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Consensus community valuation
$0.470
Average Intrinsic Value
260.9%
Undervalued by
Active Member Straws
#ASX Announcements
Added 4 months ago

9th March 2020

DroneShield Ltd (ASX:DRO or DRO.AU) (“DroneShield" or the “Company”) is pleased to advise it has received an approximately $460,000 order from a major agency of the United States Government.

The delivery of, and payment for, the order are expected to occur in 2Q2020.

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#Bull Case
Added 5 months ago

"Earlier this month, DroneShield has announced that the United States Army has selected its wholly owned US subsidiary DroneShield LLC to advance to Phase II of Expeditionary Technology Search program (“xTechSearch”).

DroneShield is now pleased to announce that following Phase II evaluation round, it has been progressed to Phase III of the evaluation process. Phase III will be held on 17-19 March at the 2020 Global Force Symposium & Exposition at Huntsville Alabama. The 2020 AUSA Global Force Symposium & Exposition is a 2 ½ -day event that will include presentations from the Army, DoD and industry related to the future of the Army.  There is a cash grant award associated with progressing to Phase III. 
 
xTechSearch is sponsored by U.S. Army's Assistant Secretary of the Army for Acquisition, Logistics, and Technology. It enables the selected private sector companies to collaborate with the Army to tackle the most critical Army modernisation challenges.
 
The Army xTechSearch program provides non-dilutive funding to selected private sector companies to demonstrate their technologies pertaining to Army challenges. The program also drives to integrate these businesses into the Army's Science and Technology ecosystem by providing research opportunities with Army labs, including authorized access to the Army's organic intellectual and technical capital.
 
DroneShield LLC has been selected on the basis of Artificial Intelligence/Machine learning algorithms within its drone detection products."

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#Q4 2019
Added 5 months ago

Based on Q4 relased today

-3m in rev (150% sales growth v 2018)

-8.5m OpEx (35% growth v 2018)

If you check the "sales pipeline" they notify of in each Q statement, they seem to keep pushing back the expected date of winning the same tender. Not a good sign, suggests management has unrealistic expectations of the time it takes to execute contracts and win tenders.

 

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#Financials
Added 6 months ago

14 January 2020

Australian Department of Defence Payment Receipt

DroneShield Ltd (ASX:DROor DRO.AU) (“DroneShield" or the “Company”) is pleased to confirm it has received an approximately A$300,000 payment from the Australian Department of Defence for a small quantity of its DroneGun TacticalTM product for a third order from this customer, placed in December 2019 and delivered this month.

This order follows on two earlier Australian Department of Defence orders for DroneShield’s RfPatrol TM product

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#ASX Announcements
Added 5 months ago

Quarterly Report

For the date ending 31 December 2019

The quarter’s key highlights are as follows.

  • The Company’s cash inflows from customers were approximately $752,000, well over double those of the previous quarter’s.
  • Approximately $3.2 million in customer cash receipts in 2019 (not including grants), a substantial increase on the $1.3 million of cash receipts in 2018.
  • The Australian Department of Defence placed its third order with DroneShield – DroneShield has secured 100% of the DoD’s reported counterdrone business to date.
  • DroneShield continues to work towards the execution of a formal contract in relation to the previously announced $60 million - $70 million Middle Eastern order.1
  • The fact that DroneShield’s system purchased by the customer prevented a real-life threat to the President of the Philippines has highlighted DroneShield’s leadership position globally.

The December quarter saw the Company incur net cash outflows before cashflows from financing of $2.24 million. While this is an improvement relative to the cash outflow in the previous quarter, this is a substantial outflow compared to that of the Company’s prior quarters (the second half of 2018 and first half of 2019 had seen the Company consistently reduce its net cash outflows, including to a negligible level in Q2 2019). Several one-off expenses contributed to the net cash outflow during the quarter. In particular, as foreshadowed in the Company’s prior announcements in relation to the proceeds of its August 2019 capital raising, during the quarter, the Company incurred substantial expenditure on inventory. This inventory expenditure included both the production costs associated with the remainder of the $3.2 million Middle Eastern order being currently manufactured, and inventory build- up in anticipation of several other large near term order s, to enable faster delivery and customer payment.

Review of Selected Deployments During the Quarter

In the past, even the most capable law enforcement and military agencies have generally been helpless against the threat of rogue drones. While counterdrone equipment is designed to change this, until recently, the Company was not aware of any instances in which its or any of its competitors’ products were publicly reported to have directly saved lives or produced tangible law enforcement outcomes for their users. That changed during the quarter, when DroneShield’s systems were reported to have potentially saved the life of the Philippines’ President, and on a separate occasion to have assisted U.S. law enforcement in locating and arresting a drone operator whose actions threatened a major football stadium during a busy event.

Sales

DroneShield expanded the range of its customers and sales during the quarter, and has a substantial near-term sales pipeline.The Company currently offers its products in approximately 70 countries and the diversity of its pipeline is one of its key strengths. Import antly, with a wide distribution network and a history of orders from a variety of customers, DroneShield is not dependent on any one customer or any one existing or potential contract for its success.

...

The Middle East

The $3.2 million prior Middle Eastern defence order has established the Company’s ability to sell in the Middle East. Several countries in the region have been the subject of highly publicised drone attacks by non-state actors. The current Iran situation (refer to the “Environment” section below) is also having a positive effect on DroneShield’s business in the region.The Company is in a number of sales processes in the Middle East, in multiple countries, across military, Ministry of Interior / law enforcement, and oil facility customers.

...

The United States Department of Defense

During the December quarter, DroneShield bolstered its U.S. office by adding business development staff to support its focus on the U.S. military and Government agencies. The US DoD has been increasing its focus on the counterdrone space, with a dedicated counterdrone office based in Arlington Virginia and managed by the U.S. Army currently being set up for the first time. The DoD’s counterdrone office’s initial focus , according to statements by Undersecretary of Defense for Acquisition and Sustainment Ellen Lord will include review of all counterdrone activities conducted to date across the U.S. military.

...

Australian Department of Defence

During the quarter, DroneShield won its second order with the Australian Department of Defence (DoD) for its RfPatrolTM portable unmanned aerial system (drone) detection devices. DroneShield won the contract following an open tender process. The contract was for approximately A$700,000, consisting of a combination of an initial purchase price and an annual subscription component. DroneShield has received the payment of the initial purchase price.

...

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#Market Size
Last edited 5 months ago

Estimated 2018 anti drone market $499m USD, growing at CAGR 28% to $2,300m in 2024

https://www.marketsandmarkets.com/Market-Reports/anti-drone-market-177013645.html?gclid=EAIaIQobChMIvfqeh_XH4wIVUwwrCh2U-AsNEAAYASAAEgKFV_D_BwE

H1 2019 revenue of $2m AUD, let’s make that $4m for 2019CY. Puts DRO at just under 1% market.

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#BUY/SELL Indicators
Last edited 5 months ago

These are the indicators i will be monitoring going forward

Buy/Hold

  • DRO winning tenders (revenue disclosed in quartley reports vs previously listed tenders applied for)
  • DRO increasing captured estimated market
  • DRO winning big military/police force tenders

Sell

  • Failure to increase market share
  • OpEx increasing far faster than revenue
  • Product failure and drop of current contracts
  • Competitors winning tenders over DRO
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