Counter defence systems, AI drone software and hardware manufacturer DroneShield [ASX:DRO] has begun a substantial production and operations ramp-up.
DRO shares had risen nearly 4% by the mid-morning, trading at $27 cents each.
Over the last 52 weeks, the AI tech stock has gained 31%, and it has also gathered a 27.5% advantage over its fellow technology stocks and 32% on the broader market:
Source: TradingView
DroneShield ploughs ahead with strong production and sales pipeline
Earlier this morning, DroneShield announced it has undertaken a significant jump in production and operations — a ramp-up that closely follows its most recent capital rise of $40 million back in March.
The company said it essentially has $67 million — in sale value rather than current costs — across its diverse range of counter-drone products currently under production. They will be expected to be completed in stages across the current calendar year.
DroneShield said it had gained $15.7 million in cash receipts over the course of 2022. So far in 2023, the group has received $13.9 million with over $2 million expected in R&D tax incentives by Q3 FY2023.
Only last week, the group received the remaining payment for an order of approximately $11 million for an unnamed government agency last December — the $5 million offering another financial milestone to be reflected in the second quarter receipts.
CEO of DroneShield, Oleg Vornik, commented:
‘There are two elements to significantly scaling up our revenues. One is sales, which the team continues making an outstanding effort on, with existing committed purchase orders of approximately $18 million, and working on a number of near-term anticipated large projects, targeting another record year by a significant margin.
‘The other element is having inventory for sale, which is a significant task given the complex nature of the products we offer, and long lead times on many of the components. The majority of our customers require deliveries within a short timeframe of the order due to urgent operational requirements.’
Mr Vornik went on the describe the complexities involved in scaling production, operations and deployment processes all at once. However, he says the team is dedicated to the transformation of a significantly larger scale of business operation.
He said it is also a task that involves close dealings with supply chain partners.
The $67 million in cash receipts will stem from products that do not have medium-term plans for subsequent hardware releases. This avoids the possibility of the hardware becoming outdated and less desirable in the market.
The DroneShield products — aside from its drone guns — all receive quarterly firmware updates via SaaS (software as a service), keeping them up-to-date and relevant to the times and the environment. This is an important step in the ever-evolving technology of drones and counter-drone technology, as well as regarding changes in geopolitical events.
Source: DRO
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For Money Morning
