With a strong financial year under its belt, a healthy order book and a more-than-bullish outlook for the next six months, mining contractor NRW Holdings has more than just survived the downturn in the resources sector, and shareholders are reaping the rewards.
NRW held its 2018 annual general meeting at the Duxton Hotel this week, with the board addressing to a packed room comprising shareholders, media and potential investors.
The event came less than 24 hours after the company revealed its guidance for the six months to December; revenue said to be up 45 per cent to $500 million and earnings expected to double compared to the corresponding period.
Broking house Hartleys issued a note on NRW following release of the guidance update, highlighting that it was rare for a diversified contractor such as NRW to have sustained steady performance across the business without incurring “meaningful interruption”.
“It’s an impressive earnings upgrade and NRW stands out as an island oasis in a sea of disappointments across the sector recently,” Hartleys said in its note.
This came on the back of a prosperous FY18 for NRW, which saw its acquisition of east coast business Golding prove to be a valuable investment decision.
“Since the acquisition was completed in September 2017, Golding has secured a number of key new contracts and extensions on the east coast, including the Baralaba North coal contract with Wonbindi Coal and, more recently, the Isaac Plain East contract with Stanmore Coal,” NRW chairman Michael Arnett told shareholders on Wednesday.
“In WA, NRW was awarded the Dalgaranga mining contract for Gascoyne Resources and the South Flank civil contract for BHP Iron ore.
“Our achievements across the country underpin a platform for significant growth for the years ahead.”
Chief executive Jules Pemberton said the company had near-term opportunities that would support the capital investment programs currently being committed by some of NRW’s major iron ore clients in Australia.
“As our activity levels increase, we continue to see a number of prior NRW and Golding employees return to the business as well as new employees attracted to our culture, growing diversity and order book visibility of the group,” he said.
“A key focus of ours in the year ahead will be on retention, recruitment and training.”
Mr Pemberton said the tender pipeline at around $6 billion remained strong and the company was confident it will be able to retain strong activity in the resources and infrastructure sectors over the coming half-decade.
Mr Arnett also stressed his frustration with proxy advisers during the AGM, after a number of votes were cast against the adoption of NRW’s remuneration report.
He said with the large inconsistency of proxy advisers recommending which way votes should be cast, there was a clear need for more engagement on both sides in order to ensure those recommendations were being based off of the entire picture.
“There’s an inconsistency of approach, year-on-year,” he said.
“Things that were not a problem last year suddenly become a problem this year.
“That’s difficult to manage, particularly from a company perspective.”