NRW revenue, profit up in first half

Civil and mining contractor NRW Holdings has reported strong profit and revenue gains in its interim results, with the company saying its completed acquisitions and plans for alliance-style contracts would support strong future growth.

Chief executive Jules Pemberton said the recently acquired BGC Contracting business will make a significant contribution to the second half of the financial year.

NRW completed its purchase of BGC Contracting in December last year for $116.4 million in cash, funded by a capital raising, and has since been awarded $155 million worth of contracts through the new division, renamed NRW Contracting.

The company disclosed a substantial increase in debt as a result of the purchase, totalling $153.7 million (including $28.6 million in cash) at December 31.

Since the acquisition, NRW has secured $155 million in contracts, including with Fortescue Metals Group for works at the Eliwana mine in the Pilbara.

The group recorded revenue of $808.7 million for the first-half of FY20, up 55 per cent on the first-half of FY19, along with a 28 per cent rise in net profit to $41.2 million.

Comparative earnings before interest, tax, depreciation and amortisation stood at $94.6 million, up 27 per cent.

NRW said its tender pipeline remained strong, sitting at $10 billion.

The combined group currently has more than 100 projects around Australia.

NRW said it had revised revenue guidance for the current financial year, from $1.5 billion to $2 billion.

Managing director Jules Pemberton said diversifying the company’s revenue through organic growth or strategic acquisitions remained NRW's long-term strategy.

“The integration of BGC Contracting is currently our key focus across all business divisions and functions,” he said.

“The structure of the transaction and very good cash conversion across the business has, in our view, strengthened the balance sheet and increased our access to equipment to support operations despite the increase in gearing.”

The company had also acquired RCR Mining Technologies for $10 million in February 2019.

NRW shares closed down 1.66 per cent to trade at $2.97.