Why the Cimic (ASX:CIM) share price is in positive territory today

The engineering company’s investment partnership is paying off.

| More on:
smiling engineer/ project manager in hard hat on site

Image source: Getty Images

The Cimic Group Ltd (ASX: CIM) share price is climbing during late morning trade.

This follows the engineering company’s announcement that its 50%-owned subsidiary Ventia has been awarded a government contract.

At the time of writing, Cimic shares are fetching $19.88, up 0.51%.

Details of the contract

In today’s statement, Cimic advised that the South Australian government has selected Ventia for a facilities management contract.

The Across Government Facilities Management Arrangement (AGFMA) is focused on the maintenance, management and improvement of government-owned facilities. This includes building assets that underpin essential community services such as schools, hospitals, and police stations.

Ventia is expecting to receive roughly $300 million annual revenue from the deal. The AGFMA will run over an initial period of 5 years and 7 months, with potentially three 2-year extensions.

Transition activities for the contract are scheduled to begin in July with operations commencing in December this year.

Ventia group CEO Dean Banks touched on the award, saying:

South Australians rely on the essential services delivered at more than 3,500 Government locations across the state and Ventia is pleased to support the government of South Australia with the delivery of facility management services to the community, 7 days a week, 365 days a year.

Ventia’s group executive of defence and social infrastructure Derek Osborn added:

Ventia is looking forward to partnering with local small to medium businesses to help us deliver these services, keeping investment and employment in South Australia.

Ventia is also passionate about providing apprenticeships in various trades, as well as ensuring our employment opportunities focus on delivering a diverse and inclusive workforce.

More on Ventia and the Cimic share price

Ventia is a 50/50 investment partnership between Cimic and funds managed by affiliates of Apollo Global Management.

Ventia is a leading essential and infrastructure services provider in Australia and New Zealand, operating across 400 locations.

The subsidiary operates in a variety of sectors including transport, telecommunications, utilities, defence, water, energy, resources, and social infrastructure.

The Cimic share price has lost more than 15% over the last 12 months and is down 18% in 2021.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

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. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

ANZ Bank share price 2021 man attempting to pull tired woman over finish line in running race
Bank Shares

The ANZ share price is ‘trading at its largest discount to its peers in 15 years’: Is this justified?

ANZ finds itself in a similar position to NAB three years ago before Ross McEwen took the reins.

Read more »

ASX bank shares buy A young boy in a business suit giving thumbs up with piggy banks and coin piles
Share Market News

Could now be a great time to start investing in ASX shares?

Is it a good time to start investing in ASX shares? There has been a lot of volatility in 2022.

Read more »

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Share Market News

ASX 200 midday update: Appen crashes, lithum shares jump

The ASX 200 is ending the week strongly...

Read more »

An ASX200 market analyst holds his hand to his chin and looks closely at his computer screens watching share price movements
Share Market News

‘We’re close to the bottom’: Expert flags share market sectors to buy before the rally

It's been a rough year for investors. Luckily, this expert believes global markets are about to rally.

Read more »

Smiling man with phone in wheelchair watching stocks and trends on computer
Share Market News

5 things to watch on the ASX 200 on Friday

The ASX 200 looks set to end the week on a high...

Read more »

Computer key - Top 10 ASX today
Share Market News

Here are the top 10 ASX shares today

Here are your top 10 biggest gainers in the ASX 200 on Thursday.

Read more »

A woman with a loudhailer turns up the volume on her office co-workers
Share Market News

Here are the 3 most traded ASX 200 shares on Thursday

We take a look at the most traded ASX 200 shares by volume today.

Read more »

Woman looks puzzled as she types on laptop and uses phone.
Share Market News

What’s going on with the Australian Vanadium share price today?

Investors may be wary about unspecified additional share dilution from the open-ended share purchase plan.

Read more »