Kuwait Strikes £370 Million Air Defence Deal With Electro Optic's MARSS
Key Facts
Britain's Ministry of Defence announced in October 2026 a £370 million deal to supply Kuwait with air defence systems, to be delivered by MARSS, a subsidiary of Australia's Electro Optic Systems. The deal includes counter-drone systems across Kuwait, combining detection, command and threat countermeasures. The Australian company confirmed the customer's identity following the British ministry's announcement, while implementation of the contract remains subject to its conditions being met. These include providing a bank guarantee, receiving an advance payment and obtaining the necessary export licences. The British government expects the deal to create 100 new engineering and manufacturing jobs in the United Kingdom.
MARSS said the system for Kuwait integrates electro-optical and radar sensors and sonar equipment into a unified defence network. These sensors send data to command centres that use the "NiDAR" platform to assess threats. The assessment covers aerial and coastal maritime threats, broadening the system's scope alongside its counter-drone mission. The contract also includes an initial supply of kinetic interceptors, according to the company's statement on the deal. It also includes electronic jammers, bringing together detection sensors, a threat assessment platform and countermeasures in the contracted equipment.
The deal follows the completion of Electro Optic Systems' acquisition of MARSS's defence business, according to the latter's statement on joining the Australian group. Andreas Schwer, chief executive of Electro Optic Systems, said the acquisition takes the company from supplying interceptors to providing integrated counter-drone systems. He described these systems as powered by artificial intelligence, with a single company responsible for their design, integration and support. Schwer linked the need for this approach to the cost of countering drones, saying: "Countries can no longer counter low-cost threats with high-cost interceptors." The Kuwait contract combines interceptors and jamming equipment with the command system provided by MARSS's defence business.
The company's unconditional order book reached A$846 million in the first half of 2026, according to Investing's coverage of its results. That compares with A$459 million at the end of 2025, before the conditional Kuwait deal was announced. First-half revenue totalled A$168.8 million, up 283% year on year, according to the website's coverage of the financial results. Despite the revenue growth, the company reported a statutory net loss after tax of A$33.7 million for the same period. The Kuwait contract thus follows an expansion in revenue and unconditional orders, with statutory losses continuing in the first-half results.
The deal falls under Britain's "SABRE" initiative, which brings together government and industry to accelerate the supply of required systems and weapons to Gulf countries, according to Britain's Ministry of Defence. The United Kingdom had previously provided Kuwait with defence support that included the "Rapid Sentry" ground-based air defence missile system. In the stock market, the Kuwait deal was preceded by a rise in Electro Optic Systems shares following the company's results and outlook update in August 2026. Investing's coverage at the time said the shares rose 12.79% to A$9.70. That rise was linked to the earlier results and outlook announcement, before the Kuwait deal was disclosed in October.
According to MARSS, the systems will be delivered to Kuwait in phases over 24 months, followed by a multiyear integrated logistics support programme. Electro Optic Systems expects the contract to be profitable and generate positive cash flow over its duration. The project requires substantial working capital funding in its early stages, alongside the guarantees and approvals associated with implementation, according to the company's disclosure. The company expected the project's working capital position to turn positive in mid-2027. Implementation will begin after the bank guarantee, advance payment and export licences stipulated in the contract conditions are secured.