Australia's only publicly listed Homeland Security Company; Xtek Ltd has achieved a milestone by submitting an application to the Civil Aviation Safety Authority (CASA), to commercially operate both the Swift Radio Planes “Lynx M” and AeroVironment Inc. “Qube” Unmanned Aircraft Systems (UAS).
This is a significant enabler for Xtek’s commercial UAS business.
Obtaining a UAV Operator’s Certificate from CASA will allow Xtek to provide UAS services utilising Qube, Lynx M and its XTatlas™ contextual video and mapping technology.
Background on Lynx M and Qube
The Lynx M is a long endurance, small unmanned aircraft system designed for professional photomapping and research.
Lynx's design makes takeoff and landing possible from unimproved and difficult terrain. Once airborne, the aircraft flies autonomously while capturing high resolution images.
While the Qube is a small unmanned aircraft system suited to meet the needs of first responders. The packaged system fits in the trunk of a car and can be assembled and ready for flight in less than 5 minutes to provide an eye in the sky.
The vertical takeoff and landing aircraft has an unmatched 40 minutes flight endurance and hover quietly holding position and altitude.
Qube's ground control station has a tablet computer interface and by clicking on the touchscreen map directs the Qube where to go. High quality, live video is displayed on the screen with critical information provided to users.
The opportunity for Xtek in the commercial UAS markets is a significant one, a multi-million dollar market opportunity over the period 2016-2020.
In February 2016, the company submitted responses to the Australian Army tenders for Land 129 Phase 4 - the acquisition and through life support tenders for 78 Small Unmanned Aircraft Systems.
Through life support includes training, repair and spares support post acquisition. Subject to selection, Government funding approval and successful contract negotiation, contracts for these tenders are scheduled to commence in FY17.
Xtek has also been selected as the preferred tenderer for the supply of tactical/bomb response equipment to a Government client.
Contracts, potentially over $1 million, from these acquisitions are expected in FY17, subject to Government funding approval and successful contract negotiation.
Xtek has two cutting-edge innovations with large and global addressable markets: the XTclave™ patented process to create advanced ballistic protection laminates and lightweight structural composites.
The second is the XTatlas™ with unique contextual real-time mapping solution currently under development.
Price catalysts ahead
There are two potential company-making milestones in next six months:
- Commercialization of XTatlas™ and validation of XTclave™ technology by US Department of Defence
- Both the XTatlas™ and XTclave™ have significant global applications.
FY15 was an Inflection Point for Xtek with improving revenue and profitability. Revenue for FY15 was $12 million, compared to $5.3 million in FY14 and with no debt.
There is significant potential for future UAS sales in Australia.
With the milestones ahead, we would expect a stock re-rating over next six months from the current price of $0.43.
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