11th Apr 2014 10:47
LONDON (Alliance News) - Ultra Electronics PLC Friday confirmed that it has contributed 1,008 sonobuoys to the Australian Air Force to assist in the search for the missing Malaysia Airlines Flight 370.
The technology company received an order earlier in April from the air force, as part of the effort to pick up a transmitting signal from the black box of the missing plane before the batteries in the black box dies, a spokeswoman told Alliance News.
The sonobuoys will be dropped from the aircraft in a grid pattern, and their underwater microphones will listen for transmitter signals.
The air force will pick up the emergency order on Saturday, and will potentially pick up more if needed.
The flight went missing March 8 and has been the subject of a wide scale search over the last few weeks. No reason for its sudden disappearance has been ascertained.
Liberum analyst Ben Bourne said that whilst the single order, which has a value of around USD3 million is "not need moving" is highlights the company's niche high-tech exposure.
Bourne said that the company is well placed to benefit from an evolving global defence strategy. While defence spending in the US and Europe is on the decline, in Asia it's on the rise, with increasing demand from growing powers who are looking to boost their stock of submarines. Malaysia and Vietnam have recently acquired their first submarines while Thailand is looking to purchase it's first in the near future, and China is reported to possess about 70 already, says the analyst.
"An Asian arms race has been widely reported and submarines are on every nations shopping list," says Bourne.
Liberum reiterated its buy rating for the company, with a price target of 1,955 pence.
Shares in Ultra were trading down 1.4% at 1,674.00 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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