Hi everyone,
Here a ‘next instalment’ of the call trascript , although I jumped to the questions today ….
cheers
QUESTIONS …
William Park from Citi (25.30)
.. Thanks for taking my question.
..Could you step through the additional review processes that you alluded to (in relation to Primero overstatement ) and which projects you are referring to please?
Richard: We are not really at liberty to talk about the results of specific projects … It’s not something we have done historically and indeed the confidentiality requirements that our clients impose on us prevent us talking about the results of specific projects.
What we have done at a group level is implemented a number of review controls right across all of the businesses that allow us to - independently of the businesses - go back and effectively prove the margin up from each of the reported results .
Now we maintain a very close review process with the business leadership and on a monthly basis they present the results … and we step through every project … And that’s a really important control for us and something that our auditors verify is an important control.
But what I am talking about now is something completely independent of that - It’s something we undertake through the corporate team, and that’s to go back to the source data and really perform a series of checks to make sure that the estimates that have been made …..are complete, the forecast costs etc can be supported through independent data review and analysis,
We are also making a number of system changes across the business and these have been ongoing a little while and they continue.
and that’s a group wide (iniative) … RCR is already there . ..Primero going through the scoping and will be by the end of the calendar year and we will be bringing the rest of the business on in the next 12 to 18 months ..
So it’s effectively a series of different things that we’ve undertaken and we are not reliant on any one particular measure or check …
we have a series of cross checks in place that now gives us the confidence going forward
Willian Park In terms of near term project awards/ opportunities can you (go) through some of the major ones that require pointing out …
And whether you are seeing any changes from a competitive dynamics perspective
..At the interim results you talked about some tender losses due to competition takimg a less disvuplined approach NRW having a more disciplined approach ….
changes in last six months or so?
Jules:
Not really Will .. I think that the jobs others might have won in civil earthworks, we wanted to lose, we didn’t want to win.
So we’ve been pretty clear on our approach to that and (about the focus) on improving margins across our civil business particularly..
So we have been very diligent around that.
But the level of competitors aren’t there.
Over on the East Coast, Golding has a very full order book .. they’re continuing to bid work .. but they a really full order book for ‘24 and into ‘25.
Primero is obviously very busy with the Fimiston award .
We are busy at Pilbara Minerals and other projects as well.
…. so we have a pretty full order book
If you are thinking about major awards in the hundreds and hundreds of millions I don’t think you’ll see anything much until the second half because we are so full in terms of our order book at the moment.
But we do have a pipeline of bids that have been submitted at 1.6 , and we have been very disciplined across the mining business as well, making sure that we are not going in there at the kind of margins that we have bid in the last three years … cost of capital has gone up, interest rates have gone up … so we’ve been very disciplined, and fortunately we are in a good position because we have a lot of work on the book and it’s a lot of work under different style contract structures as said on that summary page.
It’s a very different profile and a much better risk profile for us.
….. one more from William but due to an appointment and not wanting to lose the post …
I am designating it “to be continued …”
(20min delay)