NWH 0.88% $2.28 nrw holdings limited

So CIMIC is rumoured as being potentially willing to sell...

  1. 6,298 Posts.
    lightbulb Created with Sketch. 701
    So CIMIC is rumoured as being potentially willing to sell Theiss, largest mining services provider in the world,( https://www.thiess.com/en) if someone with three billion dollars happens by?
    Theiss was founded in Australia in 1934 :https://www.thiess.com/en/about-us/our-history and acquired  by Leighton Holdings in 1983 .

    NRW Holding’s Ric Buratto - Executive General Manager - Civil & Mining used to work  there and coincidentally used to handle the rumoured asking price in annual revenue .
    Bloomberg says he started at Theiss in 2000, and according to previous employer, Decmil,  (from which he joined NRW) https://decmil.com/dmwp/wp-content/uploads/2015/08/ASX-492-2015-Annual-Report.pdf
    Ric has had a long and distinguished career in construction and engineering and most recently held the position of Executive General Manager at Thiess. There he managed a business with in excess of $3 billion in revenue, working on some of the largest and most complex construction and engineering projects in Australia.”


    Apart from joining Downer in feeling it’s mining division  is on the nose these days, CIMIC seems to be doing very well in Australia, although there have been a few rumours it’s ‘over extended’ since it won Brisbane Cross River Rail in April https://infrastructuremagazine.com.au/2019/04/08/cross-river-rail-contract-awarded/.
    It’s also not too popular in Hong Kong after being accused of substandard work that flouts safety regulations, of corporate arrogance and more in regards a major rail contract https://www.scmp.com/news/hong-kong...rns-mtr-corp-and-leighton-contractors-against



    I don’t think NRW will put it’s hand up for Theiss, despite Ric’s familiarity with the company, but I do think it’s useful to keep an eye on peer companies.
    CIMIC has been going OK with government infrastructure projects but not been doing so well in the courts lately with a case that was delayed two years due to be heard later this year https://thewest.com.au/business/mar...o-payout-thanks-to-profit-surge-ng-b88540629z
    And last December ex executive, Peter Gregg found guilty  after another much delayed court case https://www.abc.net.au/news/2018-12...egg-found-guilty-falsifying-accounts/10606970.
    And a  long running federal police enquiry https://www.google.com.au/search?q=CIMIC federal police&ie=UTF-8&oe=UTF-8&hl=en-au&client=safari

    Curiously (or perhaps not so curiously)  last week Motley Fool reported CIMIC was also being attacked from Hong Kong

    CIMIC share price crashes after short seller alleges that its “growth is an illusion”
    James Mickleboro | May 6, 2019
    The worst performer on the ASX 200 on Monday has been the CIMIC Group Ltd (ASX: CIM) share price.

    The engineering-led construction, mining, services, and public private partnerships company’s shares fell almost 11% in morning trade before recovering slightly.

    At the time of writing CIMC’s shares are down just under 7% to $46.60.

    Why are CIMIC’s shares being hammered?
    Investors have been heading to the exits in their droves after CIMIC became the latest ASX company to be targeted by an overseas short seller.

    According to a note out of Hong Kong-based research firm GMT Research, its analysts allege that CIMIC “inflated profits by around 100% in the last two years through aggressive revenue recognition, acquisition accounting and avoidance of JV losses.”

    CIMIC’s “growth is an illusion.”
    Since 2015 CIMIC has grown its earnings by 50%, however GMT Research believes “this growth is an illusion” and the company has actually inflated its profits by $1 billion over the last two years.

    “We estimate CIMIC has inflated reported pre-tax profit by roughly 100% over the past two years, or A$1bn in total, through a combination of aggressive revenue recognition, acquisition accounting and avoiding losses from its Middle Eastern JV.”

    Adding that: “Key warning signs include the build-up of unbilled revenue and the low level of cash tax paid. Indeed, CIMIC has paid just A$161m in tax over the last three years on profits of A$2.8bn, implying a cash tax rate of less than 6%. It suggests profits declared to the tax authorities are much lower than reported earnings.”

    Acquisition accounting concerns.
    The research firm also has concerns over its $524 million acquisition of UGL. It alleges that CIMIC has used acquisition accounting with the purchase of UGL in 2016 to inflate profits.

    It explains: “An acquiror can boost future profits by writing down the value of the target’s assets, such as inventory and fixed assets, or creating additional provisions or other liabilities, which can be utilised or reversed in future periods.”

    It notes that UGL had net assets of $331 million prior to its acquisition and then net liabilities of $484 million when CIMIC consolidated it just a few months later.

    “Following the acquisition, there was an immediate jump in UGL’s profits; it recorded EBIT of A$166m in 2017, its first year under CIMIC’s ownership, compared with just A$63m excluding provisions in its final year as an independent company. By recognising additional liabilities and probably writing down assets, we think CIMIC primed UGL for a rapid increase in profits. We estimate this has boosted CIMIC’s pre-tax earnings by around A$100m in the last two years.”https://www.
    fool. com.au/2019/05/06/cimic-share-price-crashes-after-short-seller-alleges-that-its-growth-is-an-illusion/
    Last edited by sabine: 20/05/19
 
watchlist Created with Sketch. Add NWH (ASX) to my watchlist
(20min delay)
Last
$2.28
Change
0.020(0.88%)
Mkt cap ! $857.0M
Open High Low Value Volume
$2.25 $2.29 $2.18 $5.312M 2.365M

Buyers (Bids)

No. Vol. Price($)
3 37136 $2.28
 

Sellers (Offers)

Price($) Vol. No.
$2.29 125292 11
View Market Depth
Last update - 16.10pm 24/07/2019 (20 minute delay) ?
(live)
Last
$2.29
  Change
0.020 ( 2.03 %)
Open High Low Volume
$2.24 $2.29 $2.18 671140
Last updated 15.59pm 24/07/2019 (live) ?
NWH (ASX) Chart
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.