odg/haden integrated povided, page-2

Hi Fiscus that is an interesting observation that you have made.

Just from past comments made in the Media by brokers over the past couple of years and by some analyst ( I think RBS & GS) who concluded that the NFK Board and senior management teams approach was very similar to that of MND. It was was also commented on by MND themselves.

As NFK commented themselves in their press release that this "follows the conclusion of an internal process re-engineering project which began in January 2011"
I understand that this has been a continual process, and in the 3 years that I have followed/researched this company this statement fits in seamlessly to its management style and strategy which will certainly have been influenced by their relationship with MND. So yes I agree with the direction of your comments relating to their business model/strategies.

Also it should be noted here considering the GFC impact - what company is not adjusting it's strategies, and in NFK's case and having been to their last 3 AGM's, I understand and know that this recent merger was in line with the strategy & direction that the board and management have been implementing throughout the time I have followed NFK. Although I am sure they looked at unloading Haden as a whole, but this will have presented challenges in two ways, 1. who would buy Haden at a fair value in the GFC market ? 2. By selling Haden as a whole would have almost certainly reduced NFK's market advantage (and I think reinforced as per their comments in the Merger press release) ....." It recognises our customers need for an electrical and mechanical engineering partner that can provide a broad range of innovative and multi-disciplined solutions"...... This is really at the heart of NFK's market advantage and dominant skill set and will have been complex in its planning and execution to achieve this Merger result.
NFK's management have been I believe moving toward this position as quickly as they have been able to, considering the large amount of smaller businesses they had bought together since their intial ASX listing and rationalisation of these companies has been going on consistently throughout this time.
NFK's current strength is that they are well advanced in this process that will further enhance NFK's multi sector clientele mix and ability to efficiently adapt and follow growth industries/sectors with its skill set and service offering.

As for the higher SP such as MND that will follow margin expansion and this will be positively compounded by the ODG Haden merger, but of course this is has to play out and will show up over coming quarters. So longer term as this recent merger takes hold yes this will realise much better margins and therefore higher SP's.

As for giant steps - I think now that the GFC has impacted the globe, companies are more focused on smaller steps that can easily be measured and accounted for. So in NFK's case I think they are achieving their structural and business model goals which is to consolidate the many smaller business units into a more streamlined and easily understood offerings and stronger brand.
This is demonstrated by the clean balance sheet and is consistent with my observations over the past 3 years and is also something that Madas touched on in an earlier postings regarding some inefficient operations - but this has always been known (such as their jettisoning of their loss making plumbing operations about 18 months ago) this was also the case for MND in its earlier days and a number of other successful companies that went on the acquisition trail in their early days of creating scale.
NFK have successfully managed to retain the best resources and skill sets while culling out the less efficient / loss making business units throughout these past 3 years and this ODG Haden merger really is the last phase in this process, although I am sure fine tuning will be ongoing as is always the case in these types of situations.

Apologies for another long posting.