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57.5¢ xtek limited.

Ann: XTEK to supply new Small Unmanned Aerial Systems to the ADF, page-22

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kickst@rter

1,313 Posts.

36

02/06/17

19:45

Post #: 25073163
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Originally posted by little eagle ↑

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.

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Indeed, the specifics of the contract requires more time to be released to market. If XTE management are anything like QHL management then expect a CR for premise expansion.

XTE Price at posting: 41.0¢ Sentiment: None Disclosure: Not Held
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