Quickstep transitions to next phase of multi-year production orders with major contracts

Aerospace and defence services company Quickstep Holdings (ASX: QHL) announced significant progress in its long-term agreements with aerospace and defence companies Northrop Grumman, Lockheed Martin and Marand. Over the coming months, the Company is transitioning into the next phase of multi-year production orders under these agreements, signalling sustained business prospects.

Quickstep is a global manufacturer specialising in solutions for defence, commercial aerospace, and advanced industrial sectors. It operates through three primary segments: Aerostructures, Aftermarket, and Applied Composites. The Company is currently focusing on the F-35 program, where it has been aligning its production schedules. 

Quickstep is an approved supplier for the international F-35 Lightning II Joint Strike Fighter (JSF) program – a military aerospace program supplying more than 30 individual components with content on every aircraft produced.

The F-35 program is reaching the midpoint of its initial volume buildout, and Quickstep is set to commence production on Lots 18 to 20. Through a ‘level-loaded’ schedule, Quickstep will maintain a consistent production volume from FY25 to FY27.

That said, overall demand for F35 components is expected to be approximately 8% lower than average over the FY23/FY24 period. However, Quickstep’s operating model aims to ensure that program margins remain consistent despite this lower demand.

Additionally, Quickstep’s contract for C-130 wing flap components will begin a new period in mid-FY25 and extend through FY29. The Company will supply 20 ship sets of components annually, matching the current demand and further benefiting from its improved operating model to enhance margins.

In the nine months up to FY24, Quickstep recorded customer receipts of $28.1 million, with a cash balance of $6.9 million. It also received a follow-on order for 20 Volanti aircraft valued at approximately $430,000. This is in addition to the $1.35 million 40-unit order announced in March, which was delivered complete in early June. 

Thanks to major customer interest, the Company and its partners have received a request from a foreign military customer to undertake overseas trials of the Volanti aircraft in this build configuration.

In support of its expansion into the space sector, Quickstep has finalised a $925,000 space grant from the Commonwealth Department of Science, Industry & Resources (DSIR) under the Moon to Mars initiative. This grant, part of a $1.3 million development program, will fund the acquisition of a large-scale CNC router/3D printer, enhancing Quickstep’s capabilities in rapid prototyping and low-rate initial production of complex composite structures.

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Alinda Gupta

Alinda is a Business Reporter for The Sentiment

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