Citadel Group Ltd (ASX: CGL) shares could be worth buying today after the technology firm announced more contract wins this morning.
Citadel Group describes itself as a leading software and services company that specialises in secure information management in complex environments. Formed in 2007, its name comes from the idea of being a medieval fortress to defend against invaders. Its software helps client management make real-time decisions in health, national security, defence, education and other industries. It now has more than 200 employees and offices in most of Australia’s capital cities.
Citadel’s News
Citadel announced it has won a $33 million contract over 10 years for technology services to the new Royal Adelaide Hospital. After the design and installation of collaboration technology, Citadel is now working with Spotless Group to provide support, maintenance and technology refresh services to the hospital.
Citadel CEO Darren Stanley said: “Building on this recent momentum and our strong working relationship, we are progressing discussions with the Spotless Group about expanding our relationship into their other Public Private Partnership programs around Australia.”
The technology business also announced that the University of Melbourne, a G8 University, has chosen Citadel to install 13 Proof of Concept facilities for extensive end-user testing. The university is looking to enter into a five-year managed services contract following the completion of the facilities.
Mr Stanley commented, “Our reputation in the tertiary sector continues to grow, with six leading universities now utilising our technology services.”
Citadel also announced that its oncology information management platform, CHARM, recently went live at the John Hunter Children’s Hospital. Citadel described this as important because it shows CHARM’s ability to manage the complexities of paediatric chemotherapy prescribing and administration.
Is Citadel a buy?
I believe that Citadel is a more attractive value ASX tech proposition than some of the other ideas such as WiseTech Global Ltd (ASX: WTC) or Afterpay Touch Group Ltd (ASX: APT). According to CommSec estimates, Citadel is valued at 24 times FY19 estimated earnings.
Citadel has a number of different growth avenues, particularly into other industries. I also like that its revenue is contracted, so it shouldn’t suffer too much of an earnings hit in a recession. It also has plans to expand overseas which would open a large growth corridor for the company. Plus, it’s rewarding shareholders along the way with a growing dividend.
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