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XTEK reveals bullet-proof sales spike

Business

Lightweight armour manufacturer XTEK says it has received purchase orders in the past week for the supply of body armour and ballistic helmets worth $56.3m – double its entire revenue for the 2021 financial year.

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The armour, which XTEK manufactures in Adelaide’s north as well as in the United States in Columbus, Ohio, is expected to be delivered to two “undisclosed customers” over the coming weeks.

While the company is tight-lipped about its customers and shipment destinations, its ballistic armour orders have jumped by $64.4 million since March 1, just weeks after Russia’s invasion of Ukraine.

The new orders include a contract for the urgent supply of specialist ballistic armour worth $46.8 million (US$33.21m), which will be manufactured in the Columbus Ohio facility and scheduled for multiple shipments over the coming weeks.

A second order of $9.5 million was also announced last week, with items to be manufactured in Adelaide and the US.

“This new $9.5m order to quickly supply a regional customer with our high performance body armour products is a further illustration of the group’s ability to support our customers’ priority operational demands with little to no notice,” XTEK Group CEO Scott Basham said.

“XTEK’s HighCom production teams have been working around the clock now for months to manufacture our highly sought after specialist ballistic products, and we continue to be very deeply engaged with many international customers to help them solve their urgent ballistic armour supply requirements.”

It comes as a boost for the listed company that last year faced ongoing commissioning and ramp-up delays at its Adelaide Manufacturing Centre that resulted in significant cost overruns.

Headquartered in Canberra, XTEK has based its R&D operations in Adelaide for the past 13 years, developing lightweight armour plates and helmets as well as rifles and other defence-related products.

Basham said the $46.8 million order included tens of thousands of individual advanced ballistic protection items, with about 40 per cent delivered before the end of June and the remainder shipped before the end of September.

“The first bulk shipment of items will be dispatched in the 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,” he said in a statement to the ASX on Friday.

XTEK launched its state-of-the-art fabrication centre in Adelaide’s northern suburbs in 2020. However, it announced a $3.97 million loss for the 2020-21 financial year in September when its total revenues slumped to just $28 million.

This was further compounded in February when it announced an H1 FY22 loss of $6.8 million, which resulted in its share price falling to $0.17.

Although its revenues fell further in the six months December 31, 2021, to $11.52, the recent surge in sales has XTEK on track to record total revenue of more than $80 million for the 2021-22 financial year.

The company’s share price has recovered in recent months and gained a further 35 per cent boost following last week’s announcements to be $0.41 at Friday’s close, giving it a market cap of more than $32 million.

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