JPATS wins helps build optimism at Smiths
SMITHS INDUSTRIES, revealing another set of healthy half-year results, underlined its growing confidence in the gathering pace of recovery in its aerospace business with the announcement of an avionics order potentially worth $100 million for the US Army and Navy Joint Primary Aircraft Training System (JPATS).
Smiths says that the initial JPATS order, which covers a package of cockpit instrumentation for the first batch of 141 aircraft, will be worth $23 million. The UK avionics company expects, that to mushroom as deliveries of the Raytheon Aircraft trainer climb, to 711 over the next 20 years.
The order supports a growing optimism within Smiths that the worst of the US defence decline is over. Group chairman Sir Roger Hurn forecasts that spending "...has reached the bottom", suggesting that US military-aircraft procurement will average $15-20 billion over the next ten years.
That is still down from a peak of more than $50 billion a decade ago, but Hurn adds that avionics will grow proportionally to around half of the expenditure.
A "surge" in orders for the Boeing 737 and 777 programmes on which Smiths has strong positions has also added to the company's confidence.
The benefit has yet to make a major impact in the business' financial performance. The results for the first half of the financial year to the end of January showed aerospace revenues marginally down at £171 million ($260 million), with a "modest, but re-assuring" improvement in profits, to £17 million, thanks to early cost-cutting.
Smiths, has spent the past few years, building its medical and industrial divisions, with a series of major acquisitions.
Hurn says that the group plans to be a "player" in pending restructuring in the UK and Europe, but stresses that the group sees no urgency to grow.
Source: Flight International