Shares in DroneShield Ltd (ASX:DRO, OTC:DRSHF) surged as much as 12% to a record A$3.09 after the company unveiled major capacity expansion plans, coinciding with news that French President Emmanuel Macron will bring forward a significant defence budget increase. Macron announced that French military spending will double to €64 billion by 2027 — three years ahead of schedule.
“In response to rising threats and multiple wars taking place across the globe, Australia’s allies are increasing investment in modern defence capabilities,” DroneShield CEO Oleg Vornik said.
“We are stepping up to meet this demand by investing in state-of-the-art facilities here and abroad, and in sovereign Australian skills development to provide the most modern and effective counter-drone capabilities in the world. Our new facility in Alexandria will epitomise the value Australian engineering can bring to a changing geopolitical landscape.”
DroneShield will invest more than A$13 million into a new 3,000-square-metre production facility in Alexandria, Sydney. The facility, secured under a multi-year lease with fitout scheduled for completion by December 2025, will include in-house production, testing and warehousing capabilities. It marks the company’s largest facility to date — more than triple the size of its current production floor.
Boost to production and R&D capabilities
The expansion adds to DroneShield’s existing 2,500-square-metre research and development space at its headquarters. The current production area will be repurposed into additional R&D space, increasing total R&D capacity to 5,530 square metres.
Once complete, the company expects to scale its annual production capacity to A$900 million by mid-2026 and total manufacturing capacity to A$2.4 billion by the end of 2026.
The investment supports DroneShield’s ambitions to capture a share of its A$2.34 billion global sales pipeline, with Europe identified as the fastest-growing export market.
Shares were up 7.22% at A$2.970 just after midday on Monday.