United Group (UGL) Update

Submitted by Jim Thesiger on 27 May, 2008 - 12:46

United Group (UGL) retained a neutral rating from Australian stock analyst Macquarie Research Equities.

United Group (UGL) Wins $270m of New Contracts

$100m Contract with Melbourne Water:

UGL Infrastructure and partners have signed a 5 year, $260m (UGL share $100m) contract with Melbourne Water for the upgrade of MW's Eastern and Western sewerage treatment plants and associated pump stations.

$170m Resources Work:

The group has extended a number of contracts with a total value of $170m. These include site services at BP's Kwinana refinery in WA, a major maintenance contract in Gladstone and a three year extension of the SCF maintenance contract at Phosphate Hill and Mt Isa.

Tendering Demand Strong:

The company noted that it was tendering on projects with a total value of $5b. We suspect that most of these are in the $50-250m range, an area where the group has historically been quite successful.

Valuation

There are no changes to our valuation or DCF-based share price target. We retain a Neutral rating.