Australian counterdrone solutions company DroneShield (ASX: DRO) has been awarded a two-year research and development contract worth $9.9 million by the Five Eyes Department of Defence (DoD). This substantial contract highlights DroneShield’s growing prominence in the defence industry and signifies the confidence placed in the Company’s capabilities by the Five Eyes intelligence alliance, comprising the United States, Canada, United Kingdom, Australia and New Zealand.
Following the successful completion of a $3.8 million contract with the DoD, DroneShield is set to receive a final milestone payment this month.
The CEO of DroneShield, Oleg Vornik, said, “Follow-on contracts are the ultimate customer measure of our performance. As an Australian sovereign industrial capability business, DroneShield is proud and pleased to continue undertaking multi-year contracts of increasing size with this customer.”
With the delivery and payment completion of an $11 million contract announced in December, DroneShield is now focusing on fulfilling the second $11 million order, scheduled for delivery later this year. This most recent $9.9 million contract represents the largest long-term agreement in DroneShield’s history and solidifies its financial stability over the next two years. Furthermore, it opens the door for more substantial contracts in the future.
DroneShield has been making progress in manufacturing, operations and inventory scale-up to accommodate the expected surge in demand throughout 2023. In line with this growth, the Company is in the process of finalising a larger industrial site to relocate its Sydney operations, enabling further expansion.
DroneShield’s success is not limited to the defence and intelligence sectors; the Company has also made significant inroads with critical infrastructure plants, airports and other civilian customers. DroneShield has positioned itself advantageously to tap into the rising demand for counterdrone and counter-unmanned aircraft system (C-UAS) equipment.
The recent events in Ukraine have further underscored the role of drones in modern warfare and have prompted governments worldwide to bolster their defence and security budgets, resulting in a record number of opportunities for DroneShield.
Vornik added, “In the current uncertain geopolitical environment, there is a significant focus by the Five Eyes Governments to procure from defence industrial capability champions within their network of countries. Having deep engineering and research capability, TRL9 products and a track record of working with Defence, places DroneShield in a favourable position for ongoing work.”
DroneShield’s strong financial performance is evident in its cash receipts, with a remarkable $7 million generated in the first quarter of CY23. The company is on track to achieve another record-breaking quarter in the second quarter of 2023.
Five Eyes, too, seems to have rolled up its sleeves to become more equipped on the warfare front. Recently, a Five Eyes customer inked a $272k deal with remote tech provider Harvest Tech (ASX: HTG) to help boost connectivity in remote environments.
- Auswide Bank sees NPAT decline by over 45% in the face of tough competition - February 26, 2024
- No discount? No deal: Value-oriented customers leave Adairs in the lurch - February 26, 2024
- Devastating storms and cancellations see Coast Entertainment’s earnings decline - February 23, 2024