The NRW Holdings Limited (ASX:NWH) share price has soared by more than 9% in early trade, following the release of the company's FY20 results.
NRW Holdings provides a range of services to the Australian resources, civil infrastructure and urban development sectors. The company has 4 core operating segments: civil, mining, drill, and blast and mining technologies.
Impressive FY20 revenue and earnings growth
NRW delivered impressive FY20 revenue growth, up 83% to $2,062 million. Earnings before interest, taxes, depreciation and amortisation (EBITDA) growth was also very strong at 74%, coming in at $250 million for the full year. Meanwhile, normalised operating EBIT amounted to $140.9 million, which was up by a massive 120% on the prior year.
Normalised earnings per share was 21 cents for NRW, up significantly on 10.7 cents in FY 2019. Net earnings after tax increased 122% to $89.7 million, when normalised for acquisition intangibles.
NRW ended the 2020 financial year with a very strong balance sheet. Total cash amounted to $170 million on 30 June, up sharply from $105 million, 12 months prior.
Cash conversion reached a record high of 97% for NRW, while total debt repayments amounted to $82.4 million during the financial year.
Growth strategy progressing
NRW noted that the acquisition of BGC Contracting, which was finalised in December last year, had been successfully completed. BCG Contracting has now been fully integrated into the wider company.
Likewise, RCR Mining Technologies and DIAB Engineering have also been successfully integrated into the group. The latter 2 divisions are now on track to deliver combined annual revenues of $500 million. This is anticipated to be delivered via growth in maintenance, fabrication, shutdown and project works.
Commenting on the results, Jules Pemberton, NRW chief executive officer and managing director, said:
Growing record revenues to over two billion dollars during the year is a great achievement, however the highlight for me is the strong contributions made to that growth from all parts of the business. Doubling the earnings from last year also demonstrates that we can deliver work profitably and through our disciplined approach, produce outstanding cash conversion despite the magnitude of the challenges faced over the last 12 months.
Market outlook
NRW is confident that it is in a very strong position to tap in to a rising number of growth opportunities in the next 12 months. This will be underpinned by strong recent organic growth and the completion of a range of strategic acquisitions over the prior 3 years.
NRW reported its order pipeline is currently in a solid position. The group also highlighted the potential for additional infrastructure projects to be added to its pipeline as part of government initiatives to address the economic impact of of COVID-19.
The group's pipeline of tenders and prospects for the 12 months has risen to $12.9 billion. NRW has forecast revenue for FY 2021 to be between $2.2 billion to $2.3 billion.
At the time of writing, the NRW share price is up by 9.28% to $2.12 per share.
