NRW Holdings chief executive officer Jules Pemberton has credited last year’s takeover of Golding Contractors as the main reason for a company transformation.
The contractor’s order book continues to reach new heights at a record $2.2 billion with last month’s $176 million bulk earthworks contract at BHP’s South Flank iron ore project in the Pilbara.
NRW has regarded the Pilbara as a key region for work during the company’s 25-year history. It has, however, been contracts on the east coast that have pushed the order book more than three times higher than where it was three years ago.
The company acquired Golding, which focuses on Queensland and New South Wales, from Champ Private Equity for $85 million last September.
Golding’s mining division has secured $723 million of major contract awards or extensions in Queensland’s coal sector in the time since.
The awards include a $420 million win at Wonbindi Coal’s Baralaba mine, a $210 million extension at the Conorado Curragh operation and a $93 million extension at Stanmore Coal’s Isaac Plains East mine.
Pemberton, speaking at the Diggers & Dealers Mining Forum, said NRW had previously looked at acquiring Golding before Champ bought it in 2008.
“We were outbid by Champ by a number that was several hundred million more than what we paid for it,” Pemberton said.
“We paid $85 million for it and I think at the time the business went for about $320 million.”
Pemberton believes Golding maintained a strong reputation for quality leadership and delivery under Champ’s ownership.
NRW wanted to credit that history, which began as a family-owned business in 1942, by keeping the Golding name once it took control.
Pemberton did, however, point out how NRW’s backing has contributed to Golding winning its recent contracts or extensions, particularly at Curragh where a new Liebherr 996B was added to the mine fleet.
“(Golding) were capital light by necessity rather than capital light by choice so to get the Curragh extension we wanted to make sure that we committed to a new machine and that’s what we did with the 600t excavator,” Pemberton told Australian Mining.
“The balance sheet strength of NRW as opposed to what their restrictions were in terms of their prior owner has obviously improved their delivery.”
NRW has potential to grow even further through M&A following the success of the Golding acquisition.
The company gained geographical diversification on the east coast in the mining, civil and urban sectors with Golding.
Pemberton said the company would continue to take a strategic approach with M&A as it did with the Golding move, which he described as “right time, right place”.
“You won’t see our numbers for a few weeks but you can obviously tell that our market cap has grown, particularly off the back of the Golding acquisition,” Pemberton said.
“We raised equity at a premium the last time around off the back of the Golding acquisition, which was again to make sure we got shareholder interest back into the business.”
NRW expects revenue growth of 40 per cent in the 2019 financial year, having already secured $950 million of its order book.
The company’s civil division will aim to add new Pilbara contracts at the iron ore replacement tonnes projects that have been launched by the major miners.
It sees $2.5 billion of opportunities in earthworks and concrete at these projects over the next four years.