The words in the article at...

The words in the article at https://www.theaustralian.com.au/bu...s/news-story/c5a68cc144709e773d1a5f280e68ea2f, “It is understood that BGC Contracting generates somewhere between $800 million and $900m in annual revenue, with its earnings margins understood to be somewhere between the low double digits and high single digits and a contract pipeline worth more than $1.7 billion.”, suggest that BGC Contracting makes a much better profit margin than NWH does. Either the opinion is wrong, or we are paying Jules too much for mediocre results. Alternatively, it's a semantic issue that arises because there are four levels of profit or profit margins: gross profit, operating profit, pre-tax profit, and net profit.

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 higherf NPAT/Revenue ratio. You might have to shrink the size to make the table fit your screen.

NWH
Sales $ .. 2.43 – 2.91 – 4.85 – 4.91 – 4.05 – 2.78 – 1.03 – 1.17 – 2.04 – 2.81 – 28.98
EPS c .... 15.1 – 16.1 – 34.7 – 26.5 – 15.8 – -26.0 – 5.7 – 9.8 ... 12.2 ... 7.4 ... 117.3
........... 6.21% 5.53% 7.15% 5.4% 3.90% -9.35% 5.53% 8.38% 5.98% 2.63% 4.05%
MND
Sales $ – 14.63 – 16.23 – 21.01 – 28.52 – 25.27 – 20.08 – 14.62 – 13.27 – 18.46 – 15.67 – 187.76
EPS c ..... 95.5 – 106.9 – 139.5 – 170.6 – 150.3 – 113.9 –– 71.8 –– 61.8 –– 76.1 –– 53.6 –– 1040
............ 6.53% 6.59% – 6.64% – 5.98% 5.95% – 5.67% 4.91% – 4.66% 4.12% – 3.42% – 5.54%
LYL
Sales $ .. 3.09 –– 4.32 –– 5.84 –– 6.19 – 3.86 – 3.07 –– 3.1 – 5.41 –– 4.83 –– 3.8 –– 43.51
EPS c .... 42.5 –– 45.0 –– 56.0 –– 55.4 –– 9.8 – -2.3 –– 9.2 – 26.6 –– 48.5 –– 41.5 – 332.2
.......... . 13.75% 10.42% 9.59% 8.95% 2.54% -0.75% 2.97% 4.92% 10.04% 10.92% 7.64%

Without knowing what NWH may pay for BGC Consulting, and what it is worth, I have no opinion on the matter. However, I note that Jules is likely to have his generous remuneration increased to recognise the greater responsibility of running RCR Mining Technology and Golding. This bothers me for two reasons. Firstly, it need not take up more time, effort and skill for a CEO to run a large organisation compared to a small one, because larger organisations have layers of competent managers and senior staff to assist them. Secondly, it gives the CEO a personal incentive to acquire companies, and potentially bias him to acquire for personal reasons a company that for shareholder reasons should better be avoided. And added to this is the share dilution that institutional capital raising occasions at the expense of retail investors, as happened in the Golding's case.