Activist investor pushes AeroVironment onto defensive

London
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This story is sourced from Flight International
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Unmanned systems and electric vehicle recharging equipment maker AeroVironment was forced on the defensive on 17 July by an activist investor that has accumulated a sizeable chunk of the company's shareholding.

Engaged Capital, which has spent some $25 million to build up a 5% stake, is thought to want to pressure the company to put its healthy cash balance into growth investment - especially to reduce its reliance on US military spending.

AeroVironment says it "welcomes open communications with all of its stockholders and values their input" and adds: "We will continue to take actions that we believe enable us to achieve this objective."

In its year to 30 April, AeroVironment's pre-tax profit slumped by three-quarters to $10.4 million as revenue fell by more than a quarter to $240.2 million. In its dominant unmanned systems division, revenue was down 28% to $194.3 million and segment gross profit dropped by 32% to $79.1 million.

The company attributed the performance to "government contracting delays for unmanned aircraft systems, combined with lower than expected electric vehicle adoption rates".

For its year to end-April 2014, AeroVironment is forecasting revenue on a par with last year.