Aerospace & Defence

Defence smallcap Quickstep Holdings expands F-35 parts supply for US giant

Thu 19 Jan 23, 11:33am (AEDT)
An F35 in the flesh on a demonstration flight at an unknown location
Source: Unsplash

Key Points

  • ASX-listed Quickstep Holdings to make vertical tail parts for Lockheed Martin’s F-35 Lighting II fighter jets
  • Company secured contract to make fuel tank and weapons bay for the jets with Northrop Grumman in August last year
  • Vertical tail parts contract to go into 2024 while fuselage manufacture with NG lasts until 2028

Aerospace & defence smallcap Quickstep Holdings (ASX:QHL)revealed it won a new order for the manufacture of vertical tail components for the F-35 Lighting II fighter jet into 2024 on Thursday.

Quickstep is an Australian company manufacturing fuselage components for US defence giant Northrop Grumman (NG).

Back in August last year, the company finalised terms for a US$105m order (A$151m) to manufacture those components over a 6 year period for NG. 

“Following our multi-year award announcement on 25 August 2022, this additional order means our F-35 vertical tail production is also underpinned by firm contracts through FY25,” Quickstep CEO Mark Burgess said.

A$11m into FY25

The new order, valued at A$11m, extends through to FY25. Existing partner Marand Precision Engineering will be the customer and the parts will ultimately go to NG to be incorporated into F-35 fighter jets. 

Specifically, NG assists in the manufacture of the F-35 Lightning II, which the Australian Air Force describes as its keystone fifth generation aerial defence asset. 

The F-35 Lighting II is actually a product spearheaded by Lockheed Martin, but with manufacturing assistance from NG. 

NG manufactures: 

  • Centre fuselage including weapons bay (made by Quickstep

  • Missile detection radar and other radar systems 

  • On-board mission planning software 

  • Pilot training software 

Quickstep Holdings has a facility in Dallas, but its Queensland operations will be the site from which its newly scored contract for vertical tail components are made. 

“We are proud to support this important international program and continue to explore opportunities for additional volume,” Burgess added. 

Want to know more? 

A Bell Potter analyst theorised in late 2022 that the “global rearmament thematic” will remain in place for the next ten years to the benefit of defence stocks. 

Using free Market Index company information, initial considerations one can make about Quickstep may lend themselves to a favourable assessment of this call. Those observations include: 

  • Company’s share price 56.5c*

  • Shares are up 1.80%*

  • Market cap of $40.5m*

  • One year returns up 29.8%

  • Year to date returns up 4.63% 

  • Average 4 week volume of 59,758 shares 

  • Ranked 108 of 189 Industrials sector companies 

  • FY23 outlook notes order backlog of $200m 

  • FY23 outlook forecasts EBITDA increase of 35% y/y

*At the time of writing

QHL's three month charts
QHL's three month charts

 

Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication.

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