RocketDNA (ASX: RKT) has delivered an action-packed quarterly report for the three months ending September 2024, bolstered by new contracts, sector diversification, and a focus on autonomous drone technology. The company’s strong performance highlights its strategic push into new markets, including law enforcement, while maintaining a solid foundation in mining.
Key Contracts and Sector Expansion
During the quarter, RocketDNA signed four new contracts valued at $3.52 million, pushing its total contract value (TCV) to $6.33 million by 30 September. Among these deals was a groundbreaking agreement with the Western Australian Police Force (WAPOL) to supply autonomous drones for their innovative Drone as First Responder (DFR) program. This marks RocketDNA’s entry into law enforcement, a significant expansion beyond its traditional mining and infrastructure focus.
RocketDNA’s xBot® drone system will play a critical role in enhancing airborne law enforcement across the state, providing real-time intelligence for surveillance, emergency response, and search-and-rescue operations. While the initial contract term is three years, there’s an option to extend for an additional two years, potentially opening doors to further long-term opportunities in public safety technology.
In the mining sector, RocketDNA continued to deepen relationships with existing clients. The company renewed a three-year contract with Black Mountain Mining (Pty) Ltd, a subsidiary of Vedanta Zinc International, valued at AU$525,000. Additionally, a major two-year contract extension with Rustenburg Platinum Mines, a subsidiary of Anglo American, saw RocketDNA securing AU$2.65 million in additional contract value for surveying and security services across Anglo’s operations.
Diversifying into Security with Autonomous Solutions
RocketDNA’s September quarter also marked its foray into the security sector with two contracts signed with SSG Security Solutions Pty Ltd. These contracts deploy RocketDNA’s autonomous PatrolBot drones to monitor critical perimeters at mining sites, offering advanced, AI-driven surveillance. The PatrolBot can autonomously detect and respond to potential threats, providing round-the-clock security without the need for constant human supervision.
These contracts not only highlight the versatility of RocketDNA’s autonomous solutions but also reflect the growing demand for advanced security technology in high-risk industries. The total contract value of these deals comes in at AU$350,000 over the 12-month period, underscoring the company’s capability to secure high-value assets in remote locations.
Strengthening Cash Flow and Financial Stability
In terms of financial performance, RocketDNA secured a $1 million unsecured debt facility to accelerate the deployment of its xBot® solutions. This funding, provided by Altor Capital Pty Ltd, gives the company crucial financial firepower to fuel its growth strategy, especially as it scales operations in both existing and new markets.
RocketDNA’s cash balance stood at $1.631 million as of 30 September, up from $1.439 million in June, reflecting efficient cash management and operational discipline. Net cash used in operating activities improved significantly, with a reduction to $106,000 from $192,000 in the previous quarter. This improvement is attributed in part to the absence of one-off tax payments made in the previous period. The company also reported a $555,000 inflow from financing activities, primarily from the first tranche of the Altor debt facility and a sale and leaseback transaction on drone equipment.
Forward-Looking Growth and Opportunities
Looking ahead, RocketDNA’s growing sales pipeline signals continued momentum. The company is actively negotiating opportunities in sectors ranging from mining to infrastructure, government, and insurance. A key post-quarter highlight is a purchase order from WSP Australia Pty Ltd to deploy xBot® drones at a major copper mine in South Australia for tailings dam monitoring. This underscores the ongoing demand for RocketDNA’s drone technology in industrial applications where safety and precision are paramount.
Commenting on the quarter’s achievements, RocketDNA’s Managing Director and CEO, Christopher Clark, said, “This quarter marks a pivotal moment in RocketDNA’s journey, not just through the expansion of our mining sector partnerships but also with our first steps into law enforcement and security services. Securing these high-profile contracts demonstrates the increasing demand for our autonomous drone solutions across various industries.”
With a robust pipeline, diversified market reach, and a focus on innovation, RocketDNA is well-positioned to continue its upward trajectory. As Clark notes, “The future looks bright for RocketDNA as we continue to innovate and deliver cutting-edge solutions to our customers.”
