Xtek Ltd - Exclusive ADF support contract secured
Xtek Ltd (ASX:XTE)

Exclusive ADF support contract secured

Highlights

Contract Secured:

XTEK secures exclusive support contract for spare parts, repair and maintenance of ADF’s WASP AE SUAS fleet.

Significant Revenues:

The contract is for an initial term of three years with multiple options to extend through to 2026, with an anticipated revenue of up to $5m per year

Stronger Ties:

This strengthens XTEK’s relationship with the ADF and solidifies XTEK’s position as the key SUAS supplier in Australia

What does this announcement mean?

Erik Bergseng CFA® from Mawson Graham provides perspective on this recent announcement.
Erik Bergseng CFA®
Written by Erik Bergseng CFA®
Published Sep 27, 2019

As we previously mentioned in earlier research pieces, given XTEK had the only repair facility for Aerovironment's AE WASP SUAS outside of the United States, it was very likely XTEK would be the one to maintain these drones for the ADF. Not only are the maintenance revenues from this contract expected to be relatively higher margin, this contract is further validation that XTEK is a leader in high quality defence products and services.

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Managing Director's Summary

Philippe Odouard

“This is a significant contract win for our business to support the ADF’s growing SUAS fleet. This follows the recent installation of the repair and maintenance facility and 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. This is aligned with the Federal Government’s objective to increase domestic content and IP within defence procurement and we look forward to working with the ADF.”

Philippe Odouard
Managing Director, Xtek Ltd

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