Enhanced NATO adds ASX-listed anti-drone weapons maker to must-have shopping list

In a major boost for ASX-listed DroneShield and the soldiers its tech protects, NATO has added several of products to a list of favoured weaponry.

DroneShield's Drone Gun Tactical (with optional NATO tattoo). Picture: DRO

In a major boost for ASX-listed DroneShield and the soldiers its tech protects, NATO has added several of its products to a list of favoured weaponry.

The North Atlantic Treaty Organisation, which as of this week almost includes the Armed to the Teeth Swedes and the Frightening Finnish, just gave mild-mannered Australian drone killing DroneShield (ASX:DRO) NATO Stock Numbers.

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NATO members gathered on Tuesday (overnight) for a two-day summit in Vilnius, amid calls from Ukraine’s President Volodymyr Zelensky to confirm Ukraine as a de facto member.

Sweden’s NATO bid suddenly appears set to go forward after a last-minute reversal from Turkish President Recep Tayyip Erdogan, one of the last and largest obstacles to Swedish membership.

Meantime, in Ukraine, air defences fended off an overnight Russian drone attack on Kyiv.

Whether or not those air defences included DRO’s Drone Gun Tactical are above my security clearance.

According to DRO itself, “several (new) products have been assigned a NATO Stock Number (NSN)”.

That means they’re on a terrifying NATO brochure somewhere which the generals pore over to select what things do the best defensive and offensive work.

Here’s what NATO can now also buy from the Droneshield shopfront. Picture: Supplied

This follows up on the earlier NSN assignment for DroneGun Tactical (5865661650137) in February 2019, which the company says “significantly contributed, and continues to contribute, towards that product becoming one of DroneShield’s best-selling items.”

For all non-NATO weapons acquirers and suppliers, an NSN is a 13-digit numeric code, identifying all the “standardised material items of supply” as they have been recognised by all NATO countries, including US Department of Defense, and allows for any of the 31 NATO militaries to purchase the items on a “military catalogue” basis, significantly simplifying the procurement process.

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The assignment of an NSN is also relevant to non-NATO customers in that it is considered to signify that the product has achieved a certain level of acceptance by the world’s most discerning military customers, the members of NATO and the alliance’s allies.

DRO is quietly expecting that the receipt of these additional NSNs will “assist its sales efforts” in both NATO and non-NATO countries.

The NATO win follows last week’s operational update highlighted by a follow-on two-year R&D contract (with a total value of $9.9 million) by a Five Eyes Department of Defence, which the company has chosen not to name.

Operator with the tablet console of DroneShield DroneSentry-X vehicle counterdrone system. Picture: DRO

“Approximately $4.5 million is due in the September and December 2023 quarters.”

Five Eyes refers to the evil-sounding alliance of Anglo armaments and spies and stuff.

It’s a formerly hush-hush but now open defence/intelligence alliance between the US, Canada, UK, Australia and NZ.

Anyway, that award follows DroneShield materially completing the $3.8 million contract announced June 4, 2021, with the DoD, with a final milestone payment expected later on this month.

Oleg Vornik, DroneShield’s CEO, said that follow-on contracts were “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.

“This is the largest long-term contract received by DroneShield to date, significantly larger than the earlier, $3.8 million contract. The two-year term locks in cash receipts over a period of time. Further larger contracts are anticipated following 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. 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.”

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Operational update

• Following a strong $7 million cash receipts 1Q23 quarter, DroneShield is on track for an all-time record 2Q23 quarter and continuing on a trajectory for another record year for cash receipts in 2023. Further detail will be provided in the next 4C quarterly, due to be released later in July.
• There’s significant progress on manufacturing, operations and inventory scale-up to support additional anticipated orders for remainder of 2023. DroneShield is finalising the location for a larger industrial site. allowing it to move its Sydney operations and enable the expected growth.
• With the $11 million contract for counterdrone tech (involving an undisclosed government agency) announced in December now fully delivered and paid for, DroneShield is progressing the inventory build of the second $11 million order announced in January, expected to be delivered later this year.
• DroneShield has a current order book (committed and binding customer purchase orders) of about $29 million, an all-time record.
• There are more than $200 million of qualified opportunities in the pipeline (in addition to the order book), across about 80 projects.
• The company is experiencing ongoing record demand for counterdrone/C-UAS equipment, underscored by the events in Ukraine and increasing defence and security budgets globally.
• In addition to military and intelligence communities, there is significant engagement with critical infrastructure plants, airports and other civilian customers.

This content first appeared on stockhead.com.au

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