially developed technologies that are AI-enabled.
To help integrate and automate these growing missions and processes, Booz Allen Ventures—which identifies and invests in early-stage technology believed to be transformative to mission outcomes for the public sector—scouted and made a strategic investment in Quindar whose virtualized, cloud-scalable platform significantly improves the ability to command cooperative fleets of spacecraft using non-proprietary technologies—opening a path to create near-autonomous command and control (C2) capabilities to support space battle management.
This is the second space-focused investment made by Booz Allen Ventures since its inception in 2022, and the tenth overall—with a throughline of AI, cyber, and data aimed at speeding innovation for the Department of Defense and federal government.
“Quindar is thrilled to partner with Booz Allen Hamilton in advancing AI-enabled solutions for space management. Together, we aim to transform how space missions are managed, making them more efficient, secure, and accessible,” said Nate Hamet, CEO and co-founder of Quindar. “Our combined expertise and technology will pave the way to utilize our mission management platform, which is currently operating multiple customers and assets in space and support the United States in achieving near-autonomous command, control, and communication capabilities across hybrid fleets.”
This collaboration further demonstrates the power of dual-use technology and the need for partnership between the federal and commercial arenas. It also reflects the growing need in the space domain to scale and integrate efforts for mission success, with a focus on automation and secure, open architectures.
“For the last five years or so, the stacks that support satellite operations have been separated into different stovepipes, such as launch, payload, and operation,” said Travis Bales, managing director of Booz Allen Ventures. “Quindar’s stack enables the future of space support operations for disparate partners and payloads to be controlled through one holistic view.”
Since launching, Booz Allen’s $100m corporate venture capital arm has made strategic investments in early-stage companies developing dual-use commercial technologies, including Latent AI, Synthetaic, Reveal Technology, Credo AI, Hidden Level, Shift5, Hidden Layer, Second Front (2F), and Albedo. (Source: BUSINESS WIRE)
11 Jul 24. Rosebank shares nearly double value on first day of trading.
Simon Peckham’s new venture modelled on his Melrose success has investors scrambling for a piece of the cash shell company, sending shares up 92%.
Shares in a £50m cash shell company attempting to replicate the success of the factory turnaround group Melrose Industries surged on their first day of trading as investors scrambled for a piece of the action.
Investors pushed the share price of Rosebank Industries from the 250p at which cornerstone investors took part in a placing earlier in the week to 480p, a first-day climb of 92 per cent.
Rosebank is headed by Simon Peckham, who led the old Melrose as it delivered fabulous returns for shareholders through a spate of bids that culminated in the £8.1 bn hostile takeover of GKN, the car and plane parts maker, in 2018.
He and other former executives of Melrose hope to adopt the same “Buy, Improve, Sell” formula on future prospective targets and are aiming for a first deal with an enterprise value of up to $3bn on either side of the Atlantic.
Investors were “clamouring” to own a slice of the new business, according to Dan Coatsworth, an investment analyst at AJ Bell. “Melrose is one of the best examples of value creation on the UK stock market,” he said, and Rosebank had “an identical strategy”.
In effect, the Aim-listed company still has no assets apart from net cash of £49m in the bank, but is now valued by the market at £96 m.
On paper, the early investors, who include the sovereign wealth funds of Singapore and Norway, respectively GIC and Norges, have almost doubled their money in the space of three days. Peckham, 61, who personally invested £1.35m for a 2.7 per cent stake, has already made a theoretical profit of £1.24m.
It is thought Rosebank could take advantage of the strong early performance to issue further shares to add to its cash pile.
The episode has echoes of the Spac [special purpose acquisition company] frenzy in the United States, when investors splashed out to back shell corporations that might or might not make large bids.
One notorious episode in UK stock market history was in 1999 when a quartet of big name entrepreneurs nicknamed the Knutsford Four floated a tiny cash shell, only to see its value mushroom from £5 m to £600 m on rampant speculation they might bid for Marks & Spencer. They didn’t. (Source: The Times)
10 Jul 24. Space startups funding continues to recover as investors bet on government spending. Space startups attracted $2.41bn in global investments from April to June, marking a third consecutive quarter of growth in funding, according to British investment firm Seraphim Space.
WHY IT’S IMPORTANT
This positive trend follows a period of high interest rates that had deterred investors from funding companies involved in rockets, satellites and space-based data services.
Companies such as SpaceX and Planet Labs (PL.N) have become increasingly vital as geopolitical tensions drive countries to spend more on satellite-based imagery and assets for intelligence gathering and communications.
CONTEXT
Investments in Europe were flat from the prior quarter, while in North America, they were down about 50%. However, deals are often announced after the end of a quarter and it is too early to tell whether a decline in the United States suggests a weak 2024, or a bumpy recovery, the space technology investment firm said.
The strong quarter was propelled by a $943m investment in Shanghai Spacecom Satellite Technology, the largest Chinese space tech deal to date.
This development reflects a growing determination among Chinese investors to rival U.S. capabilities in space, the report said.
KEY QUOTE
“I’m optimistic in predicting that at least in terms of growth, space investment market in 2025 is going to be better than 2024 because unfortunately I don’t really see the geopolitical challenges around the world resolving themselves in the course of the next 18 months,” said James Bruegger, chief investment officer at Seraphim Space.
(Source: Reuters)
10 Jul 24. Solid State – A solid way to ride the defence spending boom.
A UK electronics group is benefiting from increased defence spending and is making inroads into other markets
- Annual revenue up 29 per cent to £163m
- Pre-tax profit up 44 per cent to £15.6m
- Net debt slashed 58 per cent to £4.7m
Redditch-based value-added electronics group Solid State (SOLI: 1,460p) has delivered a record year of profit and revenue, having upgraded guidance twice during the 12 months to 31 March 2024.
The outperformance was helped by the earlier than expected shipment of a Nato defence customer order which helped boost like-for-like revenue by 60 per cent in the group’s communication equipment division. The defence and security sector accounted for 44 per cent of total revenue, highlighting Solid State’s exposure to a market that is seeing increasing demand as governments raise budgets in an unstable global geopolitical environment. Indeed, such is the demand for more complex systems from Tier 1 security and defence customers that the group is investing in a new production facility.
The medical industry is another key market and one that now accounts for 10 per cent of group revenue. Solid State is benefiting from its relationship with Tier 1 customers, including Siemens Healthcare, and is focusing on higher-value, longer-term projects where it can offer its engineering value-added capabilities. This also highlights the strategy of focusing on structural growth markets to sell its diversified product range into a wide customer base, thus making the business more resilient.
True, analysts at house broker Cavendish conservatively forecast pre-tax profit of £10mn on revenue of £143mn in the new financial year. However, there is ample scope for upgrades as the year progresses (as was the case in the year just ended), driven by additional contract wins, and potentially large ones, as well as bolt-on acquisitions. Net debt is forecast to be slashed to £0.3mn by 31 March 2025, so the board has ample firepower.
Rated on 14.7 times forecast operating profit to enterprise valuation, I see scope for upside to consensus fair value (1635p) and my own 1,700p target price, having suggested buying the shares at 1,300p (‘Alpha Research: An overlooked share to benefit from rising defence spending’, 20 July 2023). Buy. (Source: Investors Chronicle)
09 Jul 24. AE Industrial Partners, LP (“AEI”), a private equity firm specializing in national security, aerospace and industrial services, today announced the close of its third flagship private equity fund, AE Industrial Partners Fund III, LP (“Fund III”), with total capital commitments of $1.28bn.
Reflecting the firm’s strategic focus on its three key target markets, Fund III will make control investments in the critical “toll gates” across the aerospace and defense supply chains and support key industry suppliers as they scale up production to meet ongoing and increased demand from their respective end markets.
Commitments to Fund III came from a diverse mix of institutional investors in the U.S. and around the world, including leading endowments, charitable foundations, public and corporate pensions, financial institutions, funds of funds, family offices, and sovereign wealth funds.
“We are extremely grateful for the support shown by our existing investor pool, as well as the numerous global commitments from new investors who have joined us, expanding and diversifying our investor base,” said Michael Greene, Co-CEO & Managing Partner at AEI. “Over the past several years we have seen a tremendous growth of interest in our target markets from LPs, and we look forward to continuing our work building the next generation of middle market companies in national security, aerospace and industrial services.”
To date, AEI has deployed more than a quarter of Fund III into five platforms and three add-on investments. These include:
- York Space Systems: A leading independent provider of small satellites, satellite components, and turnkey mission operations.
- RedLattice: A pure-play cyber technology company providing full spectrum cyber capabilities for customers in the U.S. national security, defense, and commercial communities.
- Firefly Aerospace: An emerging leader in economical launch vehicles, spacecraft, and in-space services.
- Yingling Aviation: A leading provider of maintenance, repair, and overhaul (“MRO”) and fixed-base operator (“FBO”) services to business aviation and government customers throughout the United States.
- Calca Solutions: A proprietarily sourced specialty chemicals business that sits within several of AEI’s target markets, including specialty industrial, space, aerospace, and defense.
To date, Fund III has offered nearly $870m of co-investment to Fund III limited partners and other investors.
AEI’s investment approach focuses on identifying companies with differentiated capabilities and market positions and targeting opportunities that provide strong growth potential, with a balance of organic and acquisition-based growth.
“Investors value our team’s decades of experience, specialized industry expertise, and deep network of relationships that extend throughout our target markets,” added David Rowe, Co-CEO & Managing Partner at AEI. “We are also well positioned to take advantage of current geopolitical and macroeconomic trends that have contributed to a significant pipeline of exciting investment opportunities.” Kirkland & Ellis LLP served as legal advisor to AEI. (Source: BUSINESS WIRE)
10 Jul 24. Patria Group’s Interim Report for 1 January – 30 June 2024. Patria Group’s Interim Report for 1 January – 30 June 2024: Patria’s net sales and order stock developed well in the first half year.
The first half year 2024
- Patria Group’s net sales for the first half year was EUR 375.9m (EUR 321.8m in the comparison period).
- Operating profit was EUR 21.7m (EUR 15.8m).
- Equity ratio was 33.0% (39.1%) and net gearing 118.6% (77.8%).
- The third year of Patria’s Horizon 2025 strategy commenced according to expectations. Patria’s net sales and the development of order stock are at a good level and profitability at the expected level.
- The development of customer-centricity, operational efficiency and productivity and new ways of working continued in the second quarter according to Patria’s Horizon 2025 strategy. The focus of the development has been on Patria’s Operations unit, responsible for company’s production and supply chains, and Portfolio unit, responsible for Patria’s products and services and their development. Patria’s renewed operating model came into force on 1 January, 2024.
- Patria’s success in 6×6 and 8×8 vehicle programmes has continued, which supports the development of other business operations and Group’s internationalization.
- It was announced in early May 2024 that Germany proceeded to the research and development agreement phase of the Common Armoured Vehicle System (CAVS) programme. Germany is the fourth country to join this phase with Finland, Latvia and Sweden.
- On 24 May, 2024 Patria opened a new armoured vehicle production facility in Valmiera, Latvia, marking the start of full-cycle production of Patria 6×6 armoured vehicles in Latvia, the first and so far, the only one in the Baltics.
- In June, it was announced that Patria and Pratt & Whitney, an RTX business, signed a Memorandum of Agreement (MoA) that covers the contractual framework for Pratt & Whitney F135 engine production and sustainment projects in Finland by Patria. The agreement covers the assembly of F135 engines and components between 2025-2030, followed by a transition to F135 engine Maintenance, Repair, Overhaul and Upgrade (MRO&U) operations, beginning in 2030.
- Patria signed in June a bill of sale for the acquisition of the entire share capital of Nordic Drones Oy (‘Nordic Drones’), a Finnish leading drone pilot trainer and manufacturer of drones designed for professional use. Nordic Drones’ expertise in manufacturing professional drone systems for numerous customers is a reinforcement of Patria’s Unmanned Aerial Systems (UAS) offering, which benefit mutual and new customers in Finland and internationally, across all operating environments. The company employs 10 people. The completion of the acquisition requires the approval of the Finnish Ministry of Employment and the Economy (‘TEM’) and the related authority process has started.
- On 17 June, 2024 at Eurosatory in Paris, All Terrain Vehicle (ATV) concept vehicle developed within European Future Highly Mobile Augmented Armoured Systems (FAMOUS) programme was revealed in Patria’s stand. The aim of FAMOUS programme is to improve the performance of new and existing armoured vehicles with the support of EU funding. Finland is the lead nation and Patria the industrial coordinator of the FAMOUS programme.
- In June it was also announced that Patria signed a contract with the Finnish Defence Forces Logistic Command on Squadron 2020 programme´s project support expert services. Services include support for project management, engineering, and other expertise support.
- Change negotiations were held in Patria’s Pilot Training operations during the second quarter on the possible termination of the function during 2025. The function is mainly focused on arranging professional civilian pilot training. Alternatively, efforts are being made to find an external successor for the business or part of it. After negotiations, the termination of the employment of all 36 employees in Finland is being considered on production-related and financial reasons due to the gradual decline in the training activities of airline pilots. The effects on personnel in Córdoba will be resolved separately, taking into account the procedures of Spanish legislation. The ongoing pilot training programmes will be finalised as planned. The plan will not have an impact on Patria’s military pilot training activities.
Outlook for the rest of the year
Patria continues to strengthen its operational efficiency and productivity and seeks profitable growth in line with its Horizon 2025 strategy in the third year of the strategy period. Patria’s reliable and cost-effective lifecycle support services and top-notch products have a key role also in the future in maintaining required performance of customer fleets in all conditions.
Following Finland’s decision in December 2021 to acquire F-35 fighter jets, negotiations concerning industrial participation of the selected aircraft will continue also in 2024. Preparations to kick off the production are under way, and the resourcing needs are being analysed and the relevant recruiting has commenced.
The multinational joint CAVS programme of the Patria 6×6 vehicle is proceeding as planned. The serial production of the Finnish and Latvian vehicles is ongoing and the first batch of vehicles to Sweden has been delivered. Germany has officially joined the programme by signing the Technical Arrangement. The joint programme has raised interest and is open also for other countries to join by mutual consent of the participating countries.
In 2023, Patria and Japan Steel Works Ltd. signed a relating license agreement on manufacturing Patria AMV XP 8×8 vehicles in Japan and the preparations for kicking off manufacturing are ongoing. The start of serial production of Slovakia’s 8×8 vehicle project has been slower than expected, which may affect the outlook for the rest of the year.
The impact of long-term development of the current geopolitical situation, general economic uncertainty, inflation and increasing costs for the rest of the year are difficult to evaluate reliably. At the same time Patria’s delivery capability is expected to stay at a good level. The outlook for net sales and profitability for the rest of the year remains strong. In the mid and long term, Patria and the defence industry in general are likely to see an increase in demand as defence spends are increasing in the majority of European countries.
09 Jul 24. Adam Sivner, a Managing Director in Houlihan Lokey’s Industrials Group, said: “The UK drastically needs a coherent and long-term focused industrial strategy. The country has a long-standing pedigree in various critical industries and remains a world leader in aerospace and defence, flow control, satellite communications technology, and electronic components, amongst others. Given such history, UK manufacturing has seen numerous businesses, such as Cobham, Ultra, and Meggitt, become acquisition targets for international strategics and private equity. Concurrently we are seeing significant investment in digitalisation and skilled labour on a global basis, which is making the UK less attractive to manufacture in. If the UK is to remain as a home to world leading manufacturers, then it will need a detailed investment strategy to help support these businesses in competing on the global stage and ensure they can resist being consolidated by larger acquirers.”
08 Jul 24. Boeing in talks with US defense department on impact of guilty plea – source. Boeing is in talks with the U.S. Defense Department over how the planemaker’s planned guilty plea could affect its extensive government contracts, a person briefed on the matter said.
Late on Sunday, the Justice Department said in a court filing that Boeing had agreed to plead guilty to a criminal fraud conspiracy charge to resolve an investigation linked to two 737 MAX fatal crashes.
Boeing and the Defense Department did not immediately comment on Monday.
Boeing shares were up 3.4% on Monday to $190.68 in morning trading.
A guilty plea potentially threatens the company’s ability to secure lucrative government contracts with the likes of the U.S. Defense Department and NASA.
Boeing’s defense and space unit is vital to its business, with $7bn in first quarter sales, up 6% from a year ago. Boeing in its annual report said U.S. government contracts represented 37% of its revenue last year including foreign military sales.
Still, the financial costs tied to the plea appeared “manageable relative to the company’s scale and overall obligations,” said Ben Tsocanos, airlines director at S&P Global Ratings.
“We expect that Boeing will likely continue to be a key supplier of defense and space products following the guilty plea,” he said.
As part of the plea deal, Boeing will pay a criminal fine of $243.6 m. Boeing has also agreed to invest at least $455 m over the next three years to strengthen its safety and compliance programs, have the Justice Department appoint a third party monitor to oversee the firm’s compliance, and to make annual reports to the Department of Justice.
Delivery Hero shares slide on EU antitrust worries
The prices of Boeing’s bonds were little changed in morning trading in New York on Monday, LSEG data shows.
Bankers said Wall Street’s appetite to finance Boeing could sour if the guilty plea had a material impact on its business – through missing out on major contracts, for example. (Source: Google/Reuters)
01 Jul 24. SpaceX valued at $200bn. SpaceX is contemplating another fundraising operation by selling shares in a tender offer that could value the closely held company at roughly $200bn (€185.7bn), according to Bloomberg. SpaceX is reportedly discussing a tender offer — a transaction that enables employees and insiders like investors to sell shares — that may kick in days, said some of the people, who asked not to be identified because the information is confidential. The price for the upcoming tender offer hasn’t been decided but SpaceX is weighing offering shares at $108 to $112 apiece.
The last sell-off of shares valued SpaceX at around $180bn.
SpaceX has frequently been said to be contemplating an Initial Public Offering (IPO) but both Elon Musk and President and COO of SpaceX, Gwynne Shotwell, have said “not yet” when specifically asked about an IPO.
Musk’s view is that an IPO and obligatory stock market listing places an unnecessary work-load on a business.
Last week, Musk said, “The legal load and pressure for short-term results for a public company are very high,” perhaps reflecting on the challenges he experienced in getting shareholders to approve his $56 bn compensation package on his Tesla shareholding.
According to numerous sources, SpaceX achieved cash flow breakeven in November of 2023. Musk stated that SpaceX had “no need for additional capacity and will actually be buying back shares.” He said liquidity rounds for investors and employees are held around every six months.
Bloomberg added that SpaceX probably booked revenues of $9 bn in 2023 for its rocket launch and Starlink broadband service, which provides low-cost internet in remote locations. (Source: Satnews)
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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
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