The Motley Fool

CIMIC shares could rebound after announcing $260 million in contract wins

The CIMIC Group Ltd (ASX: CIM) share price continued its poor run and sank to a 52-week low of $32.82 on Thursday.

But the global contractor’s shares could rebound this morning after the release of a late announcement yesterday.

What did CIMIC announce?

After the market close on Thursday CIMIC announced that its services company, UGL, has been awarded new rail and mining services contracts across Australia. In total these contracts are expected to generate combined revenues of approximately $260 million.

According to the release, in the rail sector UGL has secured additional work in operations, maintenance, and manufacturing services.

Its joint venture has been awarded a contract extension by Transport for NSW to increase the size of the New Intercity Fleet. This will see the joint venture build and maintain additional passenger cars, increasing the total New Intercity Fleet to more than 550 carriages. Maintenance services will then be provided for 15 years from the first train delivery.

Another rail contract is with Pacific National and will see UGL build four new diesel locomotives.

In the mining services sector UGL has been awarded contracts to deliver multi-disciplinary services for up to three years. These include mechanical and piping, electrical and instrumentation, painting, and insulation services.

The managing director of the UGL business, Jason Spears, was very pleased with the new contracts.

He said: “We are extremely pleased to be recognised as a trusted and established partner to our clients in the rail and mining services sectors. These contracts reflect our strong ongoing relationships, and our reputation for the delivery of outcomes focused on safety, quality, technical innovation and expertise, and reliability.”

Why is the CIMC share price at a 52-week low?

CIMIC’s shares have come under pressure recently following the release of a disappointing half year result last month.

In the first half of FY 2019 CIMIC delivered a 1% increase in net profit after tax to $367 million. This was well short of the market’s expectations.

Also trading at a 52-week low on Thursday were the shares of media company Seven West Media Ltd (ASX: SWM) and airline operator Virgin Australia Holdings Ltd (ASX: VAH).

Need a lift after these declines? Then check out these growth shares that have been named as buys.

Our Top 3 Blue Chip Shares for 2019 – NOW AVAILABLE!

You’re invited! For a limited time, The Motley Fool Australia is giving away an urgent new investment report detailing our 3 TOP BLUE CHIP SHARES to own in 2019.

So if you like trustworthy, stable, high-performing companies that pay fat fully franked dividends – we’ve got you covered!

Stock #1 is a beloved old Australian company turning its attention to high-margin businesses... and rapidly returning cash to shareholders with its hefty dividend...

While Stock #2 is an online powerhouse that’s rapidly gaining market share all around the globe... poised for years (or even decades) of tremendous growth...

Even better, Stock #3 offers a whopping 6.5% grossed-up dividend! Which beats the rates on term deposits right out of the water – and offers the potential for capital gains, too.

You can discover all three shares inside our new report right now. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a LIMITED TIME ONLY!

SimplyCLICK HERE FOR YOUR FREE REPORT!

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.

CLICK HERE FOR YOUR FREE REPORT!