Pouring orders stimulate ASX defence sector, Electro Optic Systems Holdings, Austal on the go
December has been an active month for the following defence stocks as a wave of contract wins has improved sentiment and created compelling opportunities for investors who seek exposure to this sector.
Electro Optic Systems Holdings Limited (ASX: EOS)
Electro Optic Systems Holdings Limited on 19 December announced that it secured a new order for its R400 Remote Weapon System RWS valued at US$21 million.
The RWS units are being supplied in a ground-to-ground configuration and will be manufactured at the company’s Canberra facility across 2026 and 2027 with the order covering the systems, vehicle integration kits, storage services and related items.
On 15 December, the company announced that it entered into a binding conditional agreement with a customer in the Republic of Korea at a total contract value of US$80 million.
The company also confirmed the completion of its acquisition of the UK based interceptor business from MARSS Group for €5.5 million under which EOS acquired all interceptor assets along with the specialist engineering team.
As of 30 June 2025, the Group held $130.3 million in cash which provides a strong liquidity buffer to support growth initiatives in the upcoming years.
Austal Limited (ASX: ASB)
on 19 December announced that it has secured a further contract extension for the construction of two additional Evolved Cape Class Patrol Boats for the Australian Border Force.
This contract is valued at more than $135 million and lifts the total number of Evolved Cape Class Patrol Boats awarded to Austal to 14 vessels which makes the partnership between Austal and the Australian Border Force much stronger.
The company also announced on 18 December that it was awarded a $1.029 billion Design and Build contract for the Landing Craft Medium program under the Strategic Shipbuilding Agreement signed with Commonwealth of Australia.
Construction of the first Landing Craft Medium vessel is expected to begin in 2026 while the 18th and final vessel is scheduled for delivery in 2032.
For FY25, Austal reported revenue of $1.8 billion which represents growth of 24.1% compared to the prior year while NPAT was $89.7 million and company has guided to EBIT of $135 million for FY26.
DroneShield Limited (ASX: DRO)
on 16 December announced that it secured a $49.6 million contract to supply handheld counter drone systems, accessories and software to a European military end customer which has reignited momentum in the stock price.
The company holds a large portion of the required inventory on hand and expects to complete all deliveries in Q1 2026 with cash payments also expected to be fully received in Q1 2026.
DroneShield has also secured a $25.3 million contract in Latin America which will be delivered and paid across Q4 2025 and Q1 2026.
The company delivered an exceptionally strong 3Q25 performance with revenue of $92.9 million compared to $7.8 million in the same quarter last year.
The balance sheet is very strong with a cash balance of $235.2 million as of October and no debt which gives flexibility to invest in research, manufacturing expansion and global sales execution.
(Source: Company Reports)
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