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NWH - NRW Holdings

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Maiden Buy of 1,000 @ 2.36

Although chartwise I would pick a target of approx 2.25 based upon choosing to visualize the price as ranging within a very broad rising channel the lower support line of which is at said ~2.25

Held
Possible accumulate

MONTHLY Decade
 
always messy.... $2.90

A trading halt in NRW's ordinary shares with immediate effect.

For the purposes of Listing Rule 17.1, NRW provides the following information:
a) NRW is considering the implications of the legislation proposed by the South Australian Government (Whyalla Steel Works (Port of Whyalla) Amendment Bill 2025) on 13 May 2025, as it relates to the security held by Golding Contractors Pty Ltd (a wholly owned NRW subsidiary) over the assets of Whyalla Ports Pty Ltd.
b) NRW requests that the trading halt last until the earlier of NRW making an announcement to the market or the commencement of normal trading on Friday 16 May 2025.
 
Not good news for NWH, essentially the legislation will change the ownership of the port from Port of Whyalla to One Steel, so presumably the security held by NWH will be worthless as Port of Whyalla Pty Ltd will have no assets.

It seems probable there will be extended legal wrangling over the whole arrangement, and I think it will be years before there is real resolution. From NWH's point of view its probably prudent to consider the worst case scenario, looks like the SA Government will legislate away their security and the administrators will likely not be able to pay NWH what is owed.

Luckily the business is in very good shape, its cash reserves alone are more than double the amount owed, and it is only about 4% of revenue owed to NWH by the administrators.
 
NRW Response to Proposed SA Government Whyalla Legislation

i do not hold this share ( but have in the past )
 

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As I suggested yesterday, NWH has been royally shafted by the SA government and the Administrators, its particularly cynical of the SA Gov to legislate away a lease arrangement they were well aware of (despite their denial.)

I guess one of the learnings as an investor is that we are always subject to potential black swan events, the unknown, unknowns. This is an example of why buying high quality businesses with resilience built into their balance sheets and broader financials is so important. The non-cash impairment will basically offset most of NWH's earnings for 2025.

I would expect the share price will take a thumping and I may get another opportunity to increase my position at a significant discount to value.
 
i would call it sovereign risk , rather than a genuine black swan

however i really should watch this just in case there is a good re-entry opportunity

i have held this in the past and somehow finds unexpected troubles ( maybe putting too much cash into big projects is the problem here )

cheers

( this hasn't been a bad share for me , but definitely a confidence-tester )

in the past i doubled my money ( plus divs. and franking )

but had to average down from $2.06 down to a final parcel @ 18.5 cents between September 2012 and May 2015
 
I would say its a genuine black swan - literally an unknown, unknown. The type of black swan is so called* sovereign risk.

(I say 'so called' because its not a risk, its a hazard, risk is the probability of a hazard occurring. One of my pet hates is the misuse of the word 'risk' by the finance world.)

I reckon having 3 issues over the last decade is not abnormal for a large contractor in any sector. None of them proved to be of any real consequence in the long run. But they do create great opportunities for an investor as sentiment rather than fundamentals drives price in the short term.
 
getting shafted by the Queensland Government when you are a business is not rare up here , even large businesses like NHC and Adani get squeezed up here .. and of course the contractors/sub-contractors involved in progressing the projects get a rough time as well , in the contagion , it is not until the ripples hurt their union mates/supporters that decisions might change
 
NWH @ 2.80 - up only 0.7%
My 1,000 shares advancing by leaps and bounds.

Held
Accumulate

 
$2.96

awarded a contract by Rio Tinto for work at its Brockman Syncline 1 mine development, located within the Brockman Mine Hub in the Pilbara region of Western Australia.
Under the contract NRW will be responsible for the construction of earthworks, roadworks and drainage associated with the primary crusher, overland conveyor and non-process infrastructure, together with construction of haul roads, access roads and concrete
structures.
The scope includes drill and blast along with supply and construction of the mechanically stabilised earth ROM wall, two precast concrete overpass tunnels and in-situ concrete foundations for the primary crusher.
The contract is scheduled to commence immediately with a peak workforce of over 300 people and is valued at circa $167 million.
The project is in close proximity to other NRW construction sites, including the Brockman 4 to Brockman 2 Haul Road contract and the recently completed Western Turner Northern Access Road.
 
Another decent contract for NWH, they are going to need plenty given the impairments that will result from the SA Government legislating away the millions of dollars of secured debt owed to NWH.

 
A solid year for NWH, coloured by the impairment caused by the SA Government's extraordinary action to legislate away the security held by NHW in the Port of Whyalla. The underlying result is a modest increase in NPAT. The FCF running at a bit over $100m is some comfort!

 
$3.80

In a trading halt pending finalisation of the terms of a strategic acquisition.
 
A big acquisition for NWH, on first glance it seems like an excellent deal, I like the move into the electrical contracting. I wonder why SXE or IPG haven't rolled Fredon up as it looks a natural fit. Debt now higher than i like, but should reduce quickly.

 
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