DroneShield has won a two-year, $9.9 million research and development (R&D) contract with a Five Eyes Department of Defence (DoD).
Approximately $4.5 million is expected in the third and fourth quarters of 2023.
Five Eyes is a defence/intelligence alliance comprised of the United States, Canada, the United Kingdom, Australia, and New Zealand.
The award comes after the ASX-listed company substantially completed the $3.8 million contract with the DoD announced on June 4, 2021, with a final milestone payment expected this month, as revealed in a press release.
Oleg Vornik, DroneShield’s CEO, commented, “Follow-on contracts are the ultimate customer measure of our performance. As an Australian sovereign industrial capability business, DroneShield is proud and pleased to continue undertaking multi-year contracts of increasing size with this customer.”
The CEO said this is DroneShield’s largest long-term contract to date, significantly larger than the previous $3.8 million contract.
He added that the two-year term secures monetary receipts over time and that more contracts are expected following the completion of this phase.
“In the current uncertain geopolitical environment, there is a significant focus by the Five Eyes Governments to procure from defence industrial capability champions within their network of countries,” Vornik stated.
He continued, “Having deep engineering and research capability, TRL9 products and a track record of working with Defence, places DroneShield in a favourable position for ongoing work.”
To date, DroneShield reported that significant work has been made in scaling up manufacturing, operations, and inventory to handle additional projected orders for the balance of 2023.
DroneShield said it is currently finalising the location of a larger industrial facility to relocate its Sydney operations in order to accommodate future growth.
Following a robust $7 million cash receipts 1Q23 quarter, DroneShield said it is on track for an all-time record 2Q23 quarter and a record year for cash receipts in 2023.
The company said continuous record demand for counterdrone / C-UAS systems is fueled by events in Ukraine and rising defence and security budgets worldwide.
Furthermore, DroneShield said it is moving on with the inventory build for the second $11 million order announced in January, which is anticipated to be delivered later this year, now that the $11 million contract announced in December has been fully completed and paid for.
