On 12 February 2019, CIMIC Group Limited (ASX: CIM) announced the winning of ~$90 million work package awarded to its construction company CPB Contractors that includes gas gathering and infrastructure works for Australia Pacific LNG (APLNG) in the Surat Basin, Queensland.
The contract will see CPB Contractors playing a vital role in the provision of gas infrastructure in Queensland with the delivery of more than 300 coal seam gas wells over two years. Moreover, in the past five years, the company has delivered infrastructure for over 800 wells for APLNG.
CIMIC Group Chief Executive, Officer Michael Wright stated that CIMIC Group possesses a long track record in the provision of core infrastructure services for the development of communities across Australia.
Works under the new contract will reportedly include the infrastructure services for building the networks of electric supply, lease pad at the site, tracks for access, pipeline collection networks for water.
On the business model front, the company has adopted an integrated approach where the expertise of its two or more specialist companies Thiess, CPB Contract, Sedgman and UGL are combined to deliver advanced and timely solutions. Like in Sydney Metro City and Southwest project, CIMIC integrated CPB Contractors and UGL activities whereas, for Metro Tunnel project in Victoria, it brought together UGL, CPB Contractors and EIC Activities.
The Group has recently posted its financial results for the 12-months ended 31st December 2018, reporting year-on-year growth of 9% in revenue and 11% in NPAT. The company reported Net Profit After Tax (NPAT) of $781 million in Fiscal 2018, sitting at the upper end of its profit guidance of $720 million-$780 million.
CIMIC informed that all its operating companies had reported growth in Fiscal 2018 that took the Group’s top line growth to 9%, recording $14.7 billion revenue. Also, there has been an increase in its work in hand to $36.7 billion as at the end of 2018.
The Board has declared a total final dividend of 156 cents per share, franked 100%. It reflects an increase of 16% year on year and a dividend yield of 3.6%. The Group had returned $2 billion of cash to shareholders by way of share buy-backs and dividend, from 2015 to 2018. Further, there has been 109% cash conversion of Earnings Before Interest Tax, Depreciation and Amortization (EBITDA) with cash flow from operating activities of $1.9 billion.
The company further expects its 2019 NPAT to range within $790 million and $840 million, however, subject to market conditions. Also, CIMIC anticipates minimum $130 billion worth contracts to be awarded to it in 2019 and for 2020 and beyond, it eyes $300 billion of work packages coming to the market.
In today’s trading session, CIMIC Group’s stock is trading at $48.700 (as at 2:14 PM, 13 February 2019), at a Price to Earnings ratio of 19.840 x with a market capitalization of $15.48 billion.
Over the past 12 months, CIM has witnessed a positive price trend of 5.41% including a surge of 2.73% in the past three months.
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