Here’s why this ASX tech share is surging 12% today

While the All Ordinaries (ASX: XAO) is climbing 0.18% today, the Damstra Holdings Ltd (ASX: DTC) share price is rocketing.

This follows an announcement from the workplace management solutions company regarding Victoria’s $15.8 billion North East Link project.

At the time of writing, Damstra shares are swapping hands for 22 cents, up 12.82%.

What was in Damstra’s announcement?

Investors are buying Damstra shares after the company provided a positive update to the ASX this morning.

According to its release, Damstra advised it has been appointed as a technology partner for the North East Link project.

In what will be Victoria’s largest road project, the North East Link project will fix the missing link in the city’s freeway network.

Building the state’s longest twin road tunnels, the design delivers an overhaul of the Eastern Freeway, Melbourne’s first dedicated busway, completion of the Ring Road in Greensborough and a North East Trail with more than 34km of walking and cycling paths.

It’s estimated up to 135,000 vehicles will use the North East Link each day, reducing congestion on other major roads.

The Spark Consortium, which is in charge of ensuring the project is delivered, comprises a number of companies. This includes Cimic Group Ltd (ASX: CIM) companies CPB Contractors, Ventia and Pacific Partnerships, Italy’s WeBuild, South Korea’s GS Engineering and Construction, China Construction Oceania, Capella Capital, John Laing Investments and DIF.

The project is expected to deliver new $4.9 million of revenue for Damstra over six years (average $816,000 per annum).

Under the partnership, Damstra will provide mobilisation systems via its Enterprise Protection Platform (EPP) to approximately 15,000 users. This will allow utilising the workforce management, Damstra Learning and digital forms modules.

Mobilisation for early work projects is forecasted to commence sometime during the third-quarter of FY222. Full project implementation will follow in FY23.

What did management say?

Damstra CEO, Christian Damstra commented:

We are very pleased to announce this significant long-term arrangement with the Spark Consortium, which will be a major new client for Damstra.

We believe it reflects confidence in Damstra’s ability to provide critical services for workers and contractors for large-scale infrastructure projects and demonstrates the strength of our integrated EPP offering. It also leverages the strength of our construction vertical which has continued to rebound strongly since COVID restrictions began to lift.

About the Damstra share price

It has been a turbulent 12 months for Damstra shareholders, with the company’s shares down more than 25%. The downfall began after Damstra reported its disappointing half-year results for FY21 in February.

Damstra has a market capitalisation of roughly $58.63 million, with approximately 257.70 million shares on its books.

The post Here’s why this ASX tech share is surging 12% today appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Damstra Holdings Ltd. The Motley Fool Australia owns and has recommended Damstra Holdings Ltd. 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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