Yahoo Finance AECOM (ACM) Secures Major Southern Water AMP8 Service Contracts
AECOM ACM, a leading infrastructure consulting firm, has been awarded key contracts by Southern Water, a major UK water utility, to support its most ambitious business plan so far. The contracts span two significant lots under the Professional Services Framework, preparing for the UK's Asset Management Plan Period 8 (AMP8) from 2025 to 2030.
Under Lot 1, AECOM will provide comprehensive asset management and advisory services, teaming up with sub-consultant partners Arcadis and AliumBlue. This collaboration will enhance Southern Water's strategy and planning capabilities, improve asset information management through advanced data visualization and digital tools, and bolster asset intelligence with sophisticated modeling and geospatial analysis. These efforts aim to optimize efficiency and mitigate supply chain risks while ensuring water resilience and effective wastewater treatment.
In Lot 2, AECOM will deliver the Program Management Office program and project management services. Additionally, AECOM will provide crucial technology insights to drive operational capability and efficiency, further strengthening Southern Water’s ability to deliver superior customer service and environmental protection.
Southern Water, a significant player in the South East England water supply, manages the delivery of 535 million liters of drinking water daily and treats 1,371 million liters of wastewater at 368 treatment works. AECOM’s involvement is pivotal in helping Southern Water achieve its AMP8 goals, focusing on environmental enhancement and improved service delivery.
This partnership with Southern Water underscores AECOM’s extensive expertise in the UK water sector, reinforcing its reputation for delivering critical infrastructure projects that align with regulatory requirements and sustainability objectives. AECOM’s engagement in the AMP8 initiatives reflects its commitment to advancing water infrastructure resilience and environmental stewardship in the UK.
Through these strategic contracts, AECOM is set to play a crucial role in shaping a more sustainable and efficient future for Southern Water and its customers, aligning with broader industry and regulatory goals for the upcoming decade.
Contract Wins & Solid Backlog Level: A Boon
Owing to the improving global scenario, which is fostering infrastructural demand around the globe, there has been an increase in demand for ACM’s services. This improving trend is reflected in the company’s backlog levels.
As of the fiscal second-quarter end, the total backlog was $23.74 billion compared with $22.98 billion reported in the prior-year period. The current backlog level includes 54.8% contracted backlog growth. The design business backlog grew 6.3% to $22.29 billion. The metric was driven by a near-record win rate and continued strong end-market trends.
The company’s net service revenues or NSR — defined as revenues excluding subcontractor and other direct costs — have been benefiting from strength across core transportation, water and environment markets. NSR for the fiscal second quarter rose 8% year over year, marking the 13th consecutive quarter of accelerating organic growth.
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Shares of AECOM have gained 2% in the past year compared with the Zacks Engineering - R and D Services industry’s growth of 40.6%. Although shares of the company have underperformed the industry in the past year, the ongoing contract wins are likely to boost its prospects in the forthcoming quarters. Also, increasing infrastructural spending trends across the world are encouraging for ACM.
Zacks Rank & Key Picks
ACM currently carries a Zacks Rank #3 (Hold).
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The Zacks Consensus Estimate for MPTI’s 2024 sales and EPS indicates a rise of 8.8% and 58.6%, respectively, from prior-year levels.
Gates Industrial Corporation plc GTES presently carries a Zacks Rank #2. GTES has a trailing four-quarter earnings surprise of 14.9%, on average. Shares of GTES have gained 28.2% in the past year.
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AECOM (ACM) : Free Stock Analysis Report
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