It might take some time for the market to appreciate just what a breakthrough this deal is. As I read it all the $101 m is for the first tranche only. the second tranche the Ministers flagged will be additional. If that is for upgrading the WASP AE XTE would have to be in a good position to win that work also.
As to sustainment (DoD speak for modifications and maintenance) , that is typically where the higher margins are in agency business. Margins on supply of the initial kit are usually low but much better on follow-on work. That is the significance of the $4 m a year number quoted by the Ministers. It will be interesting to see what the $11 m quoted for local acquisitions will involve.
Most of the revenues from the $101 m will happen in 2018/19 onward but it will also be interesting to see how much falls into next FY. That should help the market cap.
It might take some time for the market to appreciate just what a...
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