Droneshield (ASX:DRO) shares were down in Thursday morning trades as it lost out on the first funding package announced under the government’s $1.3 billion LAND 156 Counter-small Uncrewed Aerial Systems program.
Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.
Instead, an initial Systems Integration Partner (SIP) contract worth $45M has been awarded to a privately held company called Leidos Australia, with whom Electro Optic Systems (ASX:EOS) works alongside, meaning for this first tranche at least, EOS has beaten out DRO on CUAS systems – despite that being DRO’s deal.
The latter on Wednesday saw its share price decline when it released its first FY25 showing profitability – with NPAT of $2M, versus a market cap of $3B, which wasn’t necessarily received too well. Revenues might have jumped triple-digit figures, but there’s still that gap between valuation and fundamentals, which, lo and behold, news like Thursday’s doesn’t go a great length towards filling in.
At any rate, Droneshield played it cool on Thursday.
“The SIP contract has been reported to be approximately $45 million in the media. This leaves the substantial majority of the LAND156 program remaining, of the $1.3B total value, over the next 10 years,” DRO wrote.
“As a sovereign Australian counterdrone business, DroneShield looks forward to working with Leidos Australia on LAND156 where appropriate.” That may or may not be an option for Droneshield, given that EOS’s release on Wednesday – when it confirmed it had been selected as part of the LNAD 156 program alongside Leidos – noted the gov’t will likely be evaluating EOS’s ‘Slinger’ anti-drone weapon.
“The initial award to Leidos Australia is expected to give rise to orders for small-batch evaluation quantities of EOS products, including the Slinger counter-drone remote weapon system,” the company wrote.
“Following an initial phase of evaluation and system design work, the award has the potential to lead to further orders of EOS counter-drone products in the future, with the potential to benefit EOS revenue from 2026 onwards.”
DRO last traded at $3.16/sh; EOS at $6.01/sh.
Join the discussion: See what’s trending right now on HotCopper, Australia’s largest stock forum, and be part of the conversations that move the markets.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please clickhere.