NRW Holdings (ASX:NWH) has released its half-yearly financial report and presentation for the half-year ending 31 December 2019.
HIGHLIGHTS
Operations
-
Revenue of $808.7 million, an increase of 55% compared to the prior comparative period (pcp)
-
Comparative EBITDA of $94.6 million up 27% on pcp
-
NPATA(3) up 28% to $41.2 million BGC Contracting
-
Completed acquisition of BGC Contracting (renamed NRW Contracting)
-
Cash payment funded through equity raised at a premium $116.4M
-
Net Debt assumed(4) (included $28.6M of cash) $153.7M
-
-
Total consideration $270.1M
-
Value underpinned by a fleet of over 200 items of high quality mobile mining equipment and DIAB Engineering generating maintenance annuity style revenues
-
Integration progressing well with circa 50% of annual run rate savings already achieved of the $15 million target
-
BGC Contracting awarded 65km of rail formation at Eliwana for Fortescue Metals Group ($138M); and additional works at Eliwana also awarded – Airstrip and Roads ($17M).
Strategic
-
Secured $70 million of new Civil contracts for BHP Mitsubishi Alliance (BMA) at Blackwater and Goonyella
-
RCRMT has secured $171 million of work under NRW ownership (to December 19) including the award of a design and construct equipment package for a crushing plant for FMG at their Cloudbreak mine site. Acquisition of DIAB Engineering to further strengthen our service offering
-
Awarded circa $70 million Iron Bridge package for FMG and Formosa Steel (February 2020)
-
Formed Alliance partnerships for large West Australian infrastructure projects.
Balance Sheet
-
Strong cash conversion resulting in cash holdings increasing to $122.5 million from $65.0 million at June 19
-
Net Debt increase due to assumption of BGC Contracting asset finance debt: Gearing increased to 37.8% – forecast to reduce to below 30% by financial year end
-
Interim Dividend declared of 2.5 cents fully franked (up 25% on pcp).
Commenting on the results Jules Pemberton, NRW’s Chief Executive Officer and Managing Director, said: “Despite the very positive calendar year 2019 the company has had, including the highly successful acquisitions of RCRMT and BGC Contracting, the events of the last six months remind us of the importance of ensuring the safety and wellbeing of our people.
“Sadly, we reported on 28 January that one of our employees in the recently acquired DIAB Engineering business sustained serious injuries on site and later tragically passed away in hospital.
“DIAB Engineering continue to provide support to the investigation into the incident, and to the family and their employees.”
Turning to the results, the first half performance shows another period of growth in both Revenue and Earnings across all parts of the business. The acquisition of BGC Contracting which completed in December will make a significant contribution to the second half performance and will support further business growth.
The integration of BGC Contracting is currently our key focus across all business divisions and functions. We successfully managed the integration of the RCRMT business in the year which has delivered a standout performance since the acquisition in February 2019.
We are aiming for similar results from the BGC Contracting business. The acquisition of BGC Contracting was very strongly supported by shareholders through the equity raise which completed at a premium, and the subsequent share purchase plan, which completed in January 2020.
The structure of the transaction and very good cash conversion across the business has, in our view, strengthened the balance sheet and increased our access to equipment to support operations despite the increase in gearing.
