Golding - “a compelling strategic fit ”, page-5

Hi Pioupiou,

The revenue prospects do look good and are ‘visible’ which leads me back to the margins again.

Some fairly obvious ideas around drivers that have been mentioned are:
- evolving tender competition levels
- growing labour market tightness
- mix of work (mining vs civil)
- mix of hired, client or owned equipment
- avoiding project stuff-ups

There are lots of moving parts to the margins over the next few years and I think it’s very hard for anyone (including the broker analysts) to really make a good prediction here. For that reason I think the market will double 2018H2 numbers as estimates for fy19 and 20.

I take some comfort from 2011-2013 where in the face of some similarities in the labour market and work available, NRW kept margins in reasonably good shape (they reduced but not by much).