viewXTEK Ltd

XTEK secures additional A$2.8 million SUAS purchase order from Australian Defence Force

The new order is in addition to the company’s ongoing Small Unmanned Aerial Systems (SUAS) supply contract.

XTEK Ltd - Xtek receives A$2.8 million purchase order from the Australian Defence Force
Delivery of the new order is expected in the current financial year

XTEK Ltd (ASX:XTE) has received an additional purchase order from the Australian Defence Force (ADF) for the supply of additional AeroVironment WASP AE Small Unmanned Aerial Systems (SUAS).

The order, which is worth around A$2.8 million, is in addition to XTEK's ongoing SUAS supply contract to the ADF and represents XTEK’s strong and continued relationship with the ADF.

Delivery of the new purchase order is anticipated in FY2021.

Shares have been as much as 8% higher to 88 cents intra-day and have been climbing since closing at 39.5 cents on March 23.

“SUAS supplier of choice”

XTEK managing director Philippe Odouard said the order represented XTEK’s strong and continued relationship with the ADF.

He said: “The supply and maintenance of SUAS remains an ongoing focus for XTEK.

“Our SUAS business underpins our increasing revenue, with recurring attributes.

“In addition, our facility in Canberra is in full operation providing critical repair and maintenance services to support the ADF’s growing SUAS fleet.

“We are the full-service SUAS supplier of choice for the ADF and look forward to continued servicing of our Defence Force.”

Ongoing revenue

The company has a strong relationship with the ADF, with more than 50 AeroVironment WASP AE SUAS delivered to date and more SUAS scheduled for delivery in the near-term.

Under the long-term support contract secured in September 2019, XTEK has delivered around A$8 million in FY20.

The current contract expires on July 1, 2022, with multiple options to extend in one-year blocks until 2025.

Future support potential

XTEK’s key support services consist of providing spare parts, training, maintenance and repairs including installation of spare parts, electronics and composite materials of the SUAS itself.

As the ADF’s SUAS fleet continues to grow, XTEK is well placed to capture additional support revenue underpinned by the existing contracts with the ADF for additional SUAS supply, spare parts and maintenance.

Further potential sales are expected as the ADF explores and develops innovative applications to employ SUAS in the field.

Quick facts: XTEK Ltd

Price: 0.56 AUD

Market: ASX
Market Cap: $39.67 m

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