Activity type factsheet 2024/25: Develop and make
Published 18 March 2024
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This publication is available at https://www.gov.uk/government/publications/2024-contract-profit-rate-assessment/activity-type-factsheet-202425-develop-and-make
Develop and Make
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 into five activity types.
- Develop and Make
- Provide and Maintain
- Ancillary Services
- Construction
- Information Technology Services
The results of these groups are separately analysed and this fact sheet describes the Develop and Make group results.
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.
Develop and make
Companies undertaking comparable activities considered as ‘Develop and Make’ are expected to engage in manufacturing and the design and development contributing to that process. This would therefore not include manufacturing on behalf of a hiring firm that supplies the design, or those solely undertaking research or design work with no associated manufacturing. Where development activities do not seek to result in a novel or differentiated product the company is less likely to be considered comparable.
Profit on cost of production
| 2020/21 | 2021/22 | 2022/23 | 2023/24 | 2024/25 | |
|---|---|---|---|---|---|
| Underlying rate (unadjusted for capital servicing) | 9.67% | 9.28% | 9.45% | 9.80% | 9.76% |
| Capital servicing adjustment | -0.98% | -1.15% | -0.77% | -0.64% | -1.41% |
| Underlying rate | 8.69% | 8.13% | 8.68% | 9.16% | 8.35% |
| Rolling average* | 8.07% | 8.23% | 8.34% | 8.66% | 8.55% |
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.
‘*’ A four-year average was used for 2022/23; a three-year average for pre-2022/23 and a three-year average (excluding 2022/23 underlying rate) for 2023/24 and 2024/25.
The pre-2020/21 underlying rates used for the three-year average were: 2018/19: 7.67% and 2019/20: 7.86%
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[1] was carried out on 1 November 2023 on data update number 342001 using software version 342. 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 | 247 |
| of which profit making | 203 |
| Aggregate turnover (£billions) | £1,096 |
| Total capital employed (CE) (£billions) | £266 |
| Average company CP:CE ratio | 3.68 |
Source: Orbis (Cash figures shown in rounded GBP Billions)
Names of companies in the index
| Aaon INC |
| AB Volvo |
| Accuracy International Limited |
| Advanced Mechanical and Optical Systems * |
| Aerovironment, Inc. * |
| Aguirre Maquinaria Agricola SL. |
| AIR Industries Group * |
| Airbus SE |
| Alamo Group INC |
| Alimak Group AB |
| Allient INC |
| Allison Transmission Holdings, Inc. |
| Alstom S.A * |
| American Axle & Manufacturing Hldngs INC |
| Ametek INC |
| Amtech Systems INC |
| Analog Devices INC |
| Andritz AG |
| Aptiv PLC |
| Astec Industries INC |
| Astronics Corporation * |
| Astronova, Inc. |
| Athader SL |
| Atlas Copco AB |
| ATS Corporation |
| Aumann AG * |
| Autoliv, Inc. |
| Avant Tecno Oy |
| Avon Protection PLC * (J) |
| Axcelis Technologies INC |
| Axon Enterprise, Inc. |
| Azkoyen SA |
| BAE Systems PLC |
| Bailey Trailers Limited |
| Barco NV |
| Barnes Group INC |
| Binder + Co AG |
| Bittium OYJ * |
| BK Technologies Corporation * |
| Blue Bird Corporation * |
| BMI Trailers Limited |
| Boeing Company (The) * |
| Broadwind, Inc. * |
| Bruker Corporation |
| Brunvoll Holding AS |
| BWX Technologies Inc. |
| Caci International INC |
| Cactus, Inc. |
| Carver Group Limited |
| Castledon LTD |
| Caterpillar INC |
| Ceco Environmental Corp. |
| CGG |
| Chart Industries INC |
| Chemring Group PLC |
| Circor International INC (J) |
| CMZ Machine Tool Manufacturer Sociedad Limitada. |
| CNH Industrial N.V |
| Cognex Corp |
| Coherent Corp |
| Cohort PLC |
| Colosio S.R.L. |
| Columbus Mckinnon Corp |
| Commercial Vehicle Group, Inc. |
| Comtech Telecommunications Corp * |
| Construcciones Y Auxiliar de Ferrocarriles, S.A. |
| Continental AG |
| CPI Aerostructures INC |
| CTA International SAS |
| CTT Systems AB |
| Cummins Inc. |
| Curtiss Wright Corp |
| D.R.A. LTD |
| Data I/O Corp * |
| David Ritchie (Implements) Limited |
| de Lorenzo S.P.A. |
| Deere & CO |
| Deutz AG |
| Douglas Dynamics, Inc. |
| Dril-Quip INC * |
| Ducommun INC |
| Duerr AG |
| Electromecanica Naval E Industrial SA * |
| Energy Recovery, Inc. |
| Enerpac Tool Group Corp |
| Espey MFG and Electronics Corp |
| EVS Broadcast Equipment SA |
| Fabricacion de Elevadores SL * |
| Fabrications Mecaniques de l’Atlantique * |
| Faro Technologies INC * |
| Federal Signal Corp |
| Filtronic PLC |
| Forvia SE |
| Frigoveneta S.P.A. |
| Frumecar SL |
| G.H.B. (Holding) Limited |
| Genasys Inc. * |
| Gencor Industries, Inc. |
| General Dynamics Corp |
| General Electric Company |
| Gentex Corp |
| Gesellschaft fuer Oeltechnik mit beschraenkter Haftung |
| Gorman-Rupp Company (The) |
| Graco INC |
| Graham Corp |
| Greenbrier Companies, Inc. (The) |
| Guzzetti S.P.A. * |
| Heico Corp |
| Heidelberger Druckmaschinen AG |
| Heroux-Devtek INC |
| Hexcel Corp |
| Hiden Instruments Limited |
| Honeywell International INC |
| Huntington Ingalls Industries, Inc. |
| Idex Corp |
| IMI PLC |
| Industrias Montanesas Electricas Mecanicas SL |
| Inficon Holding AG |
| Ingersoll Rand Inc. |
| Innovative Solutions & Support INC |
| Interroll Holding AG |
| IPG Photonics Corporation |
| Istobal SA |
| Italcab S.P.A. * |
| John Bean Technologies Corp |
| Jost Werke AG |
| Judges Scientific PLC |
| Kadant INC |
| Kaman Corp * |
| Katsa Oy |
| Kesla OYJ * |
| Keysight Technologies, Inc. |
| Klingelnberg AG |
| Koenig UND Bauer AG |
| Komax Holding AG |
| Konecranes OYJ |
| Kratos Defense and Security Solutins INC * |
| L3harris Technologies, Inc. |
| LAM Research Corp |
| Leonardo S.P.A. |
| Lillbacka Powerco Oy * |
| Linamar Corporation |
| Lockheed Martin Corp |
| Lombardi Converting Machinery S.P.A. * |
| Magna International INC |
| Manitex International, Inc. |
| Manitou BF |
| Manitowoc Company, Inc. (The) * |
| Marel HF |
| Mariani S.R.L. |
| Maschinenfabrik Berthold Hermle AG |
| MAX Automation SE |
| Mecapack |
| Mercury Systems INC |
| Mikron Holding AG |
| Miller Industries INC |
| MKS Instruments INC |
| Modine Manufacturing CO |
| Moog INC |
| Motorola Solutions, Inc. |
| Mpac Group PLC * |
| MS International PLC |
| Nammo AS |
| NC Engineering (Hamiltonsbawn) Limited * |
| NFI Group Inc. * |
| NG Bailey Group Limited * |
| Nordson Corp |
| Northrop Grumman Corporation |
| NOV INC |
| Novanta INC |
| Nuova Idropress - Societa’ PER Azioni IN Forma Abbreviata NIP S.P.A. |
| NVE Corporation |
| Officina Bocedi SRL |
| Officina Meccanica F.Lli Tabarelli S.P.A. |
| Onto Innovation Inc. |
| Oshkosh Corporation |
| Oxford Instruments PLC |
| Oy El-Ho Ab |
| Paccar INC |
| Park Aerospace Corp. |
| Paul Mueller Company |
| Petards Group PLC |
| Pietro Fiorentini S.P.A. |
| Ponsse OYJ |
| Portsmouth Aviation Holdings Limited |
| Powell Industries INC |
| Presses et Cisailles Lefort * |
| PSM Projekt System & Management Gmbh |
| PVA Tepla AG |
| Qinetiq Group PLC |
| Raute OYJ * |
| Renishaw PLC |
| REV Group, Inc. |
| Rheinmetall AG |
| Robson Handling Technology Limited * |
| Rockwell Automation, Inc. |
| Rohde & Schwarz GmbH & Co. Kommanditgesellschaft |
| Rolls-Royce Holdings PLC |
| RTX Corp |
| Saab AB |
| Saalasti Oy |
| Safran |
| Salmoiraghi S.P.A. |
| SC Group-Global Limited |
| Schlatter Industries AG |
| Schmitt - Elevadores, LDA |
| Servotronics INC * |
| Servovalve S.P.A. * |
| Siemens AG |
| Skako A/S |
| Smiths Group PLC |
| Spirit Aerosystems Holdings, Inc. * |
| Star Refrigeration Limited * |
| Systemair AB |
| TAI Milano S.P.A. |
| Taylor Devices INC |
| Teagle Holdings Limited * |
| Teledyne Technologies Incorporated |
| Tennant CO |
| Teradyne INC |
| Terex Corp |
| Tesmec SPA |
| Textron INC |
| Thales |
| THE Shyft Group, Inc. |
| Thwaites Limited |
| Thyssenkrupp AG |
| Tiber Pack S.P.A. |
| Tomra Systems ASA |
| Tornado Global Hydrovacs Ltd. |
| Trakm8 Holdings PLC * |
| Transdigm Group Incorporated (J) |
| Trinity Industries INC |
| Triumph Group INC |
| Tronrud Engineering AS |
| TTM Technologies INC |
| Twin Disc INC |
| Vaisala OYJ |
| Veeco Instruments INC |
| Vicinity Motor Corp. * |
| Wabash National Corp |
| Wacker Neuson SE |
| Wartsila OYJ * (J) |
| Washtec AG |
| Wilton Universal Group Limited * |
| Woodward, Inc. |
| Xylem Inc. |
‘*’ Indicates that the company is a loss-maker in the year.
(J) indicates a company which was not in the group last year but has been added this year.