Broadspectrum says it is best placed to run the Nauru and Manus Island detention centres as the federal government runs a new tender process.
Broadspectrum chief financial officer Vince Nicoletti believes his company is best placed to run the Nauru and
Manus Island detention centres as the federal government runs a new tender process.
The Department of Immigration and Border Protection recently said the company was no longer the sole preferred bidder for a new, five-year contract.
Instead, the government extended Broadspectrum's current contract by 12 months to give it time to open up the tender process.
"We're quietly confident that we're best placed to secure the new, five-year contract with the DIBP when they award it later this year," Mr Nicoletti said during his interim earnings presentation.
Mr Nicoletti acknowledged that the decision does create some uncertainty, but stressed the government decided to conduct a further review due to continued changes in scope since the original tender.
"It is our view that our strong performance, our integrated end to end service offering, our welfare-led approach and collaborative focus with all stakeholders puts us in a strong position," Mr Nicoletti said Monday.
Last week's contract news triggered a sharp sell off in Broadspectrum's shares and left Ferrovial's $692 million bid for the company in the balance.
Spanish infrastructure giant Ferrovial described the change to the contract status as a "significant and negative" one that adversely impacts the value of the takeover target. Ferrovial is considering its options.
Broadspectrum profits triple
Profits have tripled for the operator of the Manus Island and Nauru detention centres as the company battles
to fend off a hostile takeover from Spain.
Broadspectrum, formerly known as Transfield Services, unveiled its stellar profit result on Monday and cheered investors with news it would buy back up to 10 per cent of its shares.
The company said the jump in net profit to $25 million for the six months to December 31 was bolstered by contracts with the defence, social services and property sectors.
Broadspectrum also benefited from the expected turnaround in its Americas business.
Chief executive Graeme Hunt said the results reflected the continued strong operational performance and improvements across the board.
"This is a very positive first half result, particularly in light of the difficult operating conditions we're experiencing in some of our sectors," he said in a statement on Monday.
Mr Hunt said given the company's strong cash generation, it would buy back up to 10 per cent of its shares on-market over the next 12 months.
The earliest the company will start its share buyback is March 8.
Broadspectrum shares soared on the back of the buyback news, with the stock up 7.5 cents, or 7.0 per cent, to $1.14.
Mr Hunt reiterated the company's rejection of Spanish infrastructure and services company Ferrovial's $692 million hostile takeover offer.
A Ferrovial spokesman Monday declined to comment on what the share buyback and earnings results means for its bid.
The takeover bid was placed in jeopardy last week after the federal government opened up the bidding for a new, five-year contract to operate the detention centres on Nauru and Manus Island.
The Department of Immigration and Border Protection has extended Broadspectrum's current contract for the centres by 12 months to give it time to open up the tender process.