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Droneshield (DRO) third capital raise

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Droneshield (DRO) third capital raise

Hi MM Team, My question is about the new share issue by Droneshield. I keep getting messages about new orders galore, but no mention of profit or dividends. This is the third capital raise in about a year or so. There is 48 page "presentation" about the capital raise, which I skimmed over, but I did not find any reference to profit or dividends. When companies issue huge documents to explain moves, that could have been done on a couple of pages, I always think they hope nobody will read it! What are your recommendations/views regarding participation in the share purchase plan and is there a "chinese wall" between you and Shaws (one of the underwriters)? I do very much value your opinions, John

Answer

Hi John,

Sounds like you wear a similar skeptical hat to ourselves at times.

  • Firstly, MM is independent to SHAW and we can/do often disagree with their stance on a particular stock or sector.  James nor any of his clients participated in the DRO placement.

DRO recently reported 1H24 revenue rising 110% Y-Y to $24.1m. The highlight of the quarter is Asia becoming a new growth market for DRO to supplement EU, USA and Australia. Asia is the catalyst for the sales pipeline doubling to a record $1.1B vs the Mar-24 baseline. SHAW actually reduced their FY24 sales revenue by ~$10m to reflect a lower-than-anticipated 2Q24 sales result and their price target to $1.30 (from $1.40).

  • We have DRO in the too hard basket for now.
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DroneShield Ltd (DRO)
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