Good morning everybody and specially @pbawley good morning All...

Good morning everybody and specially @pbawley good morning
All your posts are ‘gold’. ....
(And I wrote that before I went outside to look at the sunshine and came back to see this morning’s announcement of funding to Gascoyne !)

....The one, from six months back, ( June 19 this year,) seems particularly apropros given the current price climate
As it made me feel better to read it over the weekend I am bumping it to the top of the thread to cheer up others.



“Just thinking again about how to best value NRW as contracts are awarded from here. As I mentioned some time ago, IMO the orderbook has proven to be a reasonably good (albeit rough) valuation tool historically. The company trades roughly at 0.35 x the order book after reporting season (except when it looked like the company would go under in FY15/16):

View attachment 1153212

As far as it goes, to me this sort of makes sense - the worth of a cyclical company is strongly related to the locked-in work it has (assuming nothing drastic happens), in addition to it's current earnings. The contracts have become longer term, and the OB is expanding now. That should in my mind allow the PE multiplier to improve from it's fairly cheap levels to get closer to other services companies (which is the re-rating we are all waiting for).

Currently NRW is roughly at a $2.2Bn orderbook ($2Bn as at Macquarie conf in early May, and $210m Curragh Coal extension after that), which is $6 per share, getting closer to the $7.8ps peak of FY 2011. The PE got as high as 19 in 2011 when the orderbook peaked.

If NRW were to say win a $500m contract with RIO later this year we could easily justify a share price of $2.60 on this basis. However, at the moment we should be north of $2 even without that win and the market has for now decided to ignore this!

Just another way to look at it.
DYOR etc, Cheers, pb”


You were spot on with the numbers :
From Chairman, Michael Arnett’s address at the last AGM:
https://hotcopper.com.au/documentdownload?id=uOMxKKzFkiWRTLKhOROKAxjvTDYD4g69zxSZruBxke92GA==
“NRW delivered $754.3 million in revenue, which is double that of the previous year, and grew the order book to a record $2.2 billion in July 2018. Net profit after tax increased by 48% from the previous year to $42.2 million.”



Another visit to November 20 guidance :https://hotcopper.com.au/documentdownload?id=uOMxKKzFkiWRTLKhOROKAxjvTDYD4we1zRKZruBxke92GA==

“NRW CEO and Managing Director Jules Pemberton said, "Despite some weather impact on Queensland projects during October activity levels for the year to date remain on track to deliver full year revenue in line with our guidance of $1.1 billion. I am exceptionally pleased however with our operational performance so far this year which has continued to improve across all parts of the business and is clearly demonstrated in our earnings outlook”.




As far as the earnings outlook goes, on the ‘likely-to-be-definite’ horizon:

-New ECI with Fitzroy Australia Resources : https://hotcopper.com.au/documentdownload?id=uOMxKKzFkiWRTLKhOROKAxjvTDYD4wa1zhaZruBxke92GA==

-And something still to eventuate from our long term ECI with RIO since last May :
https://www.australianmining.com.au/news/nrw-secures-early-contractor-agreement-rio-tinto/



Whatever is going on in America, and whatever the general market reverberations here, and whatever are the specifics of the ecurrent price attack at NWH, things DO seem to be snowballing a bit right now with RIO :

As noted Pindan already has contract to do the Koodaideri village .
More recent contacts include two to SIMPEC, a division of WestStar:
One, on December 17 to streamline RIO’s Cape Lambert port facility https://*********.com.au/weststar-industrial-subsidiary-awarded-rio-tinto-contract/
And on December 4, to get moving either electrics and communication systems for the 600 person West Angelas village
https://www.australianmining.com.au/news/simpec-wins-4m-contract-at-rio-tinto-iron-ore-site/




WEST ANGELAS REMINDER :
https://thewest.com.au/business/min...r-expansion-to-create-1200-jobs-ng-b88976954z
Rio Tinto nod for $2.15b Robe Valley, West Angelas investment to create 1200 jobs

Tenders seem to have all closed for just a few weeks back ....
https://gateway.icn.org.au/project/4144/west-angelas-deposits-cd
- maybe there is something there for us ?

Cheers