The Decmil Group Limited (ASX: DCG) share price
is up 5% this morning after announcing it has been awarded a significant infrastructure project as part of a joint venture with McConnell Dowell.
About Decmil Group
Decmil offers a diversified range of services to the Australian resources and infrastructure industries. It specialises in design, civil engineering and construction; accommodation services; mechanical fabrication and maintenance.
The Announcement
Decmil, along with its joint venture partner McConnell Dowell, has been awarded a project to perform works on the Mordialloc Freeway, located in the south-east of Melbourne. The project is valued at $417 million and work will commence immediately.
The project will link the Mornington Peninsular Freeway to the Dingley Bypass and create one continuous freeway from Frankston to Clayton, measuring approximately 25km in length.
Decmil has a 40% share in the project, which is not insignificant for a relatively small company that is valued at a tick over $200 million based on the current share price.
At market open this morning, the Decmil share price went immediately higher and is up more than 5% at time of writing.
Is Decmil Worth A Further Look?
The company posted a pretty solid FY19 result in late August, recording record construction and engineering revenue and Group EBITDA of a respectable $24 million.
Decmil’s balance sheet is squeaky clean with $84 million of net cash as of June 30, and it was able to comfortably pay shareholders a final dividend of 2 cents per share.
The company said it expects to generate approximately $700 million in revenue in FY20, which would represent about 6% growth on last year’s record result.
With both Federal and State governments looking to place extra emphasis on infrastructure projects in the coming years, it might be a good idea to add Decmil to the watchlist.
For other companies to consider watching, grab a copy of the free report below.
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At the time of publishing, Luke has no financial interest in any companies mentioned.
