Matt: Morning all, I just wanted to direct a question to CAPEX in the coming year and potentially the year after given visibility in your order book, thanks .
Richard:
Thanks Matt look we don’t expect to have a CAPEX expenditure this year beyond .. historical norms, so we’re expecting FY’24 CAPEX…..
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Richard:
Hi ..are we back on?
You’re now reconnected
Thank you, apologies not sure what happened there.
So Matt's question was around CAPEX expectations for FY’24, and basically Matt whilst I was ‘talking to myself’, I was explaining to all assembled on this side that we’re expecting an outcome pretty similar to what we (saw) in FY’23
There are no major new mining projects in our plan.
The .. projects that we do have in our plan are smaller by size and can be managed through existing fleet so should be pretty similar to FY’23.
Matt:
…Sorry so it’s the maintenance portions that’d be similar, and no requirements for that growth part?
Richard:
A normal sort of requirement for growth part..
So we may look to improve margins where we swap out say hired plant for our own equipment, and in terms of the maintenance CAPEX we tend to operate around $80m pa mark, and we expect that to be the same in FY’24
Matt: Great. Thanks I am just interested in your comments on (tenders)…noting that movement from the last..just comments there
Richard:
Well I think again, just as Jules said, right across the business we have a very, very full order book, and so the reduction in tenders from the half to June really does in fact reflect .. some of the awards that we’ve managed to secure in the second half.
And you know if you look at the list from over the years, significant number right across each of the segments.
So as Jules said, there’s $1.6b of tenders still pending award, and they are really going to be your contributors into FY’25 and beyond, so at the moment they’re continuing to wind their way through.
There’s not very much additional coverage that we need to secure the guidance that we’re providing to FY’24
Matt: And similar commentary I take it with outline ..,, noting the kind similar movements.
Richard:
Yes very much so and I guess probably the only other factor I would add there is that we are very, very discriminating about …what we put … what opportunities we devote our tender dollars to.
So there are some things in the pipeline that .. we’ve looked at and discarded - because we know we just not going bother tendering them because we don’t feel that we would get the returns that we’re seeking ..
So I guess that’s a reflection of the fact that we are full, we are busy, we’re not going to over-trade, and we’re not going to waste money tendering things just for the hell of it.
Matt: Great thanks
And ..finally I just want to clarify that there’s no more fixed price contract exposure across the rest of the business now, or was that just a comment that applied to the Primero contract in the METs business? thanks.
Richard:
Look I think - especially in the civil business - we’ve got a track record of successfully delivering very good margins out of fixed price projects, and particularly around the smaller end of things - $20 to kind of $100m scopes - that’s something that we’ve done a lot of historically and something that - particularly in the civil segment - that we’re very accustomed to, and those are not .. how to put it .. big rolls of the dice.
So that will continue to be a feature of that part of the business, and that really is just business as usual for us
What we’re not going to is we’re not going to take the challenging, complex risks - building a process plant, particularly like a Primero-style processing plant on a fixed price basis.
That is not going to occur
So we will continue to take fixed price risks where it’s normal for us, where we’ve done it historically and where we’ve got very experienced personnel continuing to deliver that portfolio.
We’re not going to do it where it involves us stepping out beyond what has been out long term, historical comfort zone.
Matt: Great thank you, that’s helpful
.. And a final one in terms of thoughts around capital management … any potential changes given strong cash ..you know ..…record payouts? ..thanks
Richard:
Look I think we always like to give ourselves a bit of flexibility.
If you look at the performance of the business over the past five or six years, you know we have been very acquisitive.
We continue to look at opportunities regularly where they make sense for us to step out and expand our capacity and continue our diversification.
So I think we always want to be in a position where we have the capacity to act, and act quickly if we see the right opportunity.
So I think we will always have an approach where we’ve got enough wriggle room to move and that’s what our current balance sheet certainly gives us.
Matt: thanks
Operator : There are no further questions.
Jules: Thanks very much for listening everybody. See you all soon, and have a great day.
NWH Price at posting:
$2.72 Sentiment: Hold Disclosure: Held
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