BAE Systems Investor Brief - March 2005
31 Mar 05
In this month's brief:
- NIMROD MRA4
- TYPHOON PROGRESS
- LANDING SHIP DOCK (AUXILIARY)
- TYPE 45 DESTROYER
- ARTFUL KEEL LAYING
- COMMAND DECK DELIVERED
- REGINA MARIA COMPLETES SEA TRIALS
- M777 FULL RATE PRODUCTION CONTRACT
- FLAGSHIP TO TRAIN NETWORK RAIL APPRENTICES
- NAVAL RECRUITING AND TRAINING AGENCY (NRTA)
- 105MM IMPROVED AMMUNITION CONTRACT
- OMC WINS A MULTI MILLION RAND CONTRACT FROM US ARMY
- DARPA CONTRACT
- US ARMY AWARDS THERMAL WEAPON SIGHT II CONTRACT
- PROVIDING BOEING 777 ACTUATOR CONTROLS
- P-3 ORION AUTOPILOT UPGRADE
- NAVAIR CONTRACT MOD
- NEXT GENERATION MARITIME RADAR CONTRACT
- AVIONICS EQUIPMENT FOR A400M
- SAAB ACQUIRES MAJORITY IN GRINTEK OF SOUTH AFRICA
- BRIMSTONE UK CUSTOMER PRODUCTION ACCEPTANCE TRIALS (PATS) COMPLETED
- STONEFISH
GENERAL NEWS
BAE SYSTEMS reaches Definitive Agreement to acquire UDI
BAE Systems announced on 7 March that it reached a definitive agreement to acquire United Defense Industries (UDI) for $4.192 billion. UDI employs 7,700 workers in the US and Sweden and generated sales of approximately $2.3 billion in 2004.
UDI is a leading producer of military vehicles in the US and develops some of the most capable land systems in the world. In addition, the acquisition further develops BAE Systems’ through-life support and services with the US Navy’s largest non-nuclear ship repair and overhaul business.
The acquisition, which is conditional upon receiving regulatory clearances and shareholder approval, is expected to close by mid-2005.
MAJOR PROGRAMME UPDATE
Nimrod MRA4
The lead development aircraft, PA01, and the second aircraft, PA02, are engaged in flight trials that will continue throughout this year. PA03, the third and final development aircraft, was towed outside for the first time in late February for a pressure test. The aircraft is now being prepared for engine ground running, prior to its maiden flight around mid-year.
Typhoon Progress
Handover of the first single seat Typhoon aircraft to the RAF is imminent. This represents a major milestone in the Typhoon Programme.
Landing Ship Dock (Auxiliary)
Outfitting, testing and inspections continue on the first BAE Systems ship, MOUNTS BAY, which has now moved from the Govan facility to the Dry Dock at Scotstoun where work will be undertaken in preparation for sea trials.
Preparations for the launch of the second BAE Systems ship, CARDIGAN BAY are well underway. The ship will be launched on 8 April.
Type 45 Destroyer
Type 45-02 in Govan now has 12 units underway, with increasing emphasis on the outfitting programme.
The Type 45 combat system programme continues broadly to schedule. The focus at present is completion of design & development and initial integration activities.
Artful Keel Laying
The First Sea Lord Admiral Sir Alan West performed the keel laying ceremony for the third Astute Class submarine Artful at Barrow on 11 March.
Command Deck Delivered
The Command Deck Module for first of class submarine Astute has been delivered from the Barrow construction hall to the new Warspite integration and test facility. There, combat systems equipment, which is being put together and tested in an Equipment Preparation Area, will be installed and integrated on the Command Deck in workshop conditions. This will make a significant contribution to de-risking the Astute programme, compared with carrying out this work on board the boat.
Regina Maria completes sea trials
Regina Maria, the second Type 22 Frigate (ex-HMS London) being regenerated by CS&S Naval for the Romanian Navy, has successfully completed her sea trials off Portsmouth. The ship will now be prepared for hand-over on 15 April.
CONTRACT AWARDS THIS MONTH
M777 Full Rate Production contract
BAE Systems has been awarded an $834 million contract for full-rate production of the M777A1 howitzer. The M777A1 is a lightweight 155mm howitzer and a critical fire support component of US Marine Air Ground Task Forces and US Army Stryker Brigade Combat Teams.
Flagship to train Network Rail apprentices
Flagship Training Limited, one of CS&S Naval's joint venture companies, has won a multi-million eight-year contract to train all Network Rail's Signal, Track and Electrical & Plant Engineering apprentices. Three-year courses for up to 200 apprentices will begin in September 2005 at HMS Sultan - home of the Royal Navy's Defence College of Electro-Mechanical Engineering. The new contract is a significant step towards establishing Flagship as the leading UK engineering technical training organisation.
Naval Recruiting and Training Agency (NRTA)
Flagship Training Limited and the Royal Navy's NRTA have agreed a multi-million expansion of their existing partnering arrangement. Flagship will expand its range of 'harmonised' services across each of the main training establishments; HMS Sultan, HMS Excellent, HMS Raleigh and Britannia Royal Naval College, along the UK's South coast.
105mm Improved Ammunition contract
BAE Systems Land Systems has won a contact from the UK MoD for the manufacture and initial supply of 105mm Improved Ammunition (IA) for the L118 105mm Light Gun. The contract will, subject to successful qualification, lead to an initial buy of 50,000 shells valued at approximately £17m.
OMC wins a multi million Rand contract from US Army
The US Army has placed a multi million Rand order on Land Systems OMC, through General Dynamics Land Systems of Canada (GDLS-C), for the supply of 148 RG-31 Mine Protected Vehicles (MPVs).
DARPA contract
Information & Electronic Warfare Systems’ (IEWS) in Nashua, N.H., has been selected by the Defense Advanced Research Projects Agency (DARPA) to convert 60 millimeter mortars into a precision-guided munitions system.
The Optically Directed Attack Munition program is a technology development and integration initiative that will demonstrate a laser-guided, low-cost optical seeker for the 60mm mortar. The program will last about 24 months and will culminate in a live fire demonstration and delivery of 1,000 mortar rounds for test and evaluation.
US Army awards Thermal Weapon Sight II contract
IEWS’ Infrared Imaging Systems (IRIS) has been awarded a second-year production contract for the Thermal Weapon Sight II (TWS II) by the U.S. Army. The contract was a modification to the existing TWS contract, calling for 4,028 weapon sights with options for 2,500 more. The contract raises the total contract value to $53 million.
The TWS gives Army infantry and U.S. Marine Corps the ability to detect and engage targets day or night and in all weather.
Providing Boeing 777 Actuator Controls
Platform Solutions will continue to provide Actuator Control Electronics (ACE) units for Boeing 777 aircraft under a new contract with Boeing. The contract calls for BAE Systems to continue supplying ACE units through 2012.
P-3 Orion Autopilot Upgrade
L-3 Communications Corp. has awarded Platform Solutions a $3 million contract to upgrade P-3 Orion autopilot systems for the Royal New Zealand Air Force. The contract calls for upgrading existing BAE Systems Digital Autopilot Systems (DAS) with a new Flight Director and a corresponding upgrade to the system’s autopilot control panel.
NAVAIR Contract Mod
BAE Systems Integrated Electronic Solutions is being awarded a $6.6 million modification to a previously awarded contract to exercise an option for engineering and technical support for Air Traffic Control and Landing Systems. The contract was awarded by the Naval Air Systems Command Aircraft Division.
INTERNATIONAL PARTNERSHIPS
Next Generation Maritime Radar contract
QinetiQ and its partners AMS and Roke Manor Research have begun work on the £8.1m contract ARTIST (Advanced Radar Technology Integrated System Test-bed). The contract, funded by the UK Ministry of Defence, is to build a research demonstrator system and assess techniques to support the next generation of maritime multifunction radar.
Avionics Equipment for A400M
Saab has received an order from Airbus for development, production and support of the High Lift Control & Monitoring System for the A400M military transport aircraft. The contract could be worth €45M, depending upon the export potential of the A400M Aircraft.
Saab acquires majority in Grintek of South Africa
South African defence and telecommunications manufacturer Grintek have accepted a proposal from SAAB AB of Sweden, for the purchase of all 166.7 million shares currently held by minority stakeholders which will bring direct foreign investment to South Africa of more than Rand 316-million. It will also lead to Grintek’s further integration with SAAB for purposes of technology investment and exchange, international marketing, and worksharing.
Brimstone UK Customer Production Acceptance Trials (PATs) completed
The PATs for the Brimstone anti-armour weapon have taken place at China Lake, California. During the PAT campaign the Customer undertook four 3-missile firings of production missiles from a Tornado GR4.
All the missiles behaved in the correct manner – no reliability or design issues were encountered. This hit rate significantly exceeded the required success criteria and provided a major confidence boost towards achieving the In Service Date at the end of March.
Stonefish
A contract worth £1.1m has been awarded by the Finnish Navy for the supply of spares for the refurbishment of the Safety & Arming Units and for replacement batteries for delivery in 2006.
