Imtech wins 300 mln euro UK wastewater contract
Date: 24-Sep-04
Country: NETHERLANDS
The deal is a boost to Imtech's stated goal of becoming a top-three provider of technical services in Britain.
Imtech said in a statement that the contract to help the Welsh company meet new legal and environmental requirements would be delivered by Meica Process, a unit of technical service provider Meica Group Ltd which Imtech acquired in August 2003.
Dwr Cymru Welsh Water is responsible in Wales and some neighbouring parts of England for water supplies and wastewater treatment for 1.2 million households and 110,000 companies, Imtech said, adding the 10-year contract runs from April 2005.
"This substantial order underpins Imtech's strategy to become a top three player in the UK," Kempen & Co analyst Matthijs Storm wrote in a research note, adding he expected the deal to add about 1.5 percent to earnings per share.
But Kempen said it would not change its estimates as it had already forecast strong growth in Britain and reiterated a "neutral" rating on the stock and a price target of 22.00 euros.
At 0815 GMT, Imtech shares were up almost 2 percent at 21.61 euros after earlier touching a high of 21.70 euros, making it one of the day's strongest performers in a broadly weaker Amsterdam market. Imtech gained 3.01 percent so far this year, underperforming the Amsterdam mid-cap index by 5 percent.
Jim Steele, managing director of Meica, said the contract could lead to other deals in Britain. Meica will perform all technical modifications, upgrades and modernisations at more than 850 wastewater treatment plants.
"The contract is an important reference for several water company pre-qualification processes in the UK in which we are currently involved," he said in a statement.
Imtech chairman Rene van der Bruggen said the Welsh deal showed that buying Meica should help the company in its quest to become one of the top three providers of technical services in Britain and should also help the company elsewhere in Europe.
"The European market for drinking water and wastewater is undergoing substantial changes and there are good opportunities for Imtech," he said.
