The scope of their application in commercial and residential settings is only limited by one’s imagination and the regulation that will appear once their popularity grows.
From an investment perspective, the industry has suffered from both the broader IT sector sell-off and the scourge of expectation.
Speculators jumped in early to capitalise on an emerging new trend before any fundamentals emerged. However, many have since departed as progress has been measured.
While still an emerging theme to some degree, recent developments and the pandemic mean we’ll shine a spotlight on drone businesses closer to delivering on investors’ expectations today, than two years ago.
Quickstep Holdings (ASX: QHL)
Quickstep is a relatively new player in the drone space following its recent partnership with Swoop Aerospace and its investment in Carbonix. The aerospace components business better known for production of F-35 fighter jet parts has experienced turbulence in the past, but sees drones as a key component of its growth outlook.
It points to the imminent rollout of its first logistics drone in the third quarter of 2022, as well as the imminent production of the Volasi drone and its place in the Swinburne and Victorian state government Airhub project as evidence that drones can contribute to the company moving forward.
Orbital Corporation Ltd (ASX: OEC)
Orbital Corporation designs and manufactures engine systems for military drones and has been the beneficiary of both local and federal government financial support. The company has an impressive list of contacts including Textron Systems and Insitu (owned by Boeing). Both are highly regarded in the drone defence space. The latter recently won a contract to help the Australian Army deliver 24 UAV as part of the LAND 129 phase 3 project.
Orbital is keen to expand on its list of existing clients and wishes to leverage off its reputation for superior engine technology to pursue a growing pipeline of opportunities within the defence, civil and commercial sectors.
Elsight Ltd (ASX: ELS)
Elsight is a communications business that has adapted its HALO connectivity technology onto UAVs. The company says its sixth-sense solution is the modern solution for drone connectivity offering unlimited range with better performance than current connectivity solutions. It says the solution also facilitates enhanced beyond visual line of sight capabilities.
The most exciting development has been the first commercial order of HALO units to DroneUp, a US-based UAV services provider, which has Walmart as a large strategic investor. The intention is drones will deliver packages, connected with HALO technology.
Droneshield Ltd (ASX: DRO)
The covertness of drones has raised many ethical and security questions.
Droneshield aims to protect the interests of governments by offering technology solutions to protect against drone intrusion. The company experienced rapid revenue growth in the last financial year and has commenced 2022 with a string of contract wins across military services including some related to the Ukraine conflict. It also sells drones to local law enforcement agencies.
Pleasingly, it has also won its first client following its admission to the US General Service Aviation list of preferred suppliers, a pipeline the company hopes yields more results. Droneshield expects to benefit from, and is positioned for, an increased demand for drone defence over the coming years.