Azzet reports on three ASX stocks with notable trading updates today.
Droneshield soars after receiving largest ever order
Shares in Droneshield (ASX: DRO) were up a whopping 20% at the open after the defence large cap stock updated the market on its largest single order which alone exceeds its total revenue for 2024.
While the market has become accustomed to a momentum of good news from this counter drone technology company – which has seen the share price skyrocket 178% year to date, today’s announcement marks a quantum jump in order size.
Following on from $0.5 million in orders for 2024, Droneshield has received a package of three standalone follow-on contracts worth $61.6 million from its privately owned in-country European reseller.
The reseller is contractually required to distribute the products to a European military customer.
Today’s release notes that these contracts - for handheld detection and counter-drone systems and associated accessories - are expected to be delivered throughout the third quarter of FY25.
Cash payment for the order is expected in both the third and fourth quarters.
Commenting on today’s announced orders from the undisclosed end customer DroneShield’s CEO Oleg Vornik was quick to remind the market that following the $32.2 million repeat order announced on 14 April 2025 for another customer, the company’s products are now being purchased in material quantities.
“The scale and frequency of orders has been increasing as leading Military customers are moving from testing hardware to broader rollouts. DroneShield is well placed to meet the increasing demand,” he said.
In a separate market update released this morning, Droneshield revealed year to date revenues of $161 million compared with $57.5 million in FY24.
The company disclosed a sales pipeline of $2.41 billion, 100% up to its $1.2 billion estimate flagged in January.
European pipeline sales are the largest at $1.1 billion, followed by the US at $663 million and Asia excluding China at $443 million.
The company had a cash balance of $198.1 million at 20 June.
Xero halts after announcing major acquisition
Shares in Xero (ASX: XRO) entered into a trading halt this morning after agreeing to buy New York-based accounting platform Melio Payments for US$2.5 billion.
Adding Melio’s world-class team technology platform solutions to Xero would arguably turbocharge the group’s North America scale. However, initial responses to the deal are mixed.
While Citi remains Buy rated on Xero with a $210 target price, it’s flagging a negative market reaction to the share price once it resumes trading.
What’s concerning Citi isn’t the deal per se but the way it’s been constructed, which is expected to significantly dilute Xero’s profit margins.
The group’s binding agreement is to acquire 100% of Melio, with $3.9 billion in cash and scrip in upfront consideration.
The deal, which includes a $1.85 billion institutional placement involves the issue of a whopping 10.5 million new shares at $1.76 per share.
While issuing new shares can lead to a stock selloff, it avoids capital raising that has to be paid back.
However, increasing a company's outstanding shares can and does dilute existing shareholders' company ownership.
But despite the nature of this deal and any [short-term] impact on the share price, Citi is in favour of the deal and expects it to help Xero to control more of the economics in the U.S. by directly owning one of the core 3x3 jobs-to-be-done.
“… we think the syndication capability and being embedded with banking partners could help accelerate Xero’s core accounting growth in the U.S., as we see the banking channel as an attractive small-medium business acquisition channel,” the broker noted.
“Overall we see potential for the share price to be weak initially due to big multiple and FCF margin dilution but view the acquisition as helping Xero with scale and should also help amortise the U.S. brand spend over a larger base.”
Xero’s guidance for FY28 revenue to more than double, notes Citi implies a 15% upgrade of the consensus revenue estimate on a pro forma basis including revenue synergies, neutral to slight upside to consensus free-cash flow consensus of $850 million, and a 5% downgrade on a free cash flow per share basis.
Xero has a market cap of around $30 billion; the share price is up 24% in one year and up 155 year to date.
The stock is in a strong bullish trend confirmed by multiple indicators.
Consensus is Moderate Buy.
SRG Global moves higher on trading update
Shares in SRG Global (ASX: SRG) were trading 5% higher at noon after opening this morning 11% higher after the diversified infrastructure services company updated the market on a series of new major contracts.
The company has secured $850 million in new contracts across Australia and NZ with repeat, blue-chip clients, including long-term shutdown maintenance contracts, dam anchoring, hydro refurbishment, and new data centres.
Notable wins include:
- A Dam Anchoring contract with Seqwater to deliver staged strengthening works of the North Pine Dam, in South-East Queensland.
- A five-year term contract for asset integrity and reliability services with Origin Energy Ltd (ASX: ORG) at its Darling Downs, Eraring, and Shoalhaven Power Assets across Queensland and New South Wales.
- A contract with Genesis Energy Ltd (ASX: GNE) to refurbish penstocks at the Waikaremoana Hydro Scheme in the North Island, New Zealand.
- A Water Infrastructure contract with Hunter Water for the construction of water mains to distribute water from the planned Belmont Desalination Plant in Newcastle, New South Wales.
- Genesis Minerals Ltd (ASX: GMD) has awarded the company a 3 + 1 year term contract to provide specialist production drill, blast, explosives and grade control services at the Jupiter gold operations.
- BHP Group Ltd (ASX: BHP) has awarded the company an asset integrity and reliability services term contracts with BHP Iron Ore in the Pilbara, BHP Copper SA assets in South Australia, Alcoa's refineries in the south-west of Western Australia, and Anglo American's assets across Australia.
Meanwhile, additional contracts have been awarded by South32 Ltd (ASX: S32), Sydney Metro, Curtin University, and NextDC Ltd (ASX: NXT), among others.
The contracts vary from immediate commencement to staged completion through 2026.
Managing Director David Macgeorge told the market that new contracts highlight the company’s diversified growth trajectory and repeat-client strength.
“We continue to secure a number of significant contracts across Australia and New Zealand in a broad range of sectors with blue-chip repeat clients,” he said.
“These contract awards are a further demonstration of our market-leading capabilities as a truly diversified infrastructure services company and positions the Company well to continue to deliver long-term sustainable growth.”
The stock’s share price has soared 500% over five years and has managed to grow its earnings per share at 35% a year.
Total shareholder return over the last five years was 728%.
SRG Global has a market cap of $993 million; the share price has virtually doubled over one year and is up 18% year to date.
The stock is in a strong bullish trend confirmed by multiple indicators.
Consensus is Strong Buy.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
