AECOM joint venture secures position on two new £1.25 billion SCAPE Utilities Consultancy Frameworks in the UK

Rhea-AI Summary

AECOM's joint venture, Perfect Circle, has been appointed to two new consultancy frameworks by SCAPE, the UK's leading public sector procurement authority. The frameworks, valued at up to £1.25 billion, will deliver professional services across the utilities sector in the UK. The appointment includes a £750 million direct award framework for England, Wales, and Northern Ireland, and a £500 million dedicated framework for Scotland. The frameworks will last four years, with an option to extend for two additional years. Services will cover a range of utility sectors such as water, renewables, energy, rail, aviation, ports, and telecommunications. This initiative aims to support the UK's grid and utilities infrastructure modernization objectives and facilitate the energy transition.

Positive

• AECOM's Perfect Circle JV secures £1.25 billion consultancy frameworks, boosting revenue potential.
• Four-year frameworks with a two-year extension option ensure long-term engagement and financial stability.
• Involvement in utilities sectors like water, renewables, and energy enhances AECOM's role in the UK's energy transition.
• Collaborative history with the UK public sector strengthens joint venture's credibility and performance.
• Strategic focus on grid modernization and sustainability aligns with market trends and public sector goals.

Negative

• Dependence on UK public sector projects may expose AECOM to political and economic uncertainties.
• Potential future extensions are not guaranteed, which could impact long-term revenue projections.
• Market competition in the utilities consultancy sector may pressure profit margins.

Financial Analyst

This is a substantial opportunity for AECOM, reflecting a significant revenue stream from the combined £1.25 billion frameworks. The company's joint venture, Perfect Circle, will engage in multiple sectors, which diversifies risk and enhances potential revenue stability. This news is indicative of AECOM's robust market positioning and its ability to secure large-scale contracts, which will likely positively impact the company's financials.

In the short term, investors may witness an uptick in AECOM's stock price as the market reacts to this positive development. In the long term, the frameworks will contribute to steady revenue, improve cash flow and potentially enhance shareholder value.

However, investors should be aware of execution risks, given the complexity of large-scale projects and the extended timeline (up to six years). AECOM's ability to deliver on these frameworks efficiently will be critical to realizing the projected revenue and maintaining margins.

Energy Expert

The emphasis on utilities, particularly water and energy, underscores the strategic importance of these frameworks in advancing the UK's energy transition and infrastructure modernization. AECOM's role in delivering services across sectors such as water and renewables aligns with global trends towards sustainability and resilience.

For investors, it's important to recognize how AECOM's involvement in these critical sectors positions the company as a key player in the UK's push towards a sustainable future. This commitment to infrastructure resilience could translate to long-term growth, tapping into the increasing public and private sector investments in sustainable projects.

Market Research Analyst

The association with SCAPE, a leading public sector procurement authority, is a testament to AECOM's credibility and expertise. This relationship enhances AECOM's market reputation and could open doors to future contracts. Additionally, the broad scope of services offered under these frameworks—including engineering, project management and strategic advice—positions the joint venture to capture a wide range of consultancy needs, reinforcing market presence.

From an investor perspective, this broad service offering can drive revenue diversification, mitigate sector-specific risks and capitalize on multi-sector opportunities, which is beneficial for a balanced growth trajectory.

DALLAS--(BUSINESS WIRE)-- AECOM (NYSE: ACM), the world’s trusted infrastructure consulting firm, today announced that its Perfect Circle joint venture with Pick Everard and Gleeds has been appointed to two new consultancy frameworks for SCAPE, the United Kingdom’s leading public sector procurement authority. The frameworks, with a combined value of up to £1.25 billion, will see the joint venture deliver professional services for the utilities sector across the UK.

“We’re proud to continue our collaboration with SCAPE alongside our Perfect Circle partners, and look forward to applying our multidisciplinary capabilities and track record on key utilities to benefit communities across the UK,” said Frank Sweet, chief executive of AECOM’s Environment business. “These new frameworks extend our role as a key enabler of the UK’s water sector growth and ongoing energy transition, allowing our teams to build resilience across the utilities infrastructure pivotal to a sustainable future.”

Perfect Circle has been appointed to SCAPE’s £750 million direct award framework for England, Wales and Northern Ireland and its £500 million dedicated framework for Scotland. The frameworks will run for a period of four years, with an option to extend for a further two years. Both frameworks are intended to deliver solutions and services across a range of utility sectors, including water, renewables, energy, rail and metro, aviation, ports and harbors, and telecommunications.

Clients, which include utility sector organizations across the UK, will have access to the joint venture’s suite of professional services, including strategic advice, engineering services, design services, project management and quantity surveying.

“With these new frameworks, our teams continue to expand their role in delivering the UK’s ambitious grid and utilities infrastructure modernization objectives,” said Colin Wood, chief executive of AECOM’s Europe and India region. “Our regional experts have a long history of collaboration with the UK public sector, and their ever-evolving skillset across the key pillars of the energy transition is deepening those partnerships.”

“Our Perfect Circle partnership has consistently delivered value to public sector organizations across the United Kingdom for more than six years,” said Richard Whitehead, chief executive of AECOM’s global Buildings + Places business. “Our Buildings + Places teams will build upon this success by leveraging the experience of our partners and AECOM’s integrated, cross-business line expertise in renewables, grid modernization and other critical framework services.”

About AECOM

AECOM (NYSE: ACM) is the world’s trusted infrastructure consulting firm, delivering professional services throughout the project lifecycle – from advisory, planning, design and engineering to program and construction management. On projects spanning transportation, buildings, water, new energy, and the environment, our public- and private-sector clients trust us to solve their most complex challenges. Our teams are driven by a common purpose to deliver a better world through our unrivaled technical and digital expertise, a culture of equity, diversity and inclusion, and a commitment to environmental, social and governance priorities. AECOM is a Fortune 500 firm and its Professional Services business had revenue of $14.4 billion in fiscal year 2023. See how we are delivering sustainable legacies for generations to come at aecom.com and @AECOM.

Forward-Looking Statements

All statements in this communication other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including any statements of the plans, strategies and objectives for future operations, profitability, strategic value creation, risk profile and investment strategies, and any statements regarding future economic conditions or performance, and the expected financial and operational results of AECOM. Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward-looking statements include, but are not limited to, the following: our business is cyclical and vulnerable to economic downturns and client spending reductions; potential government shutdowns or other funding circumstances that may cause governmental agencies to modify, curtail or terminate our contracts; losses under fixed-price contracts; limited control over operations that run through our joint venture entities; liability for misconduct by our employees or consultants; failure to comply with laws or regulations applicable to our business; maintaining adequate surety and financial capacity; potential high leverage and inability to service our debt and guarantees; ability to continue payment of dividends; exposure to political and economic risks in different countries, including tariffs, geopolitical events, and conflicts; currency exchange rate and interest fluctuations; retaining and recruiting key technical and management personnel; legal claims; inadequate insurance coverage; environmental law compliance and adequate nuclear indemnification; unexpected adjustments and cancellations related to our backlog; partners and third parties who may fail to satisfy their legal obligations; managing pension costs; AECOM Capital real estate development projects; cybersecurity issues, IT outages and data privacy; risks associated with the benefits and costs of the sale of our Management Services and self-perform at-risk civil infrastructure, power construction and oil and gas businesses, including the risk that any purchase adjustments from those transactions could be unfavorable and result in any future proceeds owed to us as part of the transactions could be lower than we expect; as well as other additional risks and factors that could cause actual results to differ materially from our forward-looking statements set forth in our reports filed with the Securities and Exchange Commission. Any forward-looking statements are made as of the date hereof. We do not intend, and undertake no obligation, to update any forward-looking statement.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240523306900/en/

Media Contact:

Brendan Ranson-Walsh

Senior Vice President, Global Communications

1.213.996.2367

Brendan.Ranson-Walsh@aecom.com



Investor Contact:

Will Gabrielski

Senior Vice President, Finance, Treasurer

1.213.593.8208

William.Gabrielski@aecom.com

Source: AECOM

FAQ

What is the value of AECOM's new consultancy frameworks?

The combined value is up to £1.25 billion.

Which regions are covered by the new AECOM frameworks?

The £750 million framework covers England, Wales, and Northern Ireland, while the £500 million framework is for Scotland.

How long are the new AECOM frameworks intended to last?

The frameworks will run for four years, with an option to extend for an additional two years.

What types of services will AECOM provide under the new frameworks?

Services include strategic advice, engineering, design, project management, and quantity surveying.

Which utility sectors will AECOM's frameworks cover?

The frameworks cover water, renewables, energy, rail, aviation, ports, harbors, and telecommunications.

How will AECOM contribute to the UK's energy transition?

AECOM will apply its multidisciplinary capabilities to build resilience across utilities infrastructure, supporting the UK's grid and energy modernization goals.