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LONDON - CGI (TSX:GIB.A) (NYSE:GIB) has been awarded a contract worth up to £250 million over five years with His Majesty's Revenue and Customs (HMRC), the company announced Monday. The IT services firm's shares are currently trading at $86.18, near their 52-week low of $84.24, and approximately 30% below their 52-week high of $122.79.
The agreement comprises an initial three-year term with two optional one-year extensions. Under the contract, CGI will help operate and maintain HMRC's integration services, delivering interfaces, APIs, and messaging services that enable secure communication across the tax authority's IT systems.
CGI will work alongside HMRC's in-house experts to manage existing integration capabilities, which form part of the UK's Critical National Infrastructure. The IT services firm will also assist in modernizing HMRC's integration estate and deliver new integrations to support digital transformation programs aligned with HMRC's recently published Transformation Roadmap.
"This new contract deepens our collaboration and enables us to help HMRC accelerate the modernization of its IT estate," said Kevin O'Neill, Senior Vice-President and Business Leader for Government and Justice at CGI in the UK, according to the press release.
HMRC, responsible for tax collection and enforcement activities in the UK, awarded the contract through Lot 3 of the Crown Commercial Service DALAS framework. The framework is designed to modernize IT application services and transform legacy systems into more cost-effective solutions.
CGI, founded in 1976, is one of the largest independent IT and business consulting services firms globally with 94,000 consultants and professionals. The company reported CA$15.91 billion in revenue for fiscal 2025. With a market capitalization of $18.67 billion, CGI maintains strong financial health with an 8% free cash flow yield and a P/E ratio of 16.29. According to InvestingPro analysis, the company appears undervalued compared to its Fair Value estimate, suggesting potential upside for investors. InvestingPro's comprehensive research reports on CGI and 1,400+ other stocks provide deeper insights into what really matters for making informed investment decisions.
In other recent news, CGI Inc reported impressive financial results for the fourth quarter of 2025, surpassing market expectations. The company achieved an earnings per share of $2.13, well above the projected $1.51. Additionally, CGI's revenue reached $4.01 billion, significantly exceeding the anticipated $2.89 billion. These robust earnings and revenue figures highlight CGI's strong financial performance during this period. In another development, Jefferies downgraded CGI Group's stock rating from Buy to Hold. The downgrade is attributed to concerns about CGI's organic growth, which Jefferies notes is lagging behind industry peers. This is reportedly due to the company's greater exposure to underperforming regions and verticals. These recent developments provide investors with key insights into CGI's current financial standing and market position.
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