ASX:NWH

Stock Analysis Report

Executive Summary

NRW Holdings Limited, through its subsidiaries, provides civil and mining contracting, urban development, and drilling and blasting services in Australia.

Rewards

Trading at 44.6% below its fair value

Earnings are forecast to grow 28.96% per year

Risk Analysis

Large one-off items impacting financial results

Profit margins (3%) are lower than last year (6.2%)

Shareholders have been diluted in the past year



Snowflake Analysis

Excellent balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has NRW Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NWH has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-5.1%

NWH

-2.2%

AU Construction

1.5%

AU Market


1 Year Return

34.6%

NWH

-31.8%

AU Construction

15.6%

AU Market

Return vs Industry: NWH exceeded the Australian Construction industry which returned -32.4% over the past year.

Return vs Market: NWH exceeded the Australian Market which returned 16.1% over the past year.


Shareholder returns

NWHIndustryMarket
7 Day-5.1%-2.2%1.5%
30 Day-17.6%-17.3%0.4%
90 Day4.5%-10.9%4.1%
1 Year36.5%34.6%-29.2%-31.8%20.6%15.6%
3 Year285.2%275.8%-3.2%-12.7%37.1%18.7%
5 Year906.8%882.5%71.5%41.3%50.9%17.1%

Price Volatility Vs. Market

How volatile is NRW Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is NRW Holdings undervalued compared to its fair value and its price relative to the market?

44.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NWH (A$2.8) is trading below our estimate of fair value (A$5.05)

Significantly Below Fair Value: NWH is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NWH is poor value based on its PE Ratio (32.4x) compared to the Construction industry average (15.1x).

PE vs Market: NWH is poor value based on its PE Ratio (32.4x) compared to the Australian market (18.8x).


Price to Earnings Growth Ratio

PEG Ratio: NWH is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: NWH is overvalued based on its PB Ratio (3.6x) compared to the AU Construction industry average (1.7x).


Next Steps

Future Growth

How is NRW Holdings forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

29.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NWH's forecast earnings growth (29% per year) is above the savings rate (1.1%).

Earnings vs Market: NWH's earnings (29% per year) are forecast to grow faster than the Australian market (9.6% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NWH's revenue (19% per year) is forecast to grow faster than the Australian market (4.2% per year).

High Growth Revenue: NWH's revenue (19% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NWH's Return on Equity is forecast to be low in 3 years time (19.3%).


Next Steps

Past Performance

How has NRW Holdings performed over the past 5 years?

54.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NWH has a large one-off loss of A$28.4M impacting its June 30 2019 financial results.

Growing Profit Margin: NWH's current net profit margins (3%) are lower than last year (6.2%).


Past Earnings Growth Analysis

Earnings Trend: NWH has become profitable over the past 5 years, growing earnings by 54.9% per year.

Accelerating Growth: NWH's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: NWH had negative earnings growth (-23.5%) over the past year, making it difficult to compare to the Construction industry average (17.1%).


Return on Equity

High ROE: NWH's Return on Equity (11.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is NRW Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: NWH's short term assets (A$260.1M) exceed its short term liabilities (A$234.9M).

Long Term Liabilities: NWH's short term assets (A$260.1M) exceed its long term liabilities (A$62.3M).


Debt to Equity History and Analysis

Debt Level: NWH's debt to equity ratio (19.2%) is considered satisfactory.

Reducing Debt: NWH's debt to equity ratio has increased from 0.2% to 19.2% over the past 5 years.


Balance Sheet

Inventory Level: NWH has a high level of physical assets or inventory.

Debt Coverage by Assets: NWH's debt is covered by short term assets (assets are 4.7x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: NWH is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: NWH is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is NRW Holdings's current dividend yield, its reliability and sustainability?

1.43%

Current Dividend Yield


Dividend Yield vs Market

company1.4%marketbottom25%2.3%markettop25%5.5%industryaverage2.9%forecastin3Years2.8%

Current dividend yield vs market & industry

Notable Dividend: NWH's dividend (1.43%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.29%).

High Dividend: NWH's dividend (1.43%) is low compared to the top 25% of dividend payers in the Australian market (5.5%).


Stability and Growth of Payments

Stable Dividend: NWH's dividend payments have been volatile in the past 10 years.

Growing Dividend: NWH's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (46.3%), NWH's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NWH's dividends in 3 years are forecast to be well covered by earnings (33.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.1yrs

Average management tenure


CEO

Jules Pemberton 0

9.6yrs

Tenure

AU$2,279,730

Compensation

Mr. Julian Alexander Pemberton, also known as Jules, has been the Chief Executive Officer of NRW Holdings Limited since July 7, 2010 and serves as its Managing Director. Mr. Pemberton has been Executive Di ...


CEO Compensation Analysis

Compensation vs Market: Jules's total compensation ($USD1.53M) is above average for companies of similar size in the Australian market ($USD931.92K).

Compensation vs Earnings: Jules's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Julian Pemberton
CEO, MD & Executive Director9.6yrsAU$2.28m3.04% A$36.8m
Andrew Walsh
Chief Financial Officer6.1yrsAU$1.25m0.68% A$8.2m
Kim Hyman
Company Secretary12.6yrsAU$406.63kno data
Enrico Buratto
Executive General Manager of NRW Civil & Mining2.3yrsAU$695.37kno data
Geoff Caton
Executive General Manager of Golding0yrsAU$936.65kno data
Ian Gibbs
General Manager of RCR Mining Technologies & Heat Treatment1yrsAU$422.11kno data
Keith Bassett
Group Manager of Human Resources6.1yrsAU$282.17kno data
Michael Gloyne
General Manager of Mining for Civil & Mining Businesses5.4yrsAU$194.01kno data
Dennis Donjerkovich
General Manager of Civil - NRW Civil & Mining4.2yrsAU$149.42kno data
P. Miguel
Manager of Project Plant & Equipment21.6yrsAU$281.48kno data

6.1yrs

Average Tenure

Experienced Management: NWH's management team is seasoned and experienced (6.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Julian Pemberton
CEO, MD & Executive Director9.6yrsAU$2.28m3.04% A$36.8m
Michael Arnett
Chairman of the Board3.9yrsAU$159.25k0.24% A$2.9m
Peter Johnston
Non-Executive Director3.6yrsAU$109.50k0.026% A$320.3k
Jeffrey Dowling
Non-Executive Director6.5yrsAU$136.88k0.085% A$1.0m

5.2yrs

Average Tenure

Experienced Board: NWH's board of directors are considered experienced (5.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.2%.


Top Shareholders

Company Information

NRW Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: NRW Holdings Limited
  • Ticker: NWH
  • Exchange: ASX
  • Founded: 1994
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: AU$1.212b
  • Shares outstanding: 426.69m
  • Website: https://www.nrw.com.au

Number of Employees


Location

  • NRW Holdings Limited
  • 181 Great Eastern Highway
  • Belmont
  • Western Australia
  • 6104
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NWHASX (Australian Securities Exchange)YesOrdinary SharesAUAUDSep 2007
3NRDB (Deutsche Boerse AG)YesOrdinary SharesDEEURSep 2007
NWHCHIA (Chi-X Australia)YesOrdinary SharesAUAUDSep 2007
NWHCHIA (Chi-X Australia)YesOrdinary SharesAUAUDSep 2007

Biography

NRW Holdings Limited, through its subsidiaries, provides civil and mining contracting, urban development, and drilling and blasting services in Australia. It operates through four business segments: Civil, Mining, Drill and Blast, and Mining Technologies. The Civil segment delivers private and public civil infrastructure, mine development, bulk earthworks, and commercial and residential projects. Its civil construction projects include roads, bridges, tailings storage facilities, rail formations, ports, water infrastructure, and concrete installations. The Mining segment engages in the mine management, contract mining, load and haul, dragline, and coal handling prep plants operations; maintenance activities; and fabrication of water and service vehicles. The Drill and Blast segment offers integrated end to end production drill and blast services to the mining and civil construction sectors. The Mining Technologies segment supplies mining technologies; and provides thermal engineering and heat treatment services. NRW Holdings Limited was founded in 1994 and is headquartered in Belmont, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 10:35
End of Day Share Price2020/02/17 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.