DroneShield wins $1 million repeat deal from a Five Eyes country
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Counter-drone technology company DroneShield (ASX:DRO) has just received a repeat order from a “high profile” government member of the Five Eyes alliance.
Due to the highly sensitive nature of the business, the company does not usually disclose the identity of some of its customers.
DroneShield’s new Five Eyes contract is however worth approximately $1 million, a substantial increase from the initial trial purchase of approximately $500,000 made from the same customer last year. The transaction will be paid in full in the June quarter of this year.
The Five Eyes alliance is an intelligence alliance comprising Australia, Canada, New Zealand, the United Kingdom, and the United States, sharing information on security matters such as terrorism.
DroneShield’s CEO, Oleg Vornik, said that the repeat order has validated the company’s superior product and technology.
“This significantly larger follow-on order is a testament to both the industry leading capabilities of DroneShield products and an example of a common procurement pattern in our industry, where an initial order and evaluation might take some time, but once the solution has been validated and thoroughly vetted by the end user, larger follow-on orders result.”
Vornik said the company will continue to work with the Five Eyes countries in order to build up its order book.
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 December 2020 quarter was the company’s best ever, when it reported a record of $2.8 million in purchase orders.
Over the last 12 months specifically, the company has gained significant momentum, signing contracts with multiple high profile clients.
It was awarded contracts with major US government agencies, which includes a deal with the US Air Force in July 2020 for its DroneSentry systems. Last September, the company also received funding from the US Department of Defence for targeted development of its C2 system.
In Europe, the company has also made impressive progress in the past year – winning multiple orders from three seperate European countries, deploying its DroneSentry system at the Altenrhein Airport in Switzerland, as well as completing a DroneSentinel trial for a mid-tier European airport.
The increasing use of drone products across recreational and commercial applications has generated an enormous industry which is expected to reach $60 billion by 2024.
As security risk from drones increases, there is also an increasing market for counter-drone technology, which the company predicts to be worth $5.9 billion by 2026.
High profile drone incidents around the world such as attacks on Saudi oil fields, and the assassination attempt on Venezuelan President Maduro in 2018, have recently made counter-drone technology an important part of a government’s arsenal.
Against this backdrop, DroneShield has built up a pipeline of orders worth around $100 million from global customers.
The company’s share price has also risen by around 30 per cent over the past year, and is trading at 16c today.
If you’re wondering which other ASX drone companies might be worth looking at, we at Stockhead have compiled that list for you.