Leading Australian resources and infrastructure contractor NRW Holdings (ASX: NWH) has provided its annual report to shareholders for the period ending 30 June 2020.
In his letter to shareholders, company chairman Michael Arnett said:
It is with great pleasure I present the NRW Holdings 2020 annual financial report. The past 12 months have been eventful on many fronts.
The highlights include delivering record revenue, strong earnings growth and excellent cash conversion; and the successful acquisition of BGC Contracting. More information on the successes over the last 12 months is provided in the CEO’s commentary which follows.
All of this has been achieved despite having to deal with an entirely new set of challenges due to COVID-19. I commend our CEO, Jules Pemberton, and his leadership team for demonstrating decisiveness, compassion and clear communication in the peak of the pandemic. I acknowledge all of our managers and employees who diligently followed the health advice given by Federal and State governments across all of our operating regions.
I express my gratitude to all 7,000 members of our workforce, including the 2,300 BGC Contracting employees who joined us in December, for the resilience they have demonstrated and their commitment to working with our clients to safely deliver our services.
While health and safety remains the highest priority, it was with great sadness we reported the fatality of Howard Prosser, an employee of DIAB Engineering working at the Roy Hill iron ore mine in Western Australia on January 27, 2020. Our thoughts are with his family, colleagues and friends.
NRW delivered revenue of $2,062 million up 83% on last year as a result of continued growth in the Civil and Mining businesses, a full year’s contribution from RCR Mining Technologies and seven months contribution from the newly acquired BGC Contracting business.
The BGC Contracting (now NRW Contracting) acquisition, significantly enhances the Company’s ability to participate as a large construction partner in public works projects. It also adds further scale and diversity in our Mining business across the Australian resources sector.
The acquisition is already proving fruitful, with the award of the $852 million Bunbury Outer Ring Road project as part of the Southwest Connex Alliance.
As both Chairman of the Company and in my capacity as Chairman of the Nomination and Remuneration Committee, I have worked with my fellow committee members to act on feedback from shareholders whilst ensuring remuneration polices remain effective and appropriate.
Having received a remuneration strike in late 2018 we sought specific independent advice as a remuneration committee from external consultants. The key elements of that advice which are set out in the remuneration report were adopted although not without comment from some shareholders that they would prefer to see the CEO’s remuneration more closely linked to shareholder returns. With this in mind we are considering longer term equity awards for the CEO and senior management which are intended to ensure further value from the Company’s assets is maximised.
We have developed the Company’s remuneration structure to recognise that NRW is a larger and more complex organisation. This will no doubt raise further challenges which we will address to ensure the management team is remunerated recognising these new challenges and incentivised to maximise value across the enlarged organisation.
In February we welcomed Ms. Fiona Murdoch to the Board as a Non-Executive Director. Fiona brings a broad range of experience to the NRW Board, having extensive operational experience across the Australian and international resources and infrastructure sectors. Over the last 12 months the Board has established a new committee to provide advice, recommendations and assistance to the Board of Directors of the Company with respect to sustainability primarily relating to environmental, social and corporate governance matters. The members of the committee are Peter Johnston (Chair), Fiona Murdoch and Michael Arnett. This is an area with growing challenges and I look forward to the contribution the committee can make to meet its mandate.
I am pleased to advise that the Directors declared a final dividend for the financial year of four cents per share. This brings the total dividend for the year to six and a half cents per share following the interim dividend paid in June 2020. The dividend will be fully franked and paid on October 14, 2020. Maintaining and growing a sustainable dividend has been a goal of the board which we have now been able to deliver for five consecutive six month periods.
In closing, and on behalf of the Board, I would like to thank our hard working team led by Jules Pemberton, our shareholders, clients and employees for their ongoing loyalty and support.