The Announcement was very positive, but not surprising if one considers NWH's broadened skillsets and work in hand. Mr Market seems to have misunderstood NWH in recent years. He is a lazy critter, and has to be spoonfed.
On expanded skillsets, I have often used the adjective “grunt” to describe the work on which NWH used to focus in earlier years, and as I had the time this early morning, I did an “advanced search” of my posts that used the word “grunt” (slang for an unskilled worker). By 2022 NWH's transition to more skilled work had become patent, so I dropped that grant-to-smarts topic. Below are most of the references to the word “grunt” that I located from my old posts.
25/05/18 – NWH is that it is moving up the grunt-boffin ladder to become something more than a earth-moving company, so its normal PER may move closer to the average 15.
14/01/19 – NWH is also well run. Historically I classed it as a “grunt” (good at earthmoving, and not too flash on things more complex than that). However, NWH is transitioning into something more than a grunt, and it should emerge closer to MND in sophistication in the short term.
31/01/19 – I have mentioned before that NWH is on an capability trajectory to take it from being a grunt that moved dirt to a more skilled business. The first step years ago was to improve its concreting ability, which is now of a high order. The current negotiation to buy the RCR units will move NWH's capability up a rung or two on the ladder.
25/02/19 – RCR two businesses that NWH acquired. This acquisition is going to be more than catalytic in NWH's transformation of an earthmoving grunt to a high-capability company.
17/05/19 – My guesstimate of $300m for Eliwana assumes that the work package would include tasks higher up the grunt-to-smarts ladder.
05/08/19 – Things seem to be going well at the non-grunt end of the mining services sector.
09/08/19 – Also, the acquisition of RCRMT gives NWH scope to offer non-grunt services required to beneficiate magnetite, which amongst other things, needs to be finely ground.
15/10/19 – I was interested in the information that suggested Golding had skillsets involving pipelines, high voltage power lines, and fibre optic cables – nice complements to the usual grunt work.
04/11/19 – Here are metrics for NWH, MND (Monadelphous) and LYL (Lycopodium) for the last decade, plus a total for the decade. Both MND and LYL are higher up the grunt-smarts ladder than NWH and BGC Contracting are, so one should expect them to have a higher NPAT/Revenue ratio.
02/06/20 – Sabine, when I commented on the overlap between the services that MACA and NWH have in common, I was thinking earthmoving, which I think of as being on the grunt end of NWH's spectrum of services. The other services like building complex bridges, conveyor systems and the like are not within that overlap.
24/01/21 – Without knowing much about Primero (PGX), I sensed that it had skill sets that augmented those that NWH gained via acquiring RCR and DIAB, and hence PGX is part of the play to move NWH up the grunt-to-smarts ladder.
25/01/21 – One often reads that NWH is becoming more like MND as it climbs the grunt-to-smarts ladder. LYL is, but for its smaller size, perhaps a better example of a more-smarts-than-grunt business. LYL is mainly known as a player in the mining-plant game, but it turns its hand to any engineering project that requires more brains than brawn.
08/02/21 – Jules should use all his charm to pally up with Laing O'Rourke. Laing O'Rourke is a UK internationa that is at the top of the grunt-to-smarts ladder. There is nothing wrong with being the Number 2 member of a winning consortium.
13/04/21 NWH a decade ago had low skills, and even when they landed a job requiring concreting, Management would subcontract Wittens. From memory, NWH had the lowest scores possible as a prequalified road and bridge builder. The skillsets today are vastly superior, and NWH is not as reliant on the grunt work for the mining sector as it was a decade ago.
29/07/21 – Anyhow, as long as the hopeful [in the lithium sector] have raised enough funds to pay for ECI (early contract involvement) and any follow-up engagement, Primero can blithely skip from project to project. Lithium processing lithium is more like processing chemicals than any other ore, so that is a pathway for NWH to skip up the grunt-to-smarts ladder, and broaden the sector base from where it now gets business.
17/08/21 – I had often wondered if NWH could with advantage increase its share of water-and-electricity infrastructure contracts, but I had forgotten that Goulding has skills in the network side of these two areas via its Urban business unit, augmented by the need for the same skills in its Civil business unit. Add Primero to the story, plus skills that NWH-of-old had built organically, and we have the wherewithal to tackle non-grunt projects.
14/09/21 – The higher up the grunt-to-smarts ladder that a company is, the higher its profit margin tends to be, and hence the higher its SP relative to NTA per share. That METS is now well established, and hurtling to becoming a $1B-revenue business suggests NWH may now be above the sector's average rung in that ladder.
08/12/21 – . . . firms like Lycopodiumthe (LYL), Monodelphous (MND) and now NWH via its MET unit, can make their contribution at the smart end of the grunt-to-smarts spectrum of mining and similar services.
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