When I searched my old posts for the word “grunt” on Thursday...

When I searched my old posts for the word “grunt” on Thursday morning, I uncovered my post 62949553 of 05/08/22 that touched on two issues that relate to Page 6 of the 29/11/23 Presentation – a) work in hand to ameliorate the need to bid for less-than-suitable business; and b) diversity of grunt and non-grunt contracts (CAPEX heavy and CAPEX heavy balance). That post stated:

In loose terms, NWH has two years of equivalent future revenue in hand. It does not desperately have to bid for low-margin work to keep teams busy at a time when it is difficult to staff the teams. Hence better margins, one would think.

Also, NWH does not have to bid for work that requires meaningful CAPEX, unless the contract is long enough, and lucrative enough, to recoup, or substantially recoup that CAPEX, or the nature of the equipment is of a type that can be readily deployed elsewhere.

Further on fleet, firms like NWH have an inbuilt heat sink. When business that requires CAPEX is booming, cash can be low. When that style of business slackens off, cash tends to be be available to pay out leases and reduce debt generally. Much the same happens when the ratio of grunt work and skilled professional work (think Primero) changes in favour of the latter, because those activities are capital light. Getting into BOO deals is the opposite [CAPEX heavy], but not a bad move if NWH is cashed up.

Diversity of items in the fleet and the nature of the diverse skillsets allows NWH to build employee loyalty by offering unskilled people to become skilled, and to allow narrowly skilled workers to broaden the licences, tickets, accreditation, and certification they hold. On page 12, the Presentation states, Continual focus on building capability – 234 apprentices and trainees, 32 graduates and undergraduates, 240 staff formal training programs.

Optimising a business includes taking on digestible volumes of novel work that may not be profitable initially, but which can be used as the foundation of a new income stream. NWH has via Primero built a global leadership position in the lithium space, for example. Repeating that lithium story could be for Primero to become a leader in the ultra-purity alumina used in LEDs, crystal glass applications battery separators. The last mentioned requires 99,999% purity. This relates to page 19 of the Presentation that relates to METS.