Ann: Trading Halt, page-24

THE FUTURE OF NRW HOLDINGS?

Hi pb... the dynamic as to how NRW is placed in both long and short term between the potentially cyclic mining services sector and potentially greener infrastructure pastures is one that is of interest to many of us I think.

So I am going to try to be a bit serious in a ‘whole picture’ - as much as I can see it - kind of a way :



“Is the business model going to be disrupted and changed?” Questions Magellan Chief, Hamish Douglas, in the presentation below.
Clearly it is.

In the same way that some of the big vineyards packed up and moved to Tasmania years back in foreknowledge of increased climate change https://www.abc.net.au/news/2016-06-05/rising-temperatures-spark-winemakers-move-to-tasmania/7371262, we have seen the devaluation of mining services companies due to a pending environment where there is greater competition and automation (followed ultimately by nothing left to mine?).
I have pasted plenty of links to the companies with mining arms for sale, with other companies like MACA doing the hard yards with tiny profit margins.
I have been reading about developments that will apparently revolutionise drilling ...and there is clearly so much more.


As to the ‘greener pastures’of public infrastructure : Well clearly there is a war going on there with foreign companies exploiting the low Australian dollar to supply governments with irrestible deals including bankrolling the projects. To my mind there is plenty of evidence of the consequences of that on Australian companies too - including Lendlease and WorleyParsons .


In the video, Hamish talks about ‘termination value’ or some such and applies it to any retail which is not able to join up with technological platforms like Alphabet (Google) Amazon and Apple in a world - not so far away - where all of our biases will be seamlessly developed, manicured and catered to by technology.


Does NRW have any kind of prospects of a LT growth business model that can survive in this new world?
Where are Jules Pemberton and Andrew Walsh and Geoff Caton in their own particular cycles.
What is the success plan for NRW?
And the succession plan?


I don’t know the answers to these questions but it is no use hiding from the questions.

I know one thing ....it’s easy for me . I could simply push a few buttons and bail tomorrow and still be 40% in front - even after paying out some very bad, very stupid losses.


However as everyone knows (probably management too if they ever read HC ) I do treat this company like it is my own private business ...or at least as if I’m the snoopy tea lady .
You say this is a recommended attitude for professional value investors so I imagine there are others out there besides the ones I assume to be here.

As a result of this very personal investment, I am most unlikely to push the eject button tomorrow.

This is because I am currently more than content with the management team I have chosen to run my company.
I feel they are even more aware of the prevailing and presenting conditions in both the short and long term future
I feel they have even more pride and passion for NRW ( if this is possible) than I do and I feel they intend to succeed and have the flexibility and foresight ( and now the finance ) to grasp any ‘future proof ‘ opportunities that may arise .