Continuing a hectic few months of purchases with US gun control controversy in the background, defence and armour specialist XTEK (ASX: XTE) have received a $2.7m purchase order from a US Federal Government Agency customer, for products from its HighCom Armour Solutions business.
The items requested in the order include thousands of specialist body armour and ballistic helmet equipment, with completed delivery expected before the end of September 2022.
XTEK’s HighCom Armour Solutions business solely focuses on designing and manufacturing advanced personal ballistic products that are ultra light-weight and high performing.
HighCom will spend the next few months preparing orders in tranches to be shipped out to the customer, where they have stated that the amour provided has been heavily tested to ensure customer satisfaction. The tests undertaken range across a series of scenarios to determine the product’s durability, reliability and usefulness before final shipment.
“This order, valued at A$2.7m, and comprising many thousands of individual items, will be built, shipped, and delivered from our Columbus OH facility, to this important US Federal Government Agency in the coming weeks, and will be completed in full before the end of September, with revenue recognised in Q1 2023,” said XTEK Group CEO,Scott Basham.
“This multi-million dollar order continues the cracking start to the new financial year for the group, with us having already recognised US$11 million (A$15.6 million) so far in Q1.”
This Government agency order follows an earlier purchase in May 2022 worth $46.8 million to an undisclosed international customer. While the specific details of the order remain confidential, it is said that the customer requires similar equipment and armour as the US Govt order, requesting tens of thousands of individual advance ballistic protection items.
It may be worth noting that prior to the infamous Texas School shooting in Uvalde, demand for bulletproof vests was stagnant but has since seen an uptick in purchases across both the US and internationally. At the same time, the subsequent push for increased protection has hugely benefited XTEK as governments and law-enforcement agencies move to beef up their armour inventories.
These two purchase orders are part of seven large orders this year from undisclosed customers. Given the ongoing uncertainty of the current heightened global security environment, the Group continues to fill large orders to meet customer demands, as they don’t believe there will be any reduction in demand in the foreseeable future.
Following these orders, the Group’s total bookings have eclipsed over $100.2 million in orders since 1 March 2022, and the Ballistics division, in particular, has received orders totalling over $92.8 million to be supplied to local and international customers in the coming months.
While XTE shares have remained flat following this news, it is still carrying heavy momentum from the start of March that has seen the share price climb over 110% from $0.19 to sit at $0.405 at the time of writing.
*All dollar amounts listed are in AUD unless stated otherwise.
Trading Desk Assistant at Emerald Financial
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