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NWH - NRW HOLDINGS LIMITED


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GILNDALBIE Metals is expected to announce today it will award a $120 million construction contract for its Karara iron ore project to NRW Holdings, a specialist civil and mining contractor.

Trading in NRW shares was halted on Friday due to the announcement being made in conjunction with reporting on a first-half net profit of $15m.

The contract covers the staged earthworks and concrete construction contract on the Karara project. It is understood NRW will also construct site drains, a retention pond and an all-weather airstrip. The contract will run for 14 months and involve 400-500 NRW staff, who will work on-site.

Gindalbie is expected to update the market on development of the Karara project 500km northeast of Perth. The project is a joint venture between the Australian miner and China iron ore and steel player Ansteel.

Karara remains in the early stages, with onsite clearing and earthworks started in the past few months, and a concrete batch plant completed.

NRW's first-half profit is expected to be down on the $19m it recorded for the same period last year, but the company said earlier this month that earnings would be weighted towards the second half. It said full profit would be between $33m and $38m, while its forward order book was worth $600m.

http://www.theaustralian.com.au/business/c...o-1225832751274

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NRW Holdings Ltd (NWH) posted a net profit of $97.14 million for the year to June 30 2012 compared with $41.2m in FY11. Revenue was $1.36 billion against $745.34m.

 

A final dividend of 10c (FY11:5c), franked, will be paid October 30 with record date October 12.

 

-The NRW civil division had a successful year, with revenue of $731.7 million, representing a 91pc increase on FY11 ($382.6 million).

- NRW Mining continued its growth in revenue to $542.2 million, representing a 69pc increase on FY11.

- Action Mining Services (AMS) also experienced impressive improvements in operations and revenue growth this financial year with $46.6 million in revenue compared to $28.2 million in FY2011, representing a 65pc increase.

 

NRW is confident of continued growth with an order book of $2 billion, including secured revenue for FY13 of $1.3 billion. "NRW is targeting growth in both revenue and earnings of at least 15-20pc in FY13," CEO Jules Pemberton said. "We expect to secure further work in Queensland and currently

have a number of tenders pending decision in the region, including with new clients across the LNG sector...With current tender activity still high and submitted tenders of $4.6 billion, we are confident of not only securing additional works to achieve our targeted growth this year but also to further build our order book for FY14 and beyond."

 

Strategically, the company is expecting the civil division's concrete business to increase its scale and capability to represent up to 30pc of the civil revenue in FY13." He said Action Drill & Blast will continue its strong growth profile through its existing client base in WA and Queensland, as well as capitalising on new contract opportunities throughout Australia.

the larger, quality engineers and contractors have pleasantly surprised the market, and beate off the doomsayers. Whether this is achievable in coming years is he moot point, I suppose

 

UBS rates NWH as Buy - Full year earnings were better than UBS had forecast and given guidance for FY13 appears conservative, the broker has lifted forecasts in coming years. The price target increases to $5.15 from $4.85. Return on invested capital remains strong, the stock is trading on an attractive multiple at current levels and the yield is also attractive, so UBS reiterates its Buy rating.Target price is $5.15
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Its sitting at $1.90 and just paid out 18c worth of FF dividends for FY12 on top of earnings growth of 82%.

 

I know next year they are only targeting 15% growth but even at these levels it seems that at $1.90 NWH seems cheap. Have the short sellers just been hammering this due to concerns of a capital raising? I do note though they now have 138m cash on hand and have reduced debt levels as well.

 

I agree that alot of broker recs are targeting in the range of $4-$5.

 

Am I missing something ?

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Your summary says it all Knee. I am of the same opinion and believe that NWH will prosper. I have read the financial report 2x and am satisfied with the numbers.

The company was shorted heavily in the past 2-3 weeks by UBS and others. Hopefully they will turn their sights on other stocks .

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If you look at the ASX daily Gross Short Sale Report its the 13th most shorted stock on the ASX, with over 24% of the stock borrowed

 

A bump of 8% today should make all these shorters hopefully unwind their positions. I will be watching the SP stabalise at current levels ~$2 and checking to see the short sale reports that hopefully will show a reduced position before jumping on board this.

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The daily chart supports that cautious view.

While the recent downtrend appears broken, I note especially the absence of Accumulation indicators.

An entry at current levels may be defensible - with tight stops; but I suspect that, once the shorts have been unwound, buying interest may wane and a drop towards $2 (maybe $2.07) would offer a better entry.

 

post-20537-1350516303_thumb.jpg

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