Construction and engineering giant UGL Limited (ASX: UGL) announced that it secured new contracts worth $550 million and extended existing ones during the first quarter of FY16.
UGL Unipart Rail Services Pty Ltd was awarded a $131 million project for a technology upgrade of Tangara passenger rail services. UGL has also entered into an alliance agreement for four years with Lend Lease Bouygues Joint Venture (LLBJV) on the NorthConnex Project. This project was awarded to LLBJV for the design and construction of a tolled motorway linking the M1 Pacific Highway at Wahroonga to the Hills M2 Motorway at Pennant Hills.
The company will also design and install radio communication systems for the rail sector for $55 million. It is also set to supply its premium range of bogies to GE as part of its ongoing project to deliver freight locomotives to international markets. UGL will provide comprehensive services ranging from a details design to installation and commission of earthworks for a new solar project in the Northern Territory.
According to UGL CEO, Ross Taylor,” With our secured order book remaining stable at $4.7 billion at the end of September, we remain well positioned to deliver revenue of $2.3 billion in FY16 with 90% currently sold. We are also well on track to deliver an EBIT margin of 3% as we realise the full run rate of cost savings taken out of the business in FY15.”
UGL reported a net loss of $232 million for FY15 after earning $68 million profit for the previous year. This was mainly due to a provision recognised for its Ichthys CCPP project, impairment of goodwill, restructuring costs, and profit on sale of its DTZ unit.
The UGL stock is trading at $2.42 as of 3:15 PM (AEDT). UGL has gained 10.50% year to date.
Author: Simon Herrmann
Oct 28, 2015
Simon is a financial analyst at independent research firm Wise-owl who wants to change the world by disrupting the cliché approach to investment decision making with convergent thinking. Wise-owl’s goal is plain and simple: Find the best opportunities for our members by following a proven methodology and to create long-term value through high-quality advice, innovation, technology and education. We combine industry experience and the agile mentality of a start-up. Wise-owl is the future of stock market investing.