XTEK Ltd (ASX:XTE) is well positioned for rapid near-term revenue growth in 2018 after finishing the 2017 calendar year with record orders in hand of $42 million, the highest in the history of the company.
XTEK had achieved record revenue for the half-year ended 31 December 2017, partly driven by the supply of Explosive Ordinance Disposal (EOD) robots.
This strong order book underpins management’s robust growth expectations with the company on track to achieve revenue guidance of between $11 million and $18 million for FY2018.
XTEK is at an inflection point as it accelerates the commercialisation of more than 10 years of research and development investment and is well positioned for further growth.
Proprietary defence equipment and re-seller businesses
XTEK has achieved contract success in the Australian and overseas homeland security markets with its proprietary defence equipment being well sought after.
This was highlighted by the first European purchase order for its personal Small Arms Protective Insert (SAPI) plates in December 2017.
XTEK’s re-seller business focuses on three main sectors; Unmanned Aerial Systems (UAS), tactical weapons & protection, and EOD robots.
The company is also making strong progress towards the commercialisation of its in-house XTclave advanced lightweight hard armour plate solutions.
New orders from the Australian Defence Force
During the December 2017 quarter, XTEK received a circa $2.4 million purchase order from the Australian Defence Force (ADF).
The contract was awarded under a project for XTEK to supply x-ray and forensics equipment and consumables to the ADF.
$100+ million potential sales to the Australian Defence Force
In July 2017, the ADF revealed a $101 million investment in a new SUAS (small unmanned aerial system) capability through XTEK.
For XTEK, this represents initial sales revenue of over $40 million and potential maintenance revenue of up to $9 million per annum for 5 to 7 years following delivery.
The company remains on track to deliver the initial range of SUAS to the ADF by July 2018.
Well-funded for future growth
XTEK’s balance sheet remains strong with the company debt free and holding circa $4.5 million in cash as at February 21, 2018.
The company is led by managing director Philippe Odouard who turned Quickstep Holdings Ltd (ASX:QHL) from a technology start-up in advanced composite manufacturing to a profitable company involving large contracts with Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC) and BAE Systems (LON:BA).
XTEK is well placed to secure further contract wins for the remainder of FY2018, supplying defence equipment and tactical weapons for the ADF and other law enforcement agencies.