CGI wins $162 million UK Cabinet Office digital contract

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CGI wins $162 million UK Cabinet Office digital contract

LONDON - CGI Inc. (TSX: GIB.A) (NYSE: GIB), a global IT and business consulting services firm, has been chosen by the UK Government's Cabinet Office to be its Strategic Delivery Partner for digital transformation initiatives. The Cabinet Office Digital (CO Digital) department awarded CGI a five-year contract valued at approximately $162 million.

The partnership will see CGI working alongside CO Digital to offer a variety of digital, data, and technology services, aimed at supporting the digital transformation of the Cabinet Office's Business Units. This collaboration is expected to enhance delivery, innovation, and value creation within the Cabinet Office, facilitating its evolution into a more digitally enabled entity.

Michael Hill, the Chief Digital Information Officer for the Cabinet Office, expressed enthusiasm for the new partnership with CGI, anticipating that it will bolster the Cabinet Office's delivery capabilities and innovation efforts. Tara McGeehan, President of CGI in the UK & Australia, echoed this sentiment, highlighting CGI's proven track record with the UK Government and its contributions to critical national infrastructure.

The contract outlines CGI's role in accessing an ecosystem of partners, including small and medium-sized enterprises, to provide specialized services. Moreover, the contract stipulates CGI's commitment to delivering social value through initiatives such as digital skills training for armed forces veterans and hosting events for women in technology.

CGI, established in 1976, stands as one of the leading independent IT and business consulting services firms globally. The company boasts a workforce of over 90,500 consultants and professionals, offering a comprehensive range of services from strategic IT and business consulting to systems integration and managed services. For the fiscal year 2023, CGI reported revenues of CA$14.30 billion.

This strategic partnership is based on a press release statement.

InvestingPro Insights

CGI Inc. (NYSE: GIB), as a prominent player in the IT Services industry, has shown a strong financial performance with a market capitalization of $25.16 billion and a healthy P/E ratio of 21.23, which further adjusts to 20.02 when considering the last twelve months as of Q1 2024. This reflects investor confidence in CGI's ability to maintain profitability, which is corroborated by analysts' predictions that the company will be profitable this year. The company's revenue growth of 9.26% over the last twelve months as of Q1 2024, coupled with a gross profit margin of 30.54%, demonstrates CGI's capability to generate significant income relative to its revenue.

Investors may also find CGI's stock appealing due to its low price volatility, making it a potentially stable addition to a diversified portfolio. An InvestingPro Tip highlights CGI's ability to manage its debt effectively, operating with a moderate level of debt, and its cash flows are robust enough to cover interest payments comfortably. This financial stability is essential for investors seeking a reliable investment in the IT services sector.

While CGI does not pay dividends to shareholders, its high return over the last decade suggests that the company has been successful in delivering value through stock price appreciation. For those interested in deeper analysis and more tips, InvestingPro offers additional insights, including a total of 9 InvestingPro Tips for CGI, which can be accessed with a subscription. Readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

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