The Decmil Group Ltd (ASX: DCG) share price is moving higher this morning following the announcement of a new contract win for the construction and engineering group.
Today’s update comes only 3 days after the company advised it had been awarded a $140 million contract to upgrade the Gippsland rail.
At the time of writing, the Decmil share price is trading 3.6% higher at 57.5 cents a share.
Bruce Highway to get an upgrade
According to the release, Decmil has secured a $25 million contract from the Queensland Department of Transport and Main Roads (DTMR). The contract involves upgrading a stretch of the Bruce Highway between Gin Gin and Benaraby.
As per the scope, Decmil will be responsible for road widening works, safety improvements, minor drainage repairs/enhancements, pavement, line marking, signage, safety barriers, landscaping, and street lighting. The works will commence this month and are expected to be completed by late 2022.
The company noted its strong track record for delivering infrastructure projects, specifically on the Bruce Highway. Today’s win is certainly music to the ears of Decmil shareholders. Notably, this is in addition to Decmil’s current $13.5 million works on the Bruce Highway between Calliope River and Mt Alma. Works are said to be progressing on the program.
Decmil CEO Dickie Dique stated, “Successfully delivering numerous projects for DTMR and our successful progression of another Bruce Highway contract was a key factor behind Decmil winning this contract.”
Reduction in Gippsland share
Decmil also snuck in an update to its recent Gippsland rail contract win. Decmil advised its share in the $300 million consortium with Arup and Cimic Group Ltd (ASX: CIM) subsidiary UGL will now be $120 million, rather than the initially stated $140 million value.
Consequently, Decmil’s announcement is a net increase of $5 million in contract value for the engineering company.
Decmil share price under construction
Decmil suffered a share price collapse of nearly 90% in late 2019. Since then, the company has undergone a board refresh and equity raise to set the business back on track. Despite this, the group’s share price has sunk 65% over the past 12 months.
However, with several contracts wins in recent months, Decmil is attempting to grow its pipeline and increase its profitability again. At the end of December last year, the group reported having $600 million of work in hand, 70% of which are government contracts.
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- Cimic (ASX:CIM) share price falls despite positive update
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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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