WestStar Industrial Limited (ASX: WSI) has welcomed new contract awards of ~$11.5M in total for its wholly owned subsidiary SIMPEC.
These awards further bolster WestStar’s FY23 order book and brings total consolidated Group contracted revenue to ~$132M at the halfway point of FY23
Included in the above amount is a ~$2.5M award with Systems Connect for the Sydney Metro City & Southwest Line-wide Works project. SIMPEC will supply electrical and mechanical support services for the development of the new Sydney infrastructure project. SIMPEC has currently mobilised on the project with initial scope expected to be completed in FY23. The Company expects tendering activities and awards to increase significantly in FY23 within Sydney and broader New South Wales.
Systems Connect, an unincorporated joint venture between two CIMIC Group companies, CPB Contractors and UGL Limited, is delivering the line-wide work including installing metro rail track, power systems, communications, and infrastructure to turn the excavated tunnels into a working railway between Chatswood and Sydenham. Line-wide work also includes delivering the permanent systems, services and buildings required for Sydney Metro operations between Chatswood and Bankstown. SIMPEC will supply vertical construction support services for the works.
This is our second major project in NSW having previously completed the WestConnex New M5 Project. This contract will strengthen our position in the infrastructure market and allow us to further develop in the state of NSW,” SIMPEC Managing Director Mark Dimasi said.
“We look forward to further developing our relationship with the Systems Connect Joint Venture and thank them for the opportunity to deliver such a high-profile infrastructure project.”
“Thank you to the team for their dedication and efforts in securing this contract.”
SIMPEC has also been awarded an increase in scope of ~$2.5M as part of the limited notice to proceed for work with Cockburn Cement for the major Kwinana Plant Upgrade project. Initial award of the limited notice to proceed was announced on 23 August 2022 and the additional scope has now increased the value to ~$4M in total. This is SIMPEC’s third major project in the Kwinana industrial zone, with successful delivery of projects at the Tianqi Lithium hydroxide facility and Acciona Kwinana Waste to Energy Plant.
Construction began at Cockburn Cement in August 2022 and will be completed in FY23. Contract terms are in the latter stages of being negotiated with Cockburn Cement for the balance of construction and installation works on the project.
In addition to the above, SIMPEC has also secured a labour hire agreement of ~$6.5M at the Kwinana Waste to Energy project and are expected to deploy circa 100 personnel on the project. SIMPEC continue to deliver on a complex engineering project for the client outside initial scope. Work has commenced and is expected to be completed during FY23.
Outlook
WestStar Industrial’s low-risk contract model and multi-disciplinary market offering has enabled it to capitalise strong working relationships with repeat clients. With a growing reputation for successful sophisticated engineering solutions, delivery of a number of flagship projects (Iron Bridge Wet Plant, Talison Greenbushes, Tianqi, FQM, Lynas) is contributing to an unprecedented acceleration of nationwide tendering activities.
FY23 contracted revenue already stands at ~$132m the largest in the Group’s history and the Company expects to finalise significant new contract scopes, variations and extensions to existing contracts in the current 1H FY23.
