Sponsored by SPX Communication Technologies (TCI & ECS)
www.tcibr.com
www.enterprisecontrol.co.uk
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29 Aug 24. More than £200m wiped off Britain’s struggling Concorde successor. Schroders cuts value of stake in Reaction Engines by 87pc amid slow revenue growth. A British plane engine company – dubbed the heir to Concorde – has seen more than £200m wiped off its value by a major investor as it struggles to raise funding.
Schroders cut the value of its stake in Reaction Engines by 87pc, the fund manager said. It suggested that slow revenue growth meant the Oxfordshire company would need more time to break even. Reaction Engines has secured investment from Rolls-Royce, BAE Systems and the Government.
It is developing a hybrid jet and rocket engine, known as Sabre, which could lead to hypersonic space planes travelling at speeds of up to 19,000mph and offer flights from Britain to Australia in four hours.
The company’s groundbreaking pre-cooling technology prevents its engines from overheating as they get up to speed before activating the rocket portion of a flight.
Reaction Engines has sought to raise new funds after missing financial forecasts.
Schroders, which took part in a £40m funding round last year, owns a 4.1pc stake in the company, according to Companies House records. The group said it had revalued its stake from £10.6m in December 2023 to £1.4m at the end of June 2024.
On that basis, the company’s total value has fallen from £256m to £33.8m.
The company has raised more than £150m to date and has secured research and development grants from the British and American governments. Other investors include a United Arab Emirates’ sovereign wealth fund.
“Despite steps to commercialise its heat-exchanger technology and recent contract awards, revenue growth at Reaction Engines has been slower than management anticipated, and the company will require further investment and time to become cash positive,” Schroders said.
“Reaction Engines has appointed advisers to raise additional funds from new and existing investors.”
Rolls-Royce has said it was among the companies involved in the fundraising talks.
Philip Dunne, the Reaction Engines chairman and a former defence minister, has said that financing conditions were more difficult than when the company last raised funds in 2022. (Source: Daily Telegraph)
29 Aug 24. IMCO Group reported financial results for the first half of 2024, showcasing exceptional growth in order backlog and profitability. At a record NIS 799m, the backlog has more than doubled compared to NIS 299m in H1 2023. This robust backlog, comprised of long-term multi-year contracts, is expected to fuel the company’s continued growth as these contracts materialize in future financial results.
IMCO Group’s financial performance in H1 2024 reflects significant improvements across key metrics. Revenue increased to NIS 128.1 m, representing a 2.6% growth compared to the same period last year. This growth is resulting from the groups’ operational efficiencies and organizational restructuring, which led to an impressive jump in gross profit to NIS 25.7m, pushing the gross margin above 20% for the first time and to a net profit soaring to NIS 5.3m, indicating a staggering 179% year-over-year increase.
The combination of improved profitability and a substantial order backlog positions IMCO Group for sustained expansion in the coming years, reflecting its strengthened market position in both defense and civilian sectors.
Ariel Kendel, CEO of IMCO Group, commented on the financial results: “The results of the first half of 2024 reflect IMCO Group’s significant progress. The increase in gross profit margin, which led to a surge in net profit, highlights our operational efficiency. The dramatic growth in our order backlog to a record of 799m NIS ensures business continuity and provides a solid foundation for continued growth in future revenues and a basis for expansion in the global defense and civilian markets.”
Yoav Ben Shem, Chief Business Officer at IMCO Group, added: “The significant order we received in the U.S. is a testament to our global expansion strategy and the quality of solutions we offer. The American market is a strategic target for us, and our success there highlights our ability to meet the highest standards of the global defense industry. We see significant growth potential in this market and intend to continue investing in developing innovative products and strengthening relationships as long-term partners to leading integrators in the market.”
IMCO Group and ADTI will present their latest technology and solutions at the AUSA exhibition – Booth 1342.
27 Aug 24. Motorola Solutions acquires military radio provider Barrett Communications. The man-portable communications market is the second largest segment in the wider tactical communications market, which is forecast for strong growth.
Motorola Solutions has moved to acquire Barrett Communications, a provider of specialised and tactical radio communications operated by users in the security, coast guard, government, and private sectors, with the terms of the deal not disclosed.
Announcing the move on 15 August, Motorola said that the deal “reaffirms [the company’s] commitment” to expanding its portfolio in mission-critical communications, further extending into the Asia-Pacific sector with the acquisition of Australia-based Barrett Communications.
Barrett Communications designs high frequency (HF) and very high frequency (VHF) radio systems, intended to provide immediate communications capability without the need for infrastructure, lending it to support roles in security and peacekeeping operations, as well as humanitarian assistance and disaster recovery, so-called HADR, operations.
“Barrett brings us a new portfolio of communications capabilities beyond traditional land mobile radio, allowing us to support highly specialised operations,” said Mark Schmidl, senior vice president, International Sales, Motorola Solutions.
Andrew Burt, CEO of Barrett Communications, said the deal would help extend “critical voice communications to support essential operations, humanitarian work and disaster response and recovery”.
Man-portable tactical communications growth positive
According to a GlobalData report into the global tactical communications market, which was valued at $16.7bn in 2023, the sector was projected to grow at a compound annual growth rate of 4.2% from 2023-2033. The sector was expected to reach a value of $25.2bn by 2033 and cumulatively value $221.0bn over the forecast period.
The tactical communications market consists of three categories: man-portable, platform-based, and stationary. GlobalData analysis states that the market is expected to be dominated by the platform-based segment, which accounts for 74.2% of the market, followed by man-portable segment with 16.7% share.
Among geographic segments, North America is projected to dominate the sector with a share of 40.9%, followed by Europe and Asia-Pacific, with shares of 28.9% and 22.5%, respectively. (Source: army-technology.com)
26 Aug 24. TECHWAY joins the group NCS SYSTEMS. We announce the acquisition of TECHWAY by NCS SYSTEMS. This alliance is a key step in our customer-care strategy by offering the state-of-art technologies and top-level services to demanding markets.
About NCS SYSTEMS
Founded in 1989 in Amsterdam by NIJKERK HOLDING and taken over in 2022 by its management with the support of Isatis Capital, NCS SYSTEMS is an expert of IT solutions for the most demanding markets such as Defence, Aerospace, Transportation, Industry, Medical and more.
A constantly evolving company, the group is recognized for its strong value-added offer, and is distinguished by its research office, which responds to the specific needs of its customers in:
- the eco-conception
- the certified solutions (UL, CE, Tempest, MIL-STD, EN50155, …)
- the embedded monitors
- the development of customer applications (connected and smart solutions for real-time data acquisition, predictive analysis and advanced automation)
NCS SYSTEMS has two production sites in France and Belgium, and now integrate over 5000 industrial PCs per year and approximately 150 equipped cabinets on their sites, combine with obsolescence and project management services.
About TECHWAY
Founded in 2003, TECHWAY aims to develop advanced electronic solutions for signal and video acquisition and processing in real-time applications. TECHWAY has unique skills in the use of complex technologies, such as FPGA or high-speed optical communications, to design innovative solutions.
TECHWAY has become a pionneer company of Embedded Electronics market in Europe and all around the world.
We simplify the use of these technologies by designing “ready-to-use” embedded solutions to reduce their cost to system integrators.
TECHWAY’s product range is the result of our defense engineering activities and our R&D efforts in close collaboration with key-player customers. The TECHWAY products are modular and versatile. They meet international standards and are designed to adapt to the widest range of industrial environments. The goal of TECHWAY team is to provide the industrial sectors with high-end solutions at a competitive cost.
Mr. Patrick Méchin, founder and CEO of TECHWAY says “The Customer Satisfaction is the driving force of TECHWAY growth strategy since 20 years. We offer ever more innovative solutions thanks to our team’s expertise based on ongoing training and customers’ feedbacks. The merger of our compagnies is new story between two experts which are sharing the same business culture and know-how.”
A Key Alliance for a Bright Future
“I congratulate Patrick Méchin for the exceptional work, he did over the last 20 years. I thank him for the trust he gave to us.
Thank you to all the TECHWAY team and our Advices for their hard work during this process.
We are pleased to announce the new alliance between our companies and we look forward to start working together.
Thanks to our join goal, NCS SYSTEMS and TECHWAY will still offer high value-added solutions together with an outstanding service.
This acquisition will strengthen our technological skills and broaden our range of solutions to fit our customers needs with high-quality innovations. We look forward to start this new story together and still be innovative for our customers.”
27 Aug 24. The leading 15 defence contractors are forecast to see free cash flow of $52bn by the end of 2026. The world’s largest aerospace and defence companies are set to rake in record levels of cash over the next three years as they benefit from a surge in government orders for new weapons amid rising geopolitical tensions. The leading 15 defence contractors are forecast to log free cash flow of $52bn in 2026, according to analysis by Vertical Research Partners for the Financial Times — almost double their combined cash flow at the end of 2021. Five top US defence contractors are forecast to generate cash flow of $26bn by the end of 2026, more than double the amount in 2021. The figures exclude Boeing, given its recent problems and heavy weighting towards civil aerospace. In Europe, national champions BAE Systems, Rheinmetall and Sweden’s Saab, which have benefited from new contracts for ammunition and missiles, are expected to see combined cash flow jump by more than 40 per cent. The industry is benefiting from a sharp increase in military spending as governments increase their budgets in response to Russia’s full-scale invasion of Ukraine and escalating tensions in the Middle East and Asia. In the US, recent aid bills for Ukraine, Taiwan and Israel allocated nearly $13bn for weapons production at America’s five biggest defence groups — Lockheed Martin, RTX, Northrop Grumman, Boeing and General Dynamics — and their suppliers. In the UK, the Ministry of Defence has committed £7.6bn for military aid to Ukraine over the past three years, including for stockpile replenishment. The government spending surge has already propelled order books to near record highs. It typically takes several years for new contracts to translate into higher sales — defence companies book the majority of their sales once weapons are delivered — but the growing cash flows are already prompting debate about how the industry will spend the money. “It’s the bn-dollar question for the industry: companies typically don’t like holding large amounts of cash on their balance sheets, so what do they do with all that money if acquisitions are not that straightforward? Share buybacks and dividends are one way,” said Robert Stallard, analyst at Vertical Research. Companies had already directed bns of dollars into share buybacks before the recent flood of new orders; some took on extra leverage to do so. Last year was the strongest for buybacks by aerospace and defence companies in both the US and Europe for the past five years, according to data from the Bank of America, although levels remain far below those of other sectors. Lockheed Martin and RTX bought back close to $19bn in stock between them last year. In Europe, BAE Systems this summer concluded a three-year £1.5bn buyback programme and immediately started a further £1.5bn buyback. The large repurchases using taxpayers’ money by US contractors have prompted criticism among some lawmakers who have questioned whether companies are investing enough in new facilities and production. Executives have insisted they are boosting capital spending even as they return money to investors. Companies will also be looking for more deals, said analysts, while cautioning that big purchases would be restricted by regulatory concerns about competition. (Source: FT.com)
18 Aug 24. Redwire to acquire spacecraft developer Hera Systems. Redwire Corporation (NYSE: RDW) has signed a definitive agreement to acquire Hera Systems, Inc., a spacecraft developer focused on specialized missions for national security space customers.
With the addition of Hera Systems’ cutting-edge platform, Redwire expects to strengthen its spacecraft portfolio and be well-equipped to support specialized National Security Space missions in GEO.
Founded in 2013, Hera Systems is a privately held company headquartered in San Jose, California, that focuses on developing a new class of high-performance spacecraft to support the evolving requirements for national security missions operating in contested space. Hera Systems’ advanced platform incorporates cyber-secure communications, resilient power systems, highly accurate pointing, extensive maneuverability and massive on-board computing power supporting mission- and payload-specific machine learning. In 2022, Hera Systems was contracted by Orion Space Solutions to develop three satellites for U.S. Space Force’s Tetra-5 mission—an on-orbit servicing demonstration in GEO.
Redwire has significantly increased its national security space business, recently announcing it was awarded a prime contract to develop and demonstrate a Very Low Earth Orbit (VLEO) spacecraft for DARPA’s Otter program. Redwire continues to support the warfighter as an antenna supplier for the Space Development Agency’s Transport Layer program dating back to Tranche 0 in 2020.
Hera Systems has experienced profitable topline growth, and for the year ended December 31, 2023, Hera recorded $15 m of revenue. Redwire will finance this acquisition with balance sheet liquidity and expects Hera Systems to add meaningfully to future growth and profitability. As part of this acquisition, which is expected to close in the third quarter, Redwire is adjusting its full-year 2024 guidance from $300 m in revenue to $310 m in revenue.
“Hera Systems’ platform is highly complementary with Redwire’s suite of national security space solutions,” said Peter Cannito, Chairman and CEO of Redwire. “Similar to our focus on VLEO platforms, we see increasing opportunities to unlock and deliver new solutions in MEO, GEO and other domains to support the warfighter and address critical needs in National Security Space. This transaction fits squarely within our growth strategy by adding significant capabilities to move up the value chain in select areas of emerging hybrid architectures.” (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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