The defence contractor's shares shot up to an astounding high of 49 cents this morning before settling 39% higher around 44.5 cents. At the time of writing, they have retreated slightly to 42 cents apiece, up 30%.

Let's take a look at what the company updated the ASX with.

Xtek locks in multi-million contract

Investors are driving up the Xtek share price after the company's subsidiary secured a significant purchase order.

According to the release, Xtek advised that its HighCom Armor Solutions Inc. (HighCom) business received a US$33.21 million contract.

The scope of the contract is for the urgent supply of "many tens of thousands of individual advanced ballistic protection items".

Given the nature of the business, Xtek could not reveal which international customer ordered the specialist ballistic armour.

However, with the Russian war continuing to rage on in Ukraine, it's possible the latter could be the beneficiary.

Fulfilling the order

Xtek noted its logistics team was trying to source and secure the raw materials needed to fulfill this large order.

The ultra-lightweight and high-performance body armour plates and ballistic helmets are manufactured in Columbus, Ohio.

The company expected to deliver roughly 40% of the contract by the end of year. The remainder will likely be sent sometime in the first quarter of 2023.

The latest order takes the group's total new order bookings to more than $69.5 million since the beginning of March. More specifically, the Ballistics Division's new orders represent $64.4 million of this.

Xtek group CEO Scott Basham commented:

…The first bulk shipment of items will be dispatched in coming days, and the business is fully committed to delivering the remaining batches of these life-saving products as quickly as possible over the coming weeks.

We continue to engage deeply with this, and other local and international customers, to assist them to resolve their urgent ballistic armour supply needs.

Xtek share price summary

Despite today's massive gains, the Xtek share price has lost around 16% from this time last year.

Its shares reached as low as 16.5 cents in February, before almost tripling in value in the space of three months.

Based on valuation grounds, Xtek presides a market capitalisation of roughly $42 million.

The post Here's why the Xtek share price rocketed more than 40% today appeared first on The Motley Fool Australia.

Xtek shares finished the day up 10.87% to 25.5 cents. This means that, in the past month alone, the defence contractor's shares have risen by more than 45%.

What did Xtek announce?

Investors reacted positively to the company's latest announcement, driving up the Xtek share price.

In its release, Xtek advised it received a purchase order for the urgent supply of specialist ballistic armour products. This came from an "undisclosed international customer", suggesting it might possibly be for end-use in Ukraine.

Recently, the Australian government announced an expanded $21 million military support package for Ukrainian armed forces. This brings the total defensive military assistance for the former Soviet country to $91 million.

The latest Xtek order is valued at $3.2 million, with urgent delivery now underway.

The ultra-lightweight and high-performance body armour plates and ballistic helmets are manufactured in Columbus and Ohio. However, the patented XTclave capability is located in Adelaide, South Australia.

Most notably, the lightweight armoured plates are already being used by government agencies in Australia and Finland.

Commenting on the news driving up the Xtek share price today, CEO Scott Basham commented:

We supply these world-class, advanced personal protection ballistic products and solutions to militaries, law enforcement agencies, and first responder customers all around the world.

Xtek's Ballistics Division is working at pace to manufacture our highly sought-after specialist ballistic products, and we are in constant discussions with many other international customers as they develop their ballistic armour requirements.

What does Xtek do?

Defence company Xtek specialises in a range of products for government agencies, law enforcement, military and space and commercial sectors.

Key products include ballistic armour, lightweight and tactical human load carriage equipment, robotic mechanical systems and unmanned crafts.

About the Xtek share price

Despite today's strong gains, the Xtek share price has lost more than 50% in value over the last 12 months.

Its shares reached as low as 16.5 cents late last month, before rebounding to December 2021 levels today.

Based on valuation grounds, Xtek presides a market capitalisation of roughly $25.41 million.

The post XTEK (ASX:XTE) shares rocket on 'urgent supply of specialist ballistic armour' appeared first on The Motley Fool Australia.

At the time of writing, the defence contractor's shares are fetching for 28 cents, down 23.29%.

What did Xtek announce?

Investors are heading for the hills after Xtek shares came out of a trading halt today.

According to an announcement this morning, Xtek advised it has successfully completed an underwritten institutional placement. The offer received interest from both new and existing institutional investors, raising $2.7 million.

Xtek will issue around 10.4 million ordinary shares under the placement. The price for each share is set at 26 cents apiece, reflecting a 28.8% discount to the last closing price of 36.5 cents on 29 September.

Settlement of the shares is expected to occur on 8 October with allotment and commencement of trading on 11 October.

In addition, Xtek will also make a 1 for 3.7 pro-rata non-renounceable entitlement offer to all eligible security holders. The partially underwritten placement is seeking to raise a further $5 million on the same terms.

Approximately 19.2 million new shares will be added to the company's registry.

The record date is scheduled to fall on Thursday, 7 October.

In total, $7.7 million will be raised to fund a number of initiatives for Xtek. These include:

• Development of an Australian-made small VTOL Unmanned Aerial Vehicles (UAV) for upcoming sales opportunities with the Australian Defence Force;
• Development of the next XTatlas actionable intelligence software applications;
• Expansion of the range of hard armour plates and helmets made using its patented XTclave process; and
• Provision of working capital required to grow the company's business and meet ongoing financial obligations.

Xtek share price review

It's been a woeful year for Xtek shares. They've gradually moved more than 50% lower over the past 12 months. It's worth noting the company's shares are currently trading at multi-year lows today.

Xtek presides a market capitalisation of about $19.89 million and has just over 71 million shares on its books.

The post Xtek (ASX:XTE) share price sinks 23% on capital raising efforts appeared first on The Motley Fool Australia.

For many decades, the prohibitive cost of sending humans outside earth meant space travel was monopolised by the public sector.

But this is no longer the case, according to Nucleus Wealth head of investments Damien Klassen.

"For me, what is incredible is the pace of cost reductions being seen in the sector," he said on the Nucleus blog. 

"Elon Musk's SpaceX has brought the cost of launching equipment into space down by a factor of 10. And there is a realistic roadmap to bringing it down by another factor of 10."

He pointed out that only 20 years ago solar power was "a novelty", but after dramatic cost reductions, it is now transforming the energy industry.

"The question is, what sectors could be affected by a similar change? What emerging trends should we be watching today?" 

Klassen said the entry of the private sector makes the new space race very exciting.

"Plus it is an interesting hedge on the continued souring of US-China relations. If the space sector isn't at least on your radar, it should be."

How to get exposure to the space sector

There are many ways to invest in the space industry in overseas markets.

Mammoth US defence contractors, like Boeing Co (NYSE: BA) and Lockheed Martin Corporation (NYSE: LMT), are one path.

"But space investment is only a part of a very large company. And they are often not working on some of the cutting edge technology."

Klassen mentioned that there are a couple of space-themed exchange-traded funds in the US too: Procure Space ETF (NASDAQ: UFO) and ARK Space Exploration & Innovation ETF (BATS: ARKX).

But as for ASX shares, he named 4 companies.

"Electro Optic Systems Hldg Ltd (ASX: EOS) is the biggest of the crew," said Klassen.

"Brainchip Holdings Ltd (ASX: BRN), Xtek Ltd (ASX: XTE), and Kleos Space SA (ASX: KSS) round it out."

The Australian companies are small caps, so there is considerable risk compared to the much larger overseas investments.

"If you are looking for Australian stocks, then be prepared for some red ink on your P&L," Klassen said.

"You need to be comfortable with the product and see a path to profitability."

He warned investors to avoid buying "a dream".

"If there is another space race, you can expect most defence contractors to benefit. That will not be the case for smaller stocks."

Electro Optic Systems shares have lost 37% for the year, while Xtek has shaved 26% off its value. Meanwhile, Brainchip has gained 10.5% so far in 2021 and Kleos Space has returned a handsome 56.5%.

The post Want to invest in space? Here are 4 ASX shares appeared first on The Motley Fool Australia.

When news broke, the Xtek share price soared to an intraday high of 62 cents. However, since then, some profit taking has taken place. At the time of writing, the defence contractor's shares are flat at 54 cents apiece.

What did Xtek announce?

According to its late-afternoon release, Xtek advised that it has signed an exclusive distribution agreement with KeyOptions Pty Ltd.

Under the deal, KeyOptions will supply Xtek with its Virolens product for sale and support in Australia, New Zealand and the Pacific independent states.

The contract will be valid for an initial period of 2 years, with year-to-year automatic renewals thereafter. Thus, for Xtek to continue its exclusivity rights, a minimum sales target must be reached within the first year.

Xtek stated that the Virolens product has been accepted by the United Kingdom Medical and Healthcare product Regulatory Agency (MHRA) for registration as an in vitro diagnostic (IVD) medical device. Furthermore, it said that an application has been lodged by KeyOptions to the Australian Therapeutic Goods Administration (TGA).

Xtek noted that revenues are dependent on obtaining approval by the TGA, and customers confirming their expressions of interests into firm orders. It also stated that the commercial opportunity is wide-ranging, however, there is no certainty on guaranteed sales.

What is Virolens?

The Virolens system is a portable floor-standing screening device that combines holographic microscopy with artificial intelligence (AI) to detect COVID-19. The product works by using a mouth swab which is placed inside a cartridge and inserted into the system.

From there, Virolens looks at the nano-scale structures of the sample using a holographic microscope. The data is analysed by AI and quickly identifies if the COVID-19 virus is present. The whole process takes up to 30 seconds with a 99.7% accurate reading based on results of an internal in-vitro validation study.

The Xtek share price has gained almost 40% in the past 12 months and is up 7% year-to-date.

The post What's going on with the Xtek (ASX:XTE) share price today? appeared first on The Motley Fool Australia.

Shares in the defence equipment supplier crashed 6.6% to 57 cents this morning. The sell-off comes as management reported a 55% increase in first half net loss to $3.6 million on Friday evening.

Xtek's top line fell too. Revenue declined 23% to $12.4 million for the six months ended 31 December 2020, compared to the same period in 2019.

Silver lining to Xtek's profit results

But it isn't all bad news, although most investors would have missed any good news as these are buried in the details.

It also doesn't help perception as Xtek chose to release its results after the market closed on Friday. There's a market belief that only ASX shares with bad news will release an announcement after the closing bell on a Friday.

However, management's positive outlook commentary should sooth fears about its new Adelaide manufacturing plant.

Ramping up production

Problems with the commissioning and ramp up of the new plant, which makes bullet proof composites, have been the main reason why the Xtek share price has underperformed since its capital raising in August 2020.

These issues seem to have been addressed. Xtek received regulatory approval to operate the plant and has successfully manufactured and tested three hard amour plates.

Xtek believes the plant will hit full production by the June quarter and current orders for its plates can be fulfilled at the smaller existing test plant.

Bigger net loss explained

The bigger net loss is also largely due to increase costs. These related to the commissioning the Adelaide plant and running the recently acquired US body armour business HighCom.

The drop in interim revenue is more disappointing. The fall comes even as HighCom's topline increased by 30% to US$10 million for calendar 2020 compared to the year before.

This suggests a lacklustre first half for the rest of Xtek's businesses, which includes military drones, software and armaments.

Positive outlook fails to support Xtek share price

But management is tipping a stronger second half result due to the seasonality of its business. Defence spending typically picks up towards the end of the financial year in Australia. This is because government departments have to spend their budgets or risk losing some of their funding in the new financial year.

Xtek is also predicting an increase in exports of its bullet proof plates, further sales of spare parts and servicing for its drones used by the Australian Army, and sales of its drone mapping software under the federal government's C4EDGE program.

Shareholders not feeling the Pyne

Another piece of significant news is the appointment of former defence minister Christopher Pyne as a non-executive director.

The cynic in me thinks this could be another reason why the stock is underperforming. ASX companies that appoint ex-government minsters to their boards don't have a good track record in creating shareholder value.

Xtek shareholders like myself will be hoping this time will be different.

The post Why the Xtek share price is crashing today following its profit results appeared first on The Motley Fool Australia.

The reason? The announcement of an actively managed space exploration ETF from Cathie Wood's ARK Investment Management. Although the holdings of the ETF are unknown, the market obviously has already begun speculating. Which leads us to the question, what sort of exposure does the ASX space sector offer?

But before we get ahead of ourselves, let's cover why investors are paying attention to what one managed ETF is doing.

A bit of background on Cathie Wood and ARK

If the name Cathie Wood doesn't ring a bell, I would be very surprised. The founder and CEO at ARK Invest has become known as somewhat of a modern Warren Buffett. Although, between the two, there aren't too many similarities in investing style.

Buffett is known for his investments in cash-generative businesses that are fundamentally undervalued and being a champion for passive investing through index funds. On the contrary, Cathie Wood invests heavily based on growth.

Cathie Wood began her rise to prominence in 2019 when ARK Invest set a bull case pre-split price target on Tesla Inc (NASDAQ: TSLA) of US$7,000. At the time, Tesla shares were trading between US$200 to US$250. Many market commentators shrugged this off as crazy, unrealistic, and a pipe dream.

People started to wake up and pay attention to Cathie and ARK Invest through 2020, as Tesla broke out and ran, while Cathie's actively managed ETFs substantially beat the broader market returns. For example, the flagship ARK Innovation ETF returned 133% in 2020.

It's out of this world

According to ARK Invest's website, the space exploration ETF will seek to provide exposure to companies involved in space-related businesses. These include reusable rockets, satellites, drones, and other orbital and sub-orbital aircraft.

ARK stated that the ETF would be looking for companies that are "[l]eading, enabling, or benefitting from technologically enabled products and/or services that occur beyond the surface of the Earth."

The ETF will be actively managed, and the typical number of holdings will be between 30 to 50.

So, are there any companies on the ASX that would fit the bill?

It's slim pickings for ASX space shares

Unfortunately, the truth is there aren't too many ASX-listed companies that have exposure to space exploration. However, we'll cover a few that dabble in that realm.

Electro Optic Systems Hldg Ltd (ASX: EOS)

Electro Optic Systems (EOS) develops and produces a range of electro-optic technologies in the aerospace sector. The company is Australia's largest aerospace entity and the largest defence exporter in the southern hemisphere.

EOS grew in 2019 by acquiring EM Solutions to build out its own satellite communications offering. In its half-year results, the company indicated that it would continue to monetise its space technology in the communications and defence sectors.

In late 2020, EOS announced its own Medium-Earth Orbit (MEO) satellite constellation, EOS SpaceLink. The company expects it to be launched and operational in 2024 with positive operating cash flow. 

As of the half-year report, the company indicated a $570 million project backlog. EOS shares are down 37.7% in the last year. The company now has a market capitalisation of $863.07 million.

Xtek Ltd (ASX: XTE)

Xtek is aiming to predominantly draw revenue from its manufacturing of ballistic materials using its proprietary XTClave technology. The unique method allows the protective material to be made with a higher projectile resistance-to-weight ratio.

However, the benefit of this technology is that it can be applied to many other applications outside of just ballistic products. According to the company, the lightweight product also bodes well for manufacturing materials to be used in spacecraft and other space-related equipment. In fact, in June 2020 Xtek, in conjunction with Skykraft Pty Ltd, was given a grant to develop a small satellite launch stack.

Shares in Xtek are down 17.39% over the last 12 months. The company now has a market capitalisation of $38.61 million.

Kleos Space SA (ASX: KSS)

Kleos is a bit of a unique company in terms of what it does. The company uses satellites to deliver a global image of covert maritime activity. This is used by intelligence agencies and governments when traditional geospatial intelligence doesn't suffice, due to weather, distance, or sea state. Hence, Kleos brands itself as an RF reconnaissance data-as-a-service provider.

In May 2020, Kleos was awarded a contract on the Micro-Satellite Military Utility (MSMU) project. This entails Kleos' data being made available to the MSMU project, which involves the Departments of Ministries of Defense of Australia, Canada, Germany, Italy, Netherlands, New Zealand, Norway, United Kingdom, and the United States.

Late last year, the company announced it had successfully placed 4 of its satellites into orbit after launching from India. This will enable Kleos and its government partners to detect maritime activity such as drug and people smuggling, piracy, and illegal fishing. 

The company anticipates revenue to be derived from the satellites from the first quarter of FY2021. Currently, agreements are in place with the US Airforce, L3Harris Technologies Inc (NYSE: LHX), and other government entities. The annual licensing fees for the first cluster of satellites will be between $128,000 and $971,000 per license and the number of initial licenses targeted is around 130. 

Kleos shares are up 71.62% for the last year. The company now has a market capitalisation of $97.34 million.

The post Cathie Wood announces space ETF, what about the ASX space sector? appeared first on The Motley Fool Australia.

At the time of writing, the Xtek share price is up 1.71% to 59.5 cents after reaching as high as 61.5 cents in earlier trading. In comparison, the All Ordinaries Index (ASX: XAO) is down 0.6% to 6,859 points.

What's driving the Xtek share price higher?

The Xtek share price is gaining ground today as investors are apparently pleased with the company's strategic direction.

According to the company's release, Xtek has secured an order for $2.1 million worth of ballistics products from the Mexican Government. The new contract award consists of hard amour plates and helmet products. While Xtek has fulfilled 60% of the order so far, the remaining products are expected to be delivered early next year.

The decision to export personal protective equipment to Mexico follows the approval of a warehousing distribution agreement (WDA) from the US State Department office of Directorate of Defence Trade Controls.

The WDA allows Xtek to distribute personal armour products to Mexican military and law enforcement agencies across all government levels. The agreement has a term of over 10 years with a value of up to US$50 million. Xtek is also able to apply to the US State Department for an option to increase the value of the agreement.

In addition, Xtek will appoint a new distributor to Mexico City to oversee deliveries, and accelerate future export orders. The role is expected to support the company's strategy in establishing new international markets.

Commentary from management

Mr Phillipe Odouard, Xtek managing director, commented on the award. He said:

Previously, exports to Mexico were limited by the need to continuously request export licences for quantities of any size, with each request typically taking several weeks to be awarded – so this new license streamlines the process significantly and makes it a much more attractive opportunity to export to these Mexican customers. The orders represent the start of a new expansion into Mexico that we are confident will build significantly.

Adding to his comments, HighCom CEO Mr Mike Bundy went on to say:

… Our business development and trade compliance team members have executed on a thorough and exhaustive process to ensure our company and group globally is adhering to the strict U.S. Government trade compliance regulations while streamlining supply and delivery of critical life-saving equipment to our allies south of the border.

About the Xtek share price

The Xtek share price has been on a rollercoaster ride over the past 12 months. Its shares reached as low as 38.5 cents in March, before jolting to a 52-week high of 91 cents in July.

With the current Xtek share price sitting roughly at the mid-way mark, Xtek has been busy focusing on its growth strategy. In the last six months alone, the company has secured orders from a variety of international customers.

The post Why the Xtek (ASX:XTE) share price is rising today appeared first on The Motley Fool Australia.

What's moving the Xtek share price?

The Xtek share price is inching higher after the company announced that former Minister for Defence, Mr Christopher Pyne, will be joining its board.

According to the release, Mr Pyne holds significant experience in the commercial, political and defence industries. Having served as a member of parliament for 25 years, he was responsible for initiating Australia's $200 million defence program. In addition, Mr Pyne assisted in developing the 2016 Defence White Paper and implementing projects within it.

Mr Pyne is the current chair of Pyne and Partners, and principal of GC Advisory, both of which provide consulting services to businesses on government and political matters. Based in Adelaide, South Australia, these companies operate domestically and overseas.

Accredited as an industry professor at the University of South Australia Business School, Mr Pyne specialises in the defence and space environments. In the lead up to his position in parliament, he practised law as a solicitor at Corrs Chambers Westgarth and Thomson Geer.

The strategic appointment will seek to utilise Mr Pyne's skillset to assist Xtek in commercialising its products in global markets.

Management commentary

Xtek chair, Mr Uwe Boettcher, spoke on the new appointment of Mr Pyne, saying:

We are delighted to welcome Christopher to the XTEK Board. His extensive experience and expertise, and his vast knowledge of the Australian Defence Industry, will be of immense value to the Company as it continues to execute its strategy to commercialise its proprietary technologies globally, as well as further strengthen its domestic capabilities.

We look forward to working with Christopher going forward and his contribution to XTEK.

Adding to Mr Uwe Boettcher's comments, Mr Pyne said:

XTEK is on the verge of significant growth as it continues to develop and commercialise its IP globally, building on its domestic distribution networks and capabilities. I look forward to contributing to this next stage of growth and being part of this market leading Company.

Xtek share price summary

The Xtek share price is up over 10% since the start of the month, and 61% since hitting an all-time low of 38.5 cents in March. However, when compared with the beginning of 2020, the Xtek share price is down around 18%.

The post Why the Xtek (ASX:XTE) share price is edging higher today appeared first on The Motley Fool Australia.

The release has excited investors, sending the Xtek share price to 62 cents, up 7.8%. In comparison, the All Ordinaries Index (ASX: XAO) is down 0.5% to 6,811 points.

What's driving the Xtek share price higher?

In its AGM presentation, Xtek spoke positively about its recent achievements and long-term future, including the successful acquisition of United States-based HighCom Armor, which will provide an introduction for XTek's XTclave products to United States government and law enforcement customers. The company's lightweight armoured plates are already being used in Australia and Finland.

XTek noted that a new range of armour products has now been developed for the United States. This follows the United States Department of Defence order for testing and qualification purposes. Sales have seen substantial growth over the last 12 months, with the company focused on broadening its distribution channels.

Management commented on the year-on-year growth that Xtek has experienced over the last four years. Revenue has jumped from $9 million in FY17 to a record $42.7 million in FY20, reflecting a 374% increase.

The company has also shifted around its revenue mix during the year. Its proprietary products, and small unmanned aerial systems (SUAS) supply and support business have all risen in gross margin value.

Outlook

Looking ahead, Xtek is targeting opportunities in its United States recurring ballistic sales, currently worth $14 million per year. In addition, the recent Finnish $2 million XTclave order is expected to yield further contract awards. In total, Xtek sees up to $70 million in near-term prospects across its entire portfolio.

The company also reports that its medium to long-term target is $100 million in revenue, which it plans to achieve through a number of activities including expanding its United States distribution and manufacturing base and establishing new networks for exports.

About the Xtek share price

The Xtek share price is down 17% since the beginning of the year. Although its shares are higher over the last month, up 10.7%, the company is 32% down from its 52-week high.

The post Xtek (ASX:XTE) share price soars 7% on AGM update appeared first on The Motley Fool Australia.

Here is what the team have come up with…

Chris Chitty: Envirosuite Ltd (ASX: EVS)

My tech share for October is Envirosuite Ltd. Envirosuite is an environmental consulting company that helps its clients to manage their effect on the environment. This company provides software as a service (SaaS) which assists companies to measure and control their environmental outputs.

Motley Fool Contributor Chris Chitty does not own shares of Envirosuite Ltd.

Glenn Leese: ELMO Software Ltd (ASX: ELO)

The post Top ASX tech shares to buy in October 2020 appeared first on The Motley Fool Australia.

Let's see what Xtek's developments have been for the period ending September 30.

Why has the Xtek share price shot up today?

XTclave deliveries

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.

Adelaide facility

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.

Looking ahead

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.

The post Why the Xtek (ASX:XTE) share price is shooting 9% higher today appeared first on The Motley Fool Australia.

About Xtek

Defence company, Xtek specialises in a range of products for government agencies, law enforcement, military and space and commercial sectors. Its key products include ballistic armour, lightweight and tactical human load carriage equipment, robotic mechanical systems and unmanned crafts.

International delivery

The Xtek share price was on the move after the company announced it has completed delivery of the first batch of its XTclave manufactured plates to CPE Production OY in Finland. The company said that the shipment of 250 plates will be used by the Finnish Defence Force.

The delivery follows the initial commercial purchase in May and subsequent upsized order in June. The total value of the deal is $2 million.

The company said the acceptance of the plates is one of five Xtek products that are already qualified. The next deliveries are to be fulfilled in the near term, which will complete the contract.

Xtek Managing Director, Mr Phillipe Odouard, commented that the company is confident of continuing to make tailwinds. Mr Odouard said:

We are proud to be able to complete this initial delivery on the back of a long-standing relationship with Finnish Defence. The delivery provides validation of our technical capabilities and products, as well as our international commercialisation strategy.

We continue to make strong progress with other potential customers, including in a range of different channels in the US.

Should you invest in the Xtek share price?

I think that Xtek is an exciting company along with other players in the defence sector such as Electro Optic Systems Holdings Ltd (ASX: EOS). While Xtek is a much smaller company, valued at around $41 million, the potential use for its applications is enormous.

In light of this, I will be adding the Xtek share price to my watchlist and keeping a close eye on its performance over the coming months.

The post Xtek (ASX:XTE) share price climbs higher on international delivery appeared first on The Motley Fool Australia.

Whilst I believe Australia does not have enough companies working in this area, those that have made inroads are punching above their weight.

Space situational awareness

This was one of the most fascinating parts of the program for me. Every time humans send something into space, we create more space junk in orbit. Current scientific consensus is that there are around 500,000 pieces of space debris larger than 1 cm in Earth's orbit. Travelling at 30,000 km per hour, junk as small as 1 cm will severely damage or destroy a satellite on impact.

Electro Optic Systems Holdings Limited (ASX: EOS) is one of the early pioneers in this area through its sensor technology. For over 40 years, this ASX share's laser technology has been the standard for all space data and catalogues. Moreover, Electro Optic space tracking and debris monitoring systems now provide the benchmark for space catalogue acquisition and maintenance.

Situational awareness is increasingly important to identify active and expired satellites and orbital debris to reduce the likelihood of collisions. In addition, Electro Optic has built and operates the world's only autonomous (robotic) space laser tracking system.

Computing power in space

Brainchip Holdings Ltd (ASX: BRN) has developed an artificial intelligence (AI) technology that is ideally suited for use in space. Moreover, this ASX share has recently partnered with space mission veteran Vorago Technologies. To illustrate further, Vorago is currently in the process of planning for 19 upcoming space missions.

The Brainchip technology is well suited to space missions because it is an advanced AI chip with a low power requirement. The chip is a complete neural processor and does not require an external CPU, memory or deep learning accelerator. The reduction in component count, size and power consumption are paramount concerns for aerospace and spaceflight applications. In addition, because of the nature of this new technology, it provides for continuous operation when new discoveries or unforeseen circumstances occur.

ASX shares for space materials

Carbon composites are used throughout most assets that travel into space. It is lighter, can handle high temperatures, and has very low thermal expansion. Xtek Ltd (ASX: XTE) is a defence materials ASX share which signed an agreement with the Australian Space Agency in 2019. The agreement was to further develop its lightweight composite materials for application within the space flight industry.

Furthermore, Xtek has been working with private firm, Skykraft, since 2019. This resulted in a grant from the Space Agency to design a small satellite launch stack. Skykraft is developing technology to launch what it calls constellations of satellites. These are low orbit satellites that work together on a areas such as communication, travel, banking, and security.

The concept of constellation of satellites is not new. NASA has tried this before with large satellites. However, due to cost reductions brought about by Elon Musk's SpaceX, lightweight Xtek materials are likely to enable constellations of small scale satellites.  

Foolish takeaway

Yet again, ASX shares are punching above their weight in an industry of global importance. Moreover, companies like Electro Optic are already deeply ingrained in the management of issues related to space missions. I believe Brainchip is also likely to see its technology become the new standard for computing power in space, particularly given the advanced nature of its chip. Lastly, the Xtek work with Skykraft is also carving out a new niche in the space industry. If successful, it will also change how we engage with the final frontier. 

Aside from their work in space, each of these ASX shares plays a key role in defence and security markets globally.

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This is part of an evolution in military technology towards drones and unmanned defence systems. Moreover, since the government announcement of $270 billion in defence spending, investors have become aware of the advanced technologies of ASX shares underpinning this transformation.

I think a range of companies in this sector are likely to grow significantly over the next 3–5 years. Many now have mature technologies, ongoing sales and significant growth opportunities ahead of them. Orbital is one of 4 leading ASX shares in this sector.

More drone propulsion systems

Orbital is a global leader in propulsion systems for tactical unmanned aerial vehicles (UAVs). The company recently announced an unaudited FY20 result of $33.8 million. This was within its guidance of $25–$35 million despite the interruptions of coronavirus in Australia and client countries. I am very bullish on this company. Partly because their current client base includes subsidiaries of Boeing, Northrop Grumman, and an unnamed large Singaporean Defence Company. 

FY21 is going to be about consolidating Orbital's current situation and expanding client base. FY21 revenue guidance for this ASX share is for $40–$50 million. In particular, 3 of the company's existing clients have been selected as providers for the Australian Defence Force (ADF) Land 129 program. 

More unmanned aerial systems

Xtek Ltd (ASX: XTE) makes small unmanned aerial systems (SUAS) among many other products. In particular, it supplies the AeroEnvironment WASP AE SUAS, produced in the United States.

At present, the ADF has more than 50 of these aircraft and Xtek recently announced an additional order for $2.8 million for this model, boosting the company's existing SUAS supply contract.

In FY20, the supply of SUAS parts and maintenance to the ADF was worth $8 million. In addition, Xtek manufactures lightweight body armour, and is the primary provider to the Department of Defence for portable X-ray equipment and demolition remote firing systems.

FY20 guidance is for revenue of $42 million, an increase on $37.9 million in FY19. This ASX share has increased its production capability and can produce its patented lightweight composite materials to support $40 million per year revenue. This is planned to double during FY21.

ASX shares for drone protection

Two ASX shares are active in this area. The first is DroneShield Ltd (ASX: DRO), a company that provides protection against drones. Droneshield sells multiple sophisticated devices that are just starting to gain traction. For example, it has the Drone Gun MKIII for soldiers in the field. At the more extreme end, the Drone Node disables drones within a 1km radius.

In the past month, the DroneShield share price has risen by 15.38%. Moreover, the company has made 3 positive announcements in the past 2 weeks. First, a $100,000 order from the European Ministry of Defence. Second, a US$200.000 contract with the US Air Force. And third, the successful completion of a trial in a mid-tier European airport. The company expects the implementation tender in Q4 CY20.

The other ASX share in this space is Electro Optic Systems Hldg Ltd (ASX: EOS), which focuses on sophisticated sensor technology. This came from the privatisation of the  Commonwealth of Australia space activity, and the technology has been at the forefront of satellite tracking for more than 35 years.

Electro Optic Systems has also used this technology to build vehicle-mounted, remote-operated weapons that are battle-tested against drones. It is currently in negotiations with the Australian Government for the acquisition of 251 of these weapons. 

Foolish Takeaway

These four companies are just part of our very capable defence contracting industry. Out of all of these ASX shares, I am most interested in Orbital Corporation because I think the time has arrived for this technology, in particular. However, it is clear that we have multiple mature drone technologies capable of servicing the ADF and countries throughout the world.

The post 4 ASX shares leading the way in drone technology appeared first on The Motley Fool Australia.

One example is the Japanese Memorandum of Understanding that formalises Australia and Japan's plans to work more closely together on space and defence sectors. A second example is the US$50 million in funding from the United States government to Austal Limited (ASX: ASB). This is to maintain, protect, and expand US domestic production of steel shipbuilding capabilities for capital projects over the next 24 months. Consequently, we are seeing a mini-boom in ASX defence shares. On that note, let's take a look at three defence shares that have done very well recently.

3 surging ASX defence shares 

DroneShield Ltd (ASX: DRO)

DroneSheild has made two strong announcements this week, taking its market capitalisation to $40.39 million. The company specialises in drone security technology and is a world leader in the field. Earlier this week, it announced new contracts with both the US defence forces and the European Ministry of Defence. This builds upon an already expansive client list which also includes the European Union Police.

Dronesheild saw its share price rise by 33.33% across this week. However, it is still down by over 40% in year to date trading due to the coronavirus market crash. I think this ASX defence share is likely to see an increased level of sales due to the proven capability of its product.

Orbital Corporation Ltd. (ASX: OEC)

Orbital has enjoyed a share price increase of only 0.79% this week. However, over the past month the share price has risen by approximately 73%. The company provides propulsion systems for small unmanned aircraft or drones. In the past month, the company had a visit from the Minister for Defence, the Hon Linda Reynolds, reminding the market that Orbital is already an accomplished defence contractor.

In addition, this ASX defence share received a new contract with Northrop Grumman to design and develop a hybrid propulsion system. This will combine an electric motor with the company's flight-proven engine. The company has a current valuation of $99.31 million.

Xtek Ltd (ASX: XTE)

Xtek is a very interesting company for me. Its share price is level for this week but up by 12.7% over the past month. The company has developed a patented technology called XTclave for curing and consolidating composite materials. Xtek has already installed an industrial sized machine in its Adelaide premises. This is large enough to support ~$40 million in revenues per year, and Xtek is also looking to install another one at its recently acquired US base.

This technology is used to produce a range of products, including; armour, lightweight tactical and human carriage equipment, robotic mechanical systems and unmanned craft. In the past 2 months, this ASX defence share has announced additional contracts with the Finnish Defence Forces and the Australian Defence Forces as well as a grant from the Australian Space Agency. 

Foolish takeaway

Australia has a good number of technologically advanced defence contractors. While most of us focus on Austal and Electro Optic Systems Holdings Limited (ASX: EOS) there are also many smaller ASX defence shares that have developed technologies other countries are willing to pay for.

The post 3 surging ASX defence shares to buy next week appeared first on The Motley Fool Australia.

You see this market size discrepancy play out in almost every area of economic activity, including the healthcare space, defence, aerospace, or the housing industry. However, for some ASX shares, expansion into the US doesn't always work out for the best.

A cautionary tale 

Servcorp Limited (ASX: SRV) provides serviced offices, virtual offices, coworking spaces, and meeting rooms. Its business had been ailing for a long time in the US market, describing its problems as being too culturally Australian for the American market. Furthermore, it has recently announced a move to halve the company's US offices, naming the COVID-19 crisis as the last straw.

Treasury Wine Estates Ltd (ASX: TWE) has also been having problems in the US market for well over a year, due to an industry wide glut that has been compounded by the coronavirus crisis. This ASX share has flagged a demerger of its Penfolds business by the end of FY21. In addition, it has been under increasing pressure since the end of January to act on poorly performing US assets, particularly after a raft of departures from its US business had impacted earnings.

The retail space

So, expansion into the US can go badly, but it can also go very well. Sezzle Inc (ASX: SZL) is an ASX share that is a native US BNPL company. In fact, it is not active in the Australian market at all. In my view this provides the company with an immediate advantage over, say, Afterpay, as it already has a head start in the much larger US market.

In fact, Sezzle reported on 7 July that at the end of H2 FY20 the company had a pre-existing network of 1.48 million consumers and 16,112 merchants. Significantly, 87.5% of the company's consumers were repeat purchasers.

Chasing on Sezzle's heels in the US is its BNPL competitor, Zip Co Ltd (ASX: Z1P). Zip Co has entered the US via the acquisition of US BNPL company QuadPay. This provides it with a pre-existing network for its additional credit offerings. On completion, this will boost the company's global network to 3.5 million customers and 26,200 merchants. Of these, 1.5 million, over 3,500 merchants are from the QuadPay network in the US. 

The defence market

There are several Australian defence contractors with active operations in the US. This is a market where $729 billion was spent in 2019 alone – greater than the cumulative defence spending of countries like China, Saudi Arabia, Russia, the United Kingdom, India, France, Japan, Germany, and South Korea. 

Austal Limited (ASX: ASB) is Australia's largest ASX defence share, as well as being the world's largest builder of aluminium ships. In June, the company also announced the provision of US$50 million in funding from the US government. This is to maintain, protect, and expand US domestic production of steel shipbuilding capabilities for capital projects over the next 24 months.

In February, Austal had a forward order book of $4.9 billion, most of which is to build ships for the US Navy.

Xtek Ltd (ASX: XTE) is another Australian defence contractor with existing ties to US defence forces. The company has entered the US retail market via the acquisition of HighCom, a US body armour manufacturer. Furthermore, agencies of the United States Department of Defense use the company's electric-powered, hand-launched unmanned aircraft system. 

I think the potential for XTEK to expand in the US is huge. By purchasing an existing, successful franchise it can leverage that company's networks and sales channels. XTEK has a range of products for use by security and defence sector entities that can be distributed via these channels.

Foolish takeaway

The US is definitely the place to be for many sectors. However, not all ASX shares that try to enter the US markets are successful. I would look at companies that have either a proven track record of achievement, like Austal or Sezzle. Or alternatively, a company that has acquired a successful US-based business to give themselves a head start, such as Zip Co or XTEK.

The post ASX shares tapping into the US market appeared first on The Motley Fool Australia.

Both Australia and Japan have a well developed defence contracting sector. Therefore, I think it will be the more innovative companies in the sector that will benefit from this strengthened relationship. That is, companies with one-of-a-kind technology. Here's a closer look at 3 ASX shares that fit the bill.

Space technology

Electro Optic Systems Hldg Ltd (ASX: EOS) is one of Australia's leading defence companies formed in 1983 from the privatisation of Commonwealth of Australia space activity. Its products are based on proprietary sensor technology. 

The company is continually developing technology to help with over 500,000 pieces of space debris travelling at around 30,000 km per hour. This represents a serious threat to satellites, the international space station and more.

In this area, Electro Optic has an Australian-based space situational awareness (SSA) network. This monitors and tracks orbiting space-based objects. For instance, satellites and debris, using ground-based radar and optical stations.

The company also uses its sensors in the development of vehicle mounted, battle tested, remote weapons stations. Consequently, last Friday, Electro Optic Systems announced that it was in negotiations with the Commonwealth Government for 251 remote weapons stations (RWS) to be purchased over 12 months.

Artificial intelligence

Brainchip Holdings Ltd (ASX: BRN) is a company working in artificial intelligence (AI). It was started by a 40-year pioneer in information technology, a professional who is still with the company as its chief technology officer. The company already has successful AI products and is currently working on a first-of-its-kind technology, a neuromorphic system-on-a-chip.

Neuromorphic systems are large-scale systems of integrated circuits. Therefore, as the name implies, they mimic the human nervous system. Neuromorphic computing is considered the 5th generation of artificial intelligence by the Artificial Intelligence Board of America. 

The company has existing products used across defence and security already. It is a leading provider of security software to the casino industry for a range of security applications such as currency identification, player behaviour patterns, and game table operations.

Major airports use the product for facial recognition of terrorist suspects. In addition, unnamed European police departments have deployed the product in subways to search for known criminals. 

With the new product in advanced stages of development, the potential for further application of a system that learns for itself is very broad.

Advanced composite materials

Xtek Ltd (ASX: XTE) is a company with a patented technology called XTclave for curing and consolidating composite materials. The company has already installed an industrial sized machine in their Adelaide premises. This is large enough to support ~$40 million in revenues per year, and Xtek is also looking to install another one at its recently acquired US base.

Xtek's technology manufactures high-quality void-free, precision ballistic and structural composite solutions. This includes, armour, lightweight tactical and human carriage equipment, robotic mechanical systems and unmanned craft.

For instance, the company is the primary provider to the Australian Department of Defence for portable X-ray equipment, demolition remote firing systems, and explosive ordinance robots. Furthermore, it sells the Xtek Tac2 Sniper Rifle as well as small unmanned aerial systems (SUAS). Agencies of the US Department of Defense and allied military services use the latter.

Finally, the company also manufactures a range of ballistic armour, which is up to 30% lighter than current benchmarks due to the company's patented technology.

Foolish takeaway

The Australian defence sector is large and includes other great companies like Austal Limited (ASX: ASB), Quickstep Holdings Limited (ASX: QHL), and Bisalloy Steel Group Limited (ASX: BIS).

However, in the case of closer Australia and Japan ties, I think those companies offering a hard to replicate capability are more likely to see early success. 

Moreover, all of the companies mentioned also have either direct applications, or potential applications, in space exploration. 

The post 3 ASX shares that could benefit from Australia and Japan deepening ties appeared first on The Motley Fool Australia.

What was in the announcement?

Xtek announced that it expects financial year 2020 revenue to be in excess of $42 million. This compares to financial year 2019 revenue of $37.9 million. According to the announcement, revenue growth was driven by strong performance by a company that was recently acquired by Xtek, HighCom Armour Solutions. Revenue was additionally boosted by the supply and support of small unmanned aircraft systems. 

The company also announced that margins are improving as it shifts toward the supply of proprietary products. According to the announcement, this trend of improving margins is set to continue going forward.

The company also announced that its manufacturing capabilities had been improved. This would allow it to produce a higher volume  of its products and increase revenue. According to the company, these capabilities have the potential to produce up to around $40 million per year in revenue, which is double previous forecasts. The enhanced capabilities in manufacturing by the company included optimisation of its XTclave body armour production. Xtek has added XTclave manufacturing equipment to its production facility in Adelaide and is also adding a second machine in the US.

According to the announcement, improved manufacturing facilities will assist the company in achieving its goal of becoming a $100 million dollar business in the medium term.

Xtech also included in its announcement that it is well placed to serve a growing interest in its ballistic solutions. It expected to receive further orders in the near to medium term which underpin future revenue expectations.

About the Xtech share price

Xtech provides products for use by governments, law enforcement agencies, military, the space sector and other commercial sectors. Its products include composites, small aerial unmanned aircraft, body armour and real time contextual video. Its products are in use by Western military forces and other government agencies. 

This year has seen Xtech reach significant milestones with the opening of a production facility, initial orders received for some of its products and a grant received for work on a satellite launch by the Australian Space Agency.

The Xtech share price is up 131.6% from its 52 week low of $0.38 cents. It has risen 15.8% since the beginning of the year. The Xtech share price is up 100% since this time last year.

The post Xtek share price rises 11% on FY20 revenue guidance appeared first on The Motley Fool Australia.

Two that stood out are listed below:

The Altium Limited (ASX: ALU) share price climbed to a new high of $13.90 during trade on Wednesday. Investors have been fighting to get hold of the printed circuit board design software company's shares since August when it released an impressive full-year result and reaffirmed its long-term guidance of reaching US$200 million in revenue by FY 2020. This will be a substantial increase on the US$110.9 million it generated in FY 2017.

The Xtek Ltd (ASX: XTE) share price climbed to an 11-year high of 58 cents. The homeland security products company's shares have been on a tear in recent weeks, rising over 21% since this time last month. Investors appear optimistic that Xtek is well positioned to deliver a strong result in FY 2018. In October the company signed a $2.4 million deal with the Australian Defence Force to supply X-Ray equipment for bomb disposal purposes.

The post These 2 ASX shares just hit new 52-week highs appeared first on The Motley Fool Australia.