Ann: Investor Presentation - Euroz Hartleys Conference, page-16

The focus of my 18/03/24 post 72931632 was mainly to switch the topic from FY25 Revenue" to FY25 NPAT, and to bring profit margins into the debate. It worked in the sense that the post elicited a chain of good responses.

I started by intuitively selecting a 10% improvement in NPAT. I thought of being more bullish and factoring in a margin-hike factor, but considering that FY25 is substantially locked in, margin improvements from yet-to-be contracted business would not meaningfully manifest themselves in FY25, so I merely stated "I would not be surprised if NWH increased its quantum of work, and uplifted margins to do much better than $128M in FY25." in a later post without guesstimating that higher NPAT. If there were a reward for a more accurate guesstimate, I would prefer  Yorkie21's $165m NPAT, rather than my $128M.

I do not have a date for when Management intensified focus on margins, but it was earlier than the current Financial Year. Increasing margins in tenders is part of the game –  risk mitigation in contract wording is also required. In the 1923 Annual Report one can read, "The performance of the Primero business was impacted by the close out of pre-COVID fixed-price construction contracts which had to absorb increased costs from low labour productivity and a high inflationary environment. These legacy projects delivered financial outcomes that were well below the tendered margins. They are however now fully closed out and have been replaced by significant new risk-balanced contracts." This would be true for all NWH divisions, and Government is now committed to risk sharing in so-called alliance contracts.