☕️ Drone Rising

Good morning.

Sydney-based DroneShield is the only publicly-listed drone defence play in the world. According to Capital Brief, stock in the company has rocketed 85% this year, pushing its market value above $430 million. DroneShield’s systems work to quickly detect radio frequencies and jam their signals without needing to open fire. Given the increasing use of drones in global conflicts, the company claims the potential market for counter-drone technology could be as large as $15 billion.

CEO Oleg Vornik said “investors are coming to understand that defence is not a dirty word from an ESG perspective." After an astonishing 19.5% rise in share price on Friday on no fresh news, that is probably a fair observation.

Market movers

Shares in Boral surged over 10% to settle at just over 8% by close of trading on Friday, after the construction materials firm posted a net profit of 36% in H1 2024. The company upgraded its earnings guidance to between $330 million and $350 million, up from between $300 million and $330 million. UBS analysts were surprised by how rapidly Boral controlled costs while still participating in industry pricing.

The quick sync

• KKR is expanding its sources of capital by chasing wealthy PE clients in Australia. (The Australian)

• Australia’s incoming Coordinator for Cybersecurity is likely to receive pushback on new government powers tied to controlling businesses operating critical infrastructure during cyberattacks. (Capital Brief)

• Managed funds lost a record net $31b in 2023, with more losses looming, as the ETF industry continues to surge. (The Australian)

• Two years post-IPO, investment banks are pitching APM Human Services International to sponsors as its stock continues to dive. (AFR)

• Fewer than 17% of federal business grants are awarded with proper competitive assessments between applicants, and almost $1b of taxpayer money is paid out annually. (AFR)

• US banking profits fell 45% during the fourth-quarter last year, making it the largest year-on-year drop in quarterly profits since Q2 2020. (Financial Times)

• UNSW professor and economist Richard Holden on the ‘fedcoin,’ why he is bullish on AI, and the criticality of tax reform. (Capital Brief)

• Advertising icon and philanthropist Harold Mitchell died on Saturday, aged 81, while recuperating from knee surgery. (The Australian)(ABC)

Trading floor

M&A

• JPMorgan advises new client eyeing FleetPartners acquisition, competing with Marubeni’s bid. (The Australian)

• Myer to sell Sass & Bide, Marcs, and David Lawrence brands. (AFR)

• Aurizon's upcoming half-year results will scrutinise the impact of its $2.39b acquisition of One Rail Australia in 2021. (The Australian)

• Aurora Cannabis has acquired MedReleaf Australia, a prominent medical cannabis product distributor, in a deal valued at $50m. (BNA)

• Carlyle, Hibiscus, and Jadestone vie for Woodside's Macedon assets. (The Australian)

• Macquarie analysts push for a Lynas premium should a merger with MP Materials Corp eventuate. (The Australian)

Capital Markets

• Private equity firms, including BGH Capital, target 2024 exits and aim for improved returns. (AFR)

VC

• Former Boral CEO launches Autono Drone, seeks $1.25m investment. (The Australian)

People moves

• Natasha Nankivell's GAF joins Arctos Sports Partners Fund II. (AFR)

• Shaw and Partners expands the team with ex-Morgan Stanley advisers. (AFR)

Together with Wilsons Advisory

At Wilsons Advisory, our purpose is to protect, manage and grow the wealth of our private clients, including HNWs, super funds, family offices and not-for-profits with over 125 years of distinguished history in financial services.

To discuss tailored investment advice for individuals, SMSFs and trusts, please get in touch with Gagan Johal, Investment Advisor in Private Wealth, at [email protected], call +61 7 3212 1951, or click here to schedule a call.

The watercooler