Xtek Ltd (ASX: XTE) announced its business update for the first quarter of FY21 today, sending the share price rocketing 8.93% higher in afternoon trade. The Xtek share price was trading at 61 cents at the time of writing.
Let's see what Xtek's developments have been for the period ending September 30.
Why has the Xtek share price shot up today?
The defence contractor has completed delivery of its XTclave plates to Tote Systems Australia. This was the first use of XTclave products in the law enforcement field in Australia, the company said.
During the quarter, Xtek also delivered its first batch of ballistic armour plates to CPE Production OY, to be passed onto the Finnish Defence Force. The initial commercial purchase order was upsized to a total value of $2 million.
United States commercialisation
Xtek has exported multiple delivering of XTclave products to the United States for qualification and testing purposes. The company said the US Department of Defence would validate and review XTclave for potential commercialisation. Defence and law enforcement sales resources have been appointed to assist with Xtek's US plans. Retired Australian special forces brigadier Mark Smethurst will act as special advisor on the board.
The company has also ramped up its project at the new state-of-the-art Adelaide manufacturing centre. Xtek is expanding its XTclave ballistic helmet manufacturing line, to be commissioned between late 2020 and early 2021. The facility's boosted production is expected to handle large scale orders in a timely manner.
Xtek said it was holding numerous commercial discussions for its XTclave products, most notably with major US operators. The recent order for testing the XTclave plates is seen as a major boost for the company. In addition, Xtek plans to establish a manufacturing capability in United States. This will allow the company to tender for defence contracts that require products to be locally-made.
The company also noted that further bidding to other countries is being undertaken with negotiations about Xtek's product specifications requirements.
Further deliveries of its XTclave plates to the Finnish Defence Force are expected to be completed in the short-term. The company is exploring additional opportunities with CPE Production Oy.
In Australia, Xtek continues to collaborate with Skykraft to progress with the design for a small satellite launch stack. The company expects this project to be completed in late FY21.
What did management say?
Xtek managing director Phillipe Odouard said:
We are pleased with delivering a strong quarter of growth for the company, in which we achieved several important milestones. Our ballistic commercialisation is progressing well, with the first XTclave deliveries now complete. These milestones illustrate the demand for our state-of-the-art technology and capabilities; and represents external validation of our product quality.
We look forward to accelerating our international ballistics commercialisation strategy, underpinned by the recent oversubscribed capital raising. In addition, we continue to engage with potential customers and strategic parties to further commercialise our unique actionable intelligence solutions, which are continuing to gain significant traction, momentum and market interest.