Why the Service Stream share price jumped 9% higher today

The Service Stream Limited (ASX:SSM) share price is jumping higher on Thursday. Here's why it is up 9% this morning…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Service Stream Limited (ASX: SSM) share price has been a strong performer on Thursday.

At the time of writing the essential network services provider's shares are up 9% to $2.66.

Why is the Service Stream share price storming higher?

Investors have been buying Service Stream's shares after it revealed the award of a major new contract.

According to the release, a consortium that Service Stream is part of has won a ten-year contract with Sydney Water Corporation.

The consortium, which will now take the form of an unincorporated joint venture, comprises its Comdain Infrastructure business, engineering company John Holland, Lendlease Group (ASX: LLC), and WSP Australia.

What is the contract?

Sydney Water has appointed the consortium as the Regional Delivery Contractor for one of its three network regions under its new Partnering for Success contracting program.

Under this program, it will provide Sydney Water with a "TOTEX" asset management service covering the design, construction, maintenance, and facility management of all treatment and network assets in its Southern Region.

The contract commences with a six-month mobilisation period starting in January 2020. This will be followed by two five-year service delivery terms with a performance review at the end of the first five years.

Based on forecasts provided by Sydney Water, management estimates that the revenue from service delivery is expected to be in the order of $200 million per annum for the consortium.

As its Comdain Infrastructure business has a 30% share in the joint venture, this equates to annual revenue of $60 million for Service Stream.

Service Stream Managing Director, Leigh Mackender, believes the appointment "reflects the strong capability and prior track record that each of the senior joint venture partners has in delivering positive outcomes for Sydney Water and its customers over the years."

"The Board and I are delighted that the capability and performance of our recently acquired Comdain Infrastructure business has been recognised by Sydney Water with this significant contract award. We look forward to working with Sydney Water, in concert with our D4C colleagues, in building what we expect will be a mutually rewarding relationship for many years to come," he concluded.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Service Stream Limited. 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.

More on Share Gainers

A neon sign says 'Top Ten'.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a Garfield kind of Monday for investors.

Read more »

Happy shareholders clap and smile as they listen to a company earnings report.
Share Gainers

Why Artrya, Clinuvel, Imugene, and Pilbara Minerals shares are storming higher today

These shares are starting the week in a positive fashion. But why?

Read more »

An old-fashioned panel of judges each holding a card with the number 10
Share Gainers

Here are the top 10 ASX 200 shares today

It was a happy end to the trading week this Friday.

Read more »

Excited couple celebrating success while looking at smartphone.
Healthcare Shares

Up 680% since July, here's why 2025 was a breakout year for this hot ASX stock

With consistent contract wins, FDA clearance, and backing from Pro Medicus, 4D Medical is showing that there is a commercial…

Read more »

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Share Gainers

4 ASX 200 stocks smashing the benchmark this week

Investors have been piling into these four ASX 200 stocks this week. Let’s see why.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why Bendigo Bank, NextDC, Nuix, and Vulcan Energy shares are rising today

These shares are ending the week on a high. But why?

Read more »

Girl with painted hands.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a happy Thursday for ASX investors.

Read more »

Excited couple celebrating success while looking at smartphone.
Share Gainers

Why BHP, DroneShield, Lotus Resources, and Nuix shares are pushing higher today

These shares are having a better day than most on Thursday. But why?

Read more »