DroneShield and COSOL lift after multimillion dollar defence contracts
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DroneShield rose by more than 6 per cent after announcing a $1.1 million repeat order from a sovereign government customer, while COSOL also rose by 3 per cent, after securing an $8.5 million renewal contract from IBM for a Department of Defence project.
Anti-drone tech company DroneShield has just secured a second order from a “high profile” government customer of the Five Eyes country.
The new $1.1 million ordered is from the same customer that had previously purchased on 15 March 2021.
Due to the highly sensitive nature of the business, the company does not usually disclose the identity of some of its customers.
The contractual value is expected to be received during the current quarter (2Q21), and will be included in the cash report for the period. Additional further follow-up orders are currently being discussed.
DroneShield’s CEO, Oleg Vornik, says the orders came after a long process that involves educating customers about its products.
“This rapid sequence of increasing repeat orders is precisely the right position to be in our industry, following initial lengthy periods of educating the end users on the merits of our offering and undergoing military and Government procurement processes”, he said.
“This is a testament to the world class performance of the DroneShield products, and strongly positions us as these end users are commencing larger deployments of counter-UAS systems.”
DroneShield has been delivering consistent revenue growth over the last five years. It started from a low base of $0.1 million in 2016, which has grown to $5.6 million in 2020. In the past year alone, revenue grew by 58 per cent.
The company has been awarded contracts with major US government agencies, which includes a deal with the US Air Force in July 2020 for its DroneSentry systems. It says that it’s serving a $5.9 billion total addressable market.
The company’s share price has risen by 45 per cent over the last 12 months.
Another defence-related contract announced today was the $8.5 million extension agreement awarded to COSOL for an Australian Department of Defence’s project.
In the deal, COSOL will be subcontracted by IBM to provide it with COSOL’s proprietary system, RPConnect, and data migration services, as part of the DoD’ ERP transformation programme.
The DoD’s well publicised ERP programme is replacing the department’s core enterprise resource planning platform, the Hitachi’s Ellipse EAM product suite and SAP ECC6. The project is to be completed between April 2021 and December 2022, and will contribute to COSOL’s bottom line in FY21.
COSOL has a long-standing relationship with IBM, where its RP Connect data management platform has been used successfully to integrate data from multiple systems. The company says it is the largest Ellipse ABB enterprise software managed service provider in Asia Pacific and North America, with a total addressable market of around US$6 billion.
The company’s revenue has grown by 45 per cent in the latest half to $15.6 million, and its share price has surged by 150 per cent over the last 12 months, after listing on the ASX in January 2020.