DroneShield shares surge on quarterly update
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The news: DroneShield shares soared following the company's latest business update and March quarterly figures.
The numbers: Shares in DroneShield were up 12.28% to $0.96 by 2:52pm AEDT.
Investors cheered after the drone defence company announced its first quarter revenues of $16.4 million were 10 times higher year on year.
At the end of March, the company had a cash balance of $56.4 million with no debt or convertibles. It noted it had a committed supply chain payment for inventory of $35.4 million over the next nine months.
DroneShield also said it had $27 million in contracted backlog and a pipeline of $519 million in sales.
The company said it had an inventory book value of $24 million, up from $19 million at the end of December 2023, and a current manufacturing capacity of $400 million per annum.
Last month, DroneShield announced it had secured a $4.3 million contract with the US government.
The context: DroneShield said it was currently operating in a favourable environment with rapidly rising counterdrone, defence and security spending globally.
It said small drones continued to be used extensively in virtually every conflict around the world and that this was expected to rapidly rise as the drone technology continued to improve and geopolitics and conflicts were expected to further deteriorate.
While the counterdrone market was at a negligible saturation point today, DroneShield expected military planners and security acquirers to rapidly start becoming aware of the need to fulfil their counterdrone requirements.
What they said: “The United States is expected to continue to be the largest market for DroneShield (around 70% of its 2023 revenues), with a growing customer base across numerous government agencies, including both military and non-military federal agencies,” DroneShield said.
“With numerous customers and supporting several different counterdrone use cases, DroneShield is poised for continued diversified growth. The company is actively progressing opportunities, both directly and as a subcontractor, across all its major accounts.
“There are also a number of large non-US leads being pursued, with 2024 expected outcomes.”
The source: ASX announcement
