As companies take on more ambitious endeavors, be it diving under the sea or exploring natural gas hidden deep beneath the surface, communication becomes more and more integral. But remote connectivity is no cakewalk, which is where remote tech provider companies like Harvest Technology Group (ASX: HTG) come into play.
The Perth-based Company, which provides real-time monitoring, communication, automation and more, has clinched a significant deal with a Five Eyes defence customer (with Five Eyes comprising Australia, New Zealand, the UK, the US and Canada), marking a major milestone for the company. The initial order, valued at approximately $272k (US$180k), is specifically for the deployment of Harvest’s groundbreaking Nodestream™ technology. This solution will serve as a vital component in supporting the customer’s remote operations and communication systems.
Nodestream technology, developed by Harvest, has garnered widespread acclaim for its ability to deliver superior performance even in low-bandwidth environments, all while ensuring stringent security measures. Users can transfer video, audio and other data no matter the quality of their network. The implementation of this technology reinforces Harvest’s reputation as a trusted provider of reliable and ultra-secure communication solutions, especially in sensitive and remote locations.
That is probably what led to its employment by defence companies. Under Harvest’s standard terms and conditions, the delivery of the initial order is expected to take place in July 2023, accompanied by the receipt of funds. This lucrative contract is considered a material opportunity by HTG, representing the Company’s first order from a potentially significant defence customer. With the prospect of future expansion, Harvest is poised to capitalise on this newfound relationship.
While this achievement underscores the growing presence of Harvest’s technology in the defence sector, it does not guarantee subsequent orders beyond the initial one.
Looking back at the performance of Harvest Technology Group Limited in the March quarter of 2023, the Company experienced some setbacks due to project delays. But the revenue generated over the past twelve months, ending on March 31, 2023, surpassed $3 million, reflecting a notable increase of 44.9% compared to the previous corresponding period. Although the quarterly revenue for the March quarter amounted to $653k, representing a decline of 8.6% year-on-year and a substantial 32.3% decrease from the remarkable growth recorded in the December quarter.
Besides the defence contract, the Company also finalised a global reseller agreement with Applied Satellite Technology Group (AST) in mid-June 2023. This partnership presents an opportunity for Harvest to tap into new business avenues and capitalise on emerging prospects in the industry. As per the terms of the agreement, the contract becomes legally binding without any additional conditions, although confidentiality obligations prevent Harvest from disclosing the specifics of the counterparty at this time.
In FY23, the Company witnessed many contract renewals, including UK-based oil company TechnipFMC, Japan-based oil company Inpex and Australia-based geo data specialist Fugro among others. It’s also in talks with companies from Saudi Arabia and Singapore, following the restructuring of its global sales team. As it onboards new customers worldwide and works on retaining existing ones, the Five Eyes defence customer agreement validates its skill and strategies.
Alinda is a Business Reporter for The Sentiment
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