Ann: Contract Awards, page-32

The FY2020 Annual report stated:

• The order book post the announcement of the Bunbury Outer Ring Road is circa $3.5 billion.
• NRW is forecasting revenue of between $2.2 billion to $2.3 billion in FY21 of which $2.0 billion is from current contracts, agreed mining schedules or is expected as repeatable business in Urban, RCRMT and DIAB..

That left $1.5 billion in the bag for beyond FY21.

One should add whatever has been announced after BORR. I'll not do that arithmetic, because the H1FY21 report stated, “Order Intake in the half was just over $1B generating an order book at the end of December of circa $2.8B.” Note that this is higher than $1.5 billion plus the $1B Order Intake, which hints that Management tends to understate its outlook, so don't add a safety margin yourself.

The Primero acquisition occurred after 31 December 2020, so we must account for that in the revenue guesstimates for FY21 and FY22. Because the dollars are not large, I use Premero's FY20 revenue of $205.6M, and take just under half of it to get $100m to change the original NWH revenue outlook of $2.2B to $2.3B for FY21 to $2.3B to $2.4B, and assume $2.35B.

As for the order book, a comment in the H1FY21 report reads, “Primero has an order book of circa $165M and holds preferred EPC contractor status across multiple projects totalling around $1B.” Invent any number you like, but I used close to $165M to increase $2.8B to $3B.

Some of the guesstimated $3B order book would be subsumed into the $2.3B-to-$2.4B FY21 revenue outlook, but some new values should be added. I am disinclined to get too pedantic about the arithmetic.

In summary, by a leap-of-faith guesstimate, I moot that NWH's FY21 revenue would be $2.35B, an the order book $3.25B. If you want a FY22 revenue forecast, without any pretence of well-considered logic, I'll moot $2.5B, and NPAT at 3% of that to get $75m. I am not too hung-up on the revenue metrics, because I would prefer $2B revenue at 4% NPAT margin to get $80m NPAT.

In the March 2021 Euroz Hartley Investor Presentation, there is a comment to the effect that Management expects MET to be a $1B business within two or three years. I did not factor that growth into any calculations, because I thought there may be compensating reductions in other areas – coal for instance.