Data centre and rail contract wins have boosted this engineering firm’s shares

Shares in Southern Cross Electrical Engineering Ltd (ASX: SXE) were trading higher on Tuesday after the company announced $90 million in new contracts across data centres and rail.

The company said in a statement to the ASX that it had been awarded a range of works on DigiCo Infrastructure REIT (ASX: DGT)’s SYD1 project located in Sydney’s inner-west, where the existing data centre is being expanded with additional levels and increased power capacity.

Package of work won

Southern Cross subsidiary Heyday has been awarded the design and construct scope “for the installation of low-voltage switchboards, busways, generators, and UPS systems, along with the supply and installation of cable containment, LV reticulation, lighting, and general power systems”.

Fellow subsidiary Force Fire has been awarded the fire services and design and construct works for the project, in addition to demolition works it had already completed.

In addition to this, Trivantage Manufacturing had received an order for the supply of electrical switchboards, and would work closely with Heyday on the design.

The company said further re the switchboards:

They are being manufactured locally at our Sydney facilities and are expected to reach completion in accordance with the approved project schedule.

In rail, Southern Cross said it had been awarded a package of work relating to Sydney Metro’s St Marys Station Project, with that work relating to the electrical and communications systems.

Experience a key differentiator

Southern Cross Managing Director Graeme Dunn said it was pleasing to win new contracts in both sectors, which the company had deep experience in.

He went on to say:

I am pleased to be announcing further awards in the data centre and rail transport sectors which have been strong and growing sources of activity for us. I note that in both this particular data centre facility and on the Sydney Metro infrastructure development generally, we have done significant volumes of work previously and so to secure these new works is a testament to the quality of our past delivery. I also observe that on both of these developments we are drawing on multiple disciplines from across the group, which not all of our competitors are able to match. This of course benefits us as we are able to get more out of each project, but I believe also benefits our clients as we are able to deepen our relationships with them and better co-ordinate delivery across disciplines to them.

Southern cross shares were 2.5% higher on Tuesday morning at $2.46. The company was valued at $638.3 million at the close of trade on Monday.

The post Data centre and rail contract wins have boosted this engineering firm’s shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Southern Cross Electrical Engineering. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.