Results and trading halts: What went down for the NRW share price on Thursday?

We take a look at the construction and mining contractor's day on the market.

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Key points

  • The NRW share price lifted 6% today 
  • The company announced an increase in earnings and net profit 
  • However, later in the afternoon, NRW advised it had launched a merger proposal, only to receive a rejection 

The NRW Holdings Limited (ASX: NWH) share price had a huge day today.

NRW shares lifted 6.25% to $2.38 before entering a trading halt. In late afternoon, the construction and mining contractor released an announcement related to a takeover plan.

Let's take a look at what took place today.

What happened?

NRW entered a trading halt today pending a response to media speculation. Rumours emerged that NRW had launched a takeover offer of Maca Ltd (ASX: MLD), The Australian reported.

However, just before market close, NRW advised Maca had knocked back its proposal.

NRW confirmed it approached the board of Maca with a confidential merger proposal on 11 August. Under the deal, NRW would have acquired all of Maca's shares for $1.085 per share.

However, NRW said Maca "does not consider the merger proposal as superior to the current conditional Thiess takeover offer".

As my Foolish colleague Brooke reported at the time, Thiess launched a $350 million takeover bid at 1.025 per share in July.

Commenting on today's news, NRW managing director Jules Pemberton said: "We are disappointed that the Board of MACA has indicated that it is not willing to entertain our compelling proposal."

NRW share price lifts on earnings

Earlier today, NRW reported full-year financial results. Highlights included:

The EBITA result was higher than the previously forecast guidance of between $150 and $155 million.

Depreciation and amortisation fell 21% as a result of the sale of Boggabri assets in July 2021.

During the year, NRW secured "major order wins", boosting the order book to a record $5.2 billion.

What did management say?

Commenting on the results, NRW managing director and CEO Jules Pemberton said:

These are the best results NRW have reported despite the challenging conditions the business has encountered over the last 12 months.

Apart from the earnings highlight, the strong cashflow underlines the quality of those earnings and our ability to deliver a disciplined approach to balance sheet management

What's ahead?

NRW is predicting FY23 EBITDA in the range of $162 million to $172 million. This assumes projects will face current resource and supply chain pressures. NRW expects these pressures could ease during the 2023 financial year.

NRW has secured $2.3 billion worth of work for the FY23.

Share price snapshot

The NRW share price has soared nearly 43% in the past year and 35% in the year to date.

NRW has a market capitalisation of nearly $1.1 billion based on the current share price.

Motley Fool contributor Monica O'Shea has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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