Newspaper article The Journal (Newcastle, England)

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Newspaper article The Journal (Newcastle, England)

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Article excerpt

Sunday Telegraph May Gurney, which maintains roads and street lighting, cleans parks and manages recycling programmes, generates more than 95% of its business from long-term contracts, giving it good earnings visibility. It also has a healthy order book, with pounds 1.25bn worth of contracts in the bag.

Contracts tend to last up to six years and they are increasing in length. This creates a virtuous circle as May Gurney is in a position to invest in technology and other equipment in order to reduce costs for its clients. Happy clients then feasibly become clients for life.

The company is also increasingly selling additional services to existing clients. In the past, different departments of a local authority would have separate procurement processes. As these are made more efficient, companies that offer a portfolio of services are likely to benefit. Shares, currently at 218p, are seen as a strong buy in troubled times.

Mail on Sunday Life insurer Chesnara was originally part of estate agency chain Countrywide, but it established an independent identity in 2004 when the rest of the Countrywide group was sold to US private equity firm Apollo Management. …

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