At the time of writing, shares of Weststar Industrial Ltd [ASX:WSI] are up by 53.85%, to two cents per share.
Why did Weststar Industrial Ltd shares do this?
The company announced that its engineering contractor business, SIMPEC, was awarded its largest contract to date. The contract is worth roughly $8 million, from MSP Engineering at the Tianqi Lithium Kwinana process plant in Kwinana, Western Australia.
It was a big win for a $5.95 million company.
What now for Weststar Industrial Ltd?
Weststar Industrial has been relatively flat all year, trading like a typical penny stock. That said, as tends to happen with these type of stocks, good news can put a rocket under the share price in a short amount of time. That’s exactly what happened today. The contract win was a much needed sigh of relief for shareholders who have been struggling long-term.
Of course, the share price move doesn’t look like much on the above chart. But it doesn’t matter…
Weststar Industrial has already won work at the lithium project in the past. The latest award suggests the company was doing a good job. This could be the start of a growth phase for the company. Weststar Industrial director Bert Mondello told shareholders today:
‘With this award, SIMPEC has further demonstrated its immense value to the group ― with all divisions now winning significant pieces of work and growing exponentially. This award will no doubt place SIMPEC in a strong position to win further work and larger contracts.
‘With a strong pipeline and increased tendering activity, we are confident that further awards will result early next year. The group order book is now at $25M only half way through the year with much of this total falling within FY19, against full year revenue of $9M for WestStar last year.’
If the company keeps bagging lucrative contracts, the share price could continue this turnaround, and rise quickly.
Resources Analyst, Markets & Money
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