Shares of Serco Group (LO: SRP) are trading higher on Wednesday after the company was awarded a contract to provide support services at the Five Wing Canadian Forces Base in Goose Bay, Canada.
Serco’s share price is currently priced at 140p, up 1.89% on the day.
The British company said the initial 10 year period of the contract, which begins in September 2021, has an estimated ceiling value of C$694 million or approximately £400m with annual revenue of £20m-£30m in the opening years.
The contract has provision for two further 5-year extensions with a potential ceiling value to Serco over the entire 20 years, including indexation, of approximately C$1.5bn or £870m.
The FTSE 250 firm will continue to perform most non-military operation and maintenance functions at the base, located in Central Labrador.
Serco, one of the area's largest private-sector employers, has been providing services to the Canadian Department of National Defense at 5 Wing Goose Bay since 1998.
“Goose Bay has been operated successfully by Serco for more than 20 years and we are delighted to have been selected to continue to support the Canadian Department of National Defence on what is a vital piece of national infrastructure,” stated Rupert Soames, Serco Group CEO.
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