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ASX-listed defence-focused manufacturer Quickstep Holdings (ASX:QHL) has confirmed it will continue making F-35 fighter jet components until FY27.
The company will also continue to make parts for Lockheed Martin C-130 Hercules transport aircrafts until FY29.
However, as for its F-35 operations, the company expects overall demand through FY25 – FY27 to be on average -8% lower than the FY23-FY24 period.
The company asserted on Tuesday due to streamlining knowledge it’s gained from consistent orders under the existing contract, it’s able to keep margins where they are despite slightly subdued demand.
The company on Tuesday described the fighter program as being at the “midpoint” of its expiry life.
“Quickstep has been working closely with its customers to establish production schedules which meet their demand profiles,” the company wrote. No meaningful explanation on why demand would be falling -8% was offered.
Meanwhile, the company expects demand for C-130 parts to remain steady – and margins to further improve.
From mid-FY25, Quickstep anticipates to be sending out 20 sets of parts for the transport turboprops per year into FY29.
The microcap company – at $12.5M – has been posting weakened returns in recent history despite the robust defence thematics lifting some counterpart stocks. One year returns are down -30% and the stock is fairly illiquid.
QHL last traded at 17.5cps.
