Activity type factsheet 2021/22: Provide and maintain
Updated 15 March 2022
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Under the Defence Reform Act 2014, the SSRO must provide the Secretary of State with its assessment of the appropriate rates used to determine the contract profit rate for pricing qualifying defence contracts and qualifying sub-contracts. Part of the methodology is the categorisation of comparator companies in to four activity types.
- Develop and Make
- Provide and Maintain
- Ancillary Services
- Construction
The results of these groups are separately analysed and this fact sheet describes the Provide and Maintain group. The baseline profit rate combines results from “Develop and Make” and “Provide and Maintain”, as set out in the Recommendation Factsheet. For further information on the methodology used to calculate these rates please see the Single Source baseline profit rate, capital servicing rates and funding adjustment methodology.
Provide and maintain
Companies undertaking comparable activities considered as ‘provide and maintain’ are expected to deliver services to ensure the availability of an asset either through repair and servicing to third party equipment, or through hire or lease arrangements that include associated upkeep and maintenance services.
Profit on cost of production
| 2017/18 | 2018/19 | 2019/20 | 2020/21 | 2021/22 | |
|---|---|---|---|---|---|
| Underlying rate (unadjusted for capital servicing) | 8.78% | 9.75% | 10.93% | 9.92% | 9.90% |
| Capital servicing adjustment | -2.67% | -1.55% | -1.79% | -2.15% | -1.65% |
| Underlying rate | 6.11% | 8.20% | 9.14% | 7.77% | 8.25% |
| Three-year rolling average | 7.53% | 6.97% | 7.82% | 8.37% | 8.39% |
Note: The capital servicing adjustment accounts, at an aggregate level, for different levels of capital employed across the companies in the index and so sets a baseline upon which step 6 of the contract profit rate applies. The pre-2017/18 underlying rates used for the three-year average were: 2016/17: 6.60%; 2015/16 (calculated using the Review Board’s methodology): 9.88%.
Data sources
For further information on the data selection approach please see section 7 of the Single Source baseline profit rate, capital servicing rates and funding adjustment methodology. A company update search of the Orbis database was carried out on 5 November 2020 on data update number 202001 using software version 202. The financial data for the calculation was extracted from Orbis at the same time.
Median capital servicing adjusted return on cost of production
Proportion of Companies by country
Proportion of companies with defence keyword
Supplementary statistics
| Number of companies | 57 |
|---|---|
| of which profit making | 50 |
| Aggregate turnover | £86 |
| Total capital employed (CE) | £43 |
| Average company CP:CE ratio | 1.79 |
Source: Orbis (Cash figures shown in GBP Billions)
Names of companies in the index
| AAR Corp | Gama Aviation PLC | Saltire Energy Limited |
| AB Transitio | GAP Holdings Limited | Science Applications International Corp |
| Aggreko PLC | Gatx Corp | Signature Aviation PLC |
| ALC (Superholdco) Limited | GO Plant Fleet Services LTD | Snc-Lavalin Group INC * |
| Applus Services, S.A. | H&E Equipment Services, Inc. | Speedy Hire PLC |
| Archrock, Inc. | Indra Sistemas SA | Sureserve Group PLC |
| Ashtead Group PLC | Insta Group Oy | Team INC * |
| Atlas AIR Worldwide Holdings, Inc. | Jacobs Engineering Group INC | Total Energy Services Inc. * |
| Babcock & Wilcox Enterprises, Inc. | Kbr, Inc. | United Rentals INC |
| Babcock International Group PLC * | KIS Partners AS | VMS (Holdings) Limited |
| Burkhalter Holding AG | Leidos Holdings, Inc. | VSE Corp |
| Byggesystemer Norge AS | Mcgrath Rentcorp | Westinghouse AIR Brake Technologies Corp |
| CAE INC | Moen-Gruppen AS | Williams Shipping Holdings Limited |
| CAI International INC | MTU Aero Engines AG (J) | Willis Lease Finance Corp |
| Cowles Holdings Limited | Muehlhan AG | Wood Group (John) PLC |
| Dawsongroup PLC | Natural GAS Services Group, Inc. * | |
| Dublin Aerospace Limited | Oceaneering International INC * (J) | |
| DXP Enterprises INC | Pekkaniska Group Oy | |
| Electromecanica Naval E Industrial SA | Renew Holdings PLC | |
| Finning International INC | RWG (Repair & Overhauls) Limited | |
| Fisher (James) & Sons PLC | Ryder System INC * |
‘*’ Indicates that the company is a loss-maker in the year. The data for loss-makers are not included in the 2021/22 assessment, but the companies will be taken forward for consideration next year.
(J) indicates a company which was not in the activity group last year, but has been added this year.