Orbital up on FY19 guidance, new agreement

Shares in Orbital Corporation jumped 16 per cent today, after the local tech company announced a contract extension with multinational The Boeing Company and provided revenue guidance of $24 million for the 2019 financial year.

Orbital shares finished up 16.13 per cent at 54 cents each today.

Orbital provides integrated propulsion systems and flight critical components for tactical unmanned aerial vehicles (UAVs).

Orbital said it had expanded a long term agreement with Boeing subsidiary Insitu, worth between $120 million and $350 million over the next five years.

Under the new contract, the company will provide multiple propulsion systems and services across Boeing’s range of unmanned aircraft system platforms.

Orbital will assemble, supply and overhaul three propulsion systems, along with two engines designed by Boeing.

“We are delighted to have signed this revised LTA with our key customer Insitu,” Orbital chief executive Todd Alder said.

“The increased scope and scale of work within the agreement demonstrates Orbital UAV’s ability to meet the growing requirements of the rapidly evolving UAS market and represents a key milestone in the company’s strategy to deliver sustainable growth.”

The company also said it was expecting revenue of $24 million in FY19.

“With our U.S. production facility now operational, the expanded LTA with Insitu, and the development of our Modular Propulsion Solution, the coming year, and beyond, promises to be an exciting period for Orbital UAV,” Mr Alder said.