- XTEK has revealed some more details today regarding yesterday’s long-term contract with the Australian Defence Force
- XTEK signed up to provide a range of supply and service support activities for the Defence Force’s Small Unmanned Aerial Systems (SUAS)
- The company explained today that the contract is worth roughly $5 million per year for a potential seven years — bringing its total potential value to $35 million
- Today, XTEK shares are up 4.29 per cent and trading at a decade-long high of $0.73 apiece
Defence product company XTEK has revealed some more details today regarding yesterday’s new long-term contract with the Australian Defence Force.
Under the contract, XTEK signed up to provide a range of supply and service support activities for the Defence Force’s Small Unmanned Aerial Systems (SUAS). Essentially, these are military aircraft operated from remote ground stations, negating the need for a pilot.
Yesterday, XTEK provided some details for the largest $10.07 million commitment as part of this contract, and said further announcements will be made in the coming years.
And today, the company wasted no time in bringing out its first new announcement for this contract.
XTEK explained how overall, the contract is expected to bring in roughly $5 million of revenue per year, and will last for an initial three year term with options to extend until 2026. As such, should the contract go for the full seven years, it will effectively be worth $35 million.
XTEK Managing Director Phillipe Odouard said this contract, which follows the company’s recent installation of a repair and maintenance facility in Canberra, represents guaranteed support work over the medium and long term.
“We are a full-service SUAS supplier, with the ability to provide training, spares, repairs and ongoing maintenance services,” Philippe said.
“This is a significant contract win for our business to support the ADF’s growing SUAS fleet,” he said.
As part of this growing fleet, 59 WASP SUAS models, which are developed by American AeroVironment, have been delivered to date. Another 20 WASP systems are expected to be delivered in 2020.
XTEK’s support services for these products will consist of spare parts, training, maintenance and repairs, and installation of spare parts and composite materials.
XTEK management said most of the contract will be completed in Australia except for the original equipment manager (OEM) parts coming from AeroVironment in the U.S.
XTEK shares are continuing to rise in the face of this new contract, currently up 4.29 per cent and trading at a decade-long high of $0.73 apiece. XTEK’s market cap is valued at $35.58 million.