The Johns Lyng Group Ltd (ASX: JLG) share price is in focus after winning its first major contract in New Zealand.
Johns Lyng says it’s an “integrated building services group delivering building and restoration services across Australia and the US. JLG’s core business is built on its ability to rebuild and restore a variety of properties and contents after damage by insured events including impact, weather and fire events.”
New Zealand win
Johns Lyng reported it has made an agreement to provide building repair services to Tower Ltd (ASX: TWR), a New Zealand insurer. I think this is a positive for Johns Lyng shares.
This new contract is the first agreement signed by Johns Lyng with a major national insurer in New Zealand.
Johns Lyng recently opened its Auckland head office which allowed the company to help communities affected by Cyclone Gabrielle, which impacted wide areas of the North Zealand’s North Island, resulting in severe flooding.
The ASX share said the initial emergency response has now evolved into a “significant rebuild effort which will continue well into 2024.”
The company acquired an 80% equity interest in Christchurch-based Mainland Building Services, extending its footprint in the South Island.
Johns Lyng now has a global footprint of 109 locations in Australia, with two locations in New Zealand and 51 locations in the USA.
Mangement commentary
The Johns Lyng CEO Nick Carnell said:
Tower has a laser focus on the customer and ultimately delivering a positive experience. That is something we absolutely identify with.
We are delighted to work with one of New Zealand’s premier insurance brands and this is a further demonstration that our business model can be implemented seamlessly across the Tasman and beyond.”
Final thoughts on the Johns Lyng share price
The business is showing it can do well in New Zealand, just like it’s doing in Australia and the US. The prospect of possible expansion beyond the three countries it’s currently in is appealing. It may be able to do really well over the long-term.
It has numerous growth avenues for building repairs and restoration, the catastrophe work in Australia and the US, and the expansion in strata services and essential home services.
