Major conflicts in Israel and the Ukraine are tearing nations apart but for ballistics defence company XTEK (ASX: XTE), someone needs to offer protection to the people involved and if that means lacing them up in high-end ballistic body armour products, they’re happy to do it.
Some might call it a coincidence but since Russia’s invasion of Ukraine in 2022, XTEK’s body armour business has seen a big uplift in sales, which have again been sparked by the 2023 Israeli–Palestinian conflict.
The latest orders come as a $4.1 million order from the Australian Department of Defence and a $2.8 million order from an undisclosed international customer. The request of XTEK customers not to have their name disclosed has become an increasing trend in their announcements as to reduce any controversy of supplying defence equipment in situations that may fuel conflict.
While XTEK has no direct control over the use of their HighCom body armour, which is primarily manufactured in the United States, global conflicts and gun violence in the US has solidified XTEK’s position in the global defence market.
“XTEK’s global armour business, HighCom, continues to win material new orders from militaries, law enforcement, and first responder customers all around the world, for its ultralightweight and high-performance specialist ballistic armour products and solutions,” said XTEK CEO, Scott Basham.
“This order, from an undisclosed international customer, which is valued at $2.8m, is a testament to the hard work and professionalism of our US and International teams, who continue to be highly engaged with customers in global hotspots who are seeking to rapidly acquire large quantities of advanced high-end body armour.
“The many thousands of individual items included in this order will be shipped to the end user in multiple batches, with the first coming initially from inventory, and then the remainder being produced over the coming weeks.”
The surge in demand for defence equipment, including advanced ballistic armour and unmanned aerial systems, can be attributed to escalating global conflicts and an increased focus on national security. The unpredictability of geopolitical landscapes and the persistent threat of terrorism have led governments and security forces worldwide to invest heavily in cutting-edge defence technologies.
XTEK’s recent success reflects the Company’s ability to meet the evolving needs of military and law enforcement agencies worldwide.
In FY23, XTEK reported $89.4 million revenue which represented a 53.7% increase on the previous year. The Company delivered $6.1 million in net profit after tax, an increase on the previous year’s $5.7m.
Pending shareholder approval at their upcoming Annual General Meeting on 23 November 2023, XTEK intends to change its name to HighCom Limited (ASX: HCL) with its ballistics division to be HighCom Armor and its drones division to be HighCom Technology.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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