NRW bullish on FY20 after acquisitions, order book growth
Diversified contractor NRW Holdings (ASX: NRW) has set its sights on another big year for the business, with an order book of over $2.2 billion and a healthy tender pipeline of about $8 billion worth of potential work.
Perth-based NRW told the market this week it had identified four pillars of growth for the year ahead; supporting the iron ore sector, growing its east coast presence, delivering its initiatives across all existing contracts, and reviewing opportunities to expand its existing service offering in its core markets.
On the east coast expansion ambition particularly, this comes largely on the back of the company’s profitable textbook acquisition of Golding Group, which sustained revenues and generated new business for NRW almost overnight.
In a statement, NRW said these focus areas had been reviewed and revised, recognising the work completed to date and, coupled with the recent acquisition of subsidiaries owned by collapsed contractor RCR Tomlinson, had generated key focus areas.
They included tapping further into traditional civil markets to gain more exposure to future upside in the iron ore market, further optimisation and generation of additional value from the RCR subsidiaries acquisition, growing workforce and evolving its operational model as a multi-disciplined through cycle capital expenditure and operational spending business, as well as exploring further consolidation and strategic opportunities.
“FY19 has been another year of strong growth, with a significant increase in revenue to $1.1 billion while maintaining a strong cash balance of $65 million,” NRW chief executive Jules Pemberton said.
“New civil work, mining contract extensions and improved performance in drill and blast have all contributed to our success over the past financial period.
“Our highly successful acquisition of the RCR Mining Technologies business has added to our diversified capability offering, and the services and people are now well integrated with the NRW business. This acquisition forms part of NRW’s strategy to build a broader, through the cycle services business.”
Mr Pemberton also made mention of the significance of 2019, which marked the company’s 25-year anniversary.
“NRW was founded in 1994 and has been on a fascinating journey of geographical expansion, diversification and growth,” he said.
“Today, NRW is a well-established and highly regarded contractor employing more than 3,000 people across the mining, energy, civil infrastructure and urban development sectors.
“In celebrating this milestone, we wish to thank everyone who has contributed to our success over our first 25 years.”
Looking ahead, NRW has an order book of about $2.2 billion, of which half of that is expected to be delivered in FY20.
Its near-term pipeline has also grown to $8 billion, with the company having submitted tenders of about $1.2 billion at the time of writing.
NRW declared a final dividend of 2 cents per share.
Shares in NRW were up 12.6 per cent over the week, with its stock closing at a week-long high of $2.40 a share.