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Jacobs Gets Water Resilience Contract From Anglian Water

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Jacobs Engineering Group Inc. (J - Free Report) has been appointed by Anglian Water Services to deliver water resilience for the East of England.

Anglian Water Services' new Strategic Pipelines Alliance (SPA) will deliver connective infrastructure across the East of England to make sure more than 600,000 customers get resilient and safe water supply for years.

Jacobs, along with Anglian Water and alliance partners including Farrans, Mott MacDonald Bentley and Costain, will integrate their expertise and deliver the Water Resources Management Plan to provide safe and clean water for generations to come. Technologies like digital twins or replicas of actual systems, processes and assets will be used for synthetic data generation, prediction, optimization as well as scenario analysis to drive greater efficiency and reliability.

Anglian Water is investing nearly $458 million over the next five years to tackle the shortage of reliable water supply caused by climate change and an increasing population. Notably, its investment through the SPA will help the East of England to attain prosperous growth and development in the future.
Exceptional Project Execution Strategy to Support Growth

Jacobs’ P&PS business — which accounted for almost 65% of total revenues — serves clients of broad sectors like water, transportation, building and semiconductors.

Recently, the segment received a contract to support the Metropolitan Atlanta Rapid Transit Authority’s (MARTA) expansion project. As part of the $3-billion expansion program, MARTA entitled the Jacobs/Russell JV team to serve as a CPMO Supplemental Services Consultant and manage $700 million in construction spending in the first five years of the Authority's "More MARTA Atlanta" expansion project.

Again on May 28, it secured a four-year, $10-million National Flood Risk Assessment 2 contract from the Environment Agency of England. Jacobs — together with JBA Consulting, and a few industry and academic experts — will integrate their expertise to design and develop a pioneering cloud computing system.

Efficient project execution has been primarily driving Jacobs’ performance over the last few quarters. The company’s ongoing contract wins are a testimony to the fact. Backlog at the end of second-quarter fiscal 2020 grew 12.5% from the year-ago period.

Long-Term Prospects are Encouraging

Jacobs’ shares have outperformed the industry so far this year. The outperformance is likely to continue in the near term, buoyed by strong backlog, inorganic moves, its transformed portfolio, and increased focus on infrastructure, aerospace, cybersecurity and technical building projects.

Although the current market scenario remains unpredictable owing to the COVID-19 pandemic, its long-term outlook for the business remains intact. It projects 3-5% net organic revenue growth through 2021. The top-line growth is expected to be driven by recurring revenues that roughly occupy two-thirds of Jacobs’ total revenues. This will enable the company to reduce overall risks of market volatility. Also, it aims a 125-175 basis-point expansion of adjusted operating margins in the long run. The margin expansion is expected to be driven by a combination of higher-margin backlog, and focus on generating efficiencies through digital and technological solutions.

Zacks Rank

Jacobs — which shares space with AECOM (ACM - Free Report) , KBR, Inc. (KBR - Free Report) and Fluor Corporation (FLR - Free Report) in the same industry — currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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