SeaLink Travel Group’s $700 million takeover target, Transit Systems, has renewed two transport contracts in Western Australia worth around $57 million per year, as well as securing a new contract.
SeaLink Travel Group’s $700 million takeover target, Transit Systems, has renewed two transport contracts in Perth as well as securing a new contract, with all three worth about $144 million per year.
SeaLink today told the ASX that Transit’s contracts to operate the Claremont and Marmion bus services, which were set to expire at the end of the year, were renewed by the state government.
The contracts will commence in January 2020 and last for 10 years.
In addition, it has won a new 10-year contract to operate bus servcies in Joondalup.
The three contracts were valued at $1.44 billion over 10 years, according to details lodged by the Public Transport Authority on the tenders.wa.gov.au web site.
Transit has previously disclosed that for the 2019 fiscal year, the Claremont contract comprised 2 per cent of its $895 million revenue and the Marmion one represented 4.4 per cent.
This equates to $17.9 million and $39.4 million, respectively, and suggests the Joondalup contract is worth about $87 million per year.
The company previously said it was well placed to renew the Marmion and Claremont contracts because of its long-term relationships.
Transit stated it also has a good chance of renewing its Canning and Southern River contracts, which are due to expire in April 2020.
It has held the Marmion contract for eight years and the Claremont contract for 17 years.
Prior to the latest wins, Transit generated $134 million in annual revenue from its WA bus services, which equated to 15 per cent of its total revenue.
In other news, Queensland-based Australian Transit Enterprises has been awarded a $26.8 million 10-year contract to operate bus services in Geraldton.