In my valuation model posted last week, I started off with an...

In my valuation model posted last week, I started off with an EPS of 16c to 17c, on a Revenue of $1.1b, so if we divided that Rvenue by 400m shares, that is a revenue per share of $1,100m/400m = 275c. An EPS 0f 16C hence is an NPAT/Revenue margin of 5.82%. An EPS of 17c is an NPAT margin of 6.18%. You can change these calculations to your liking.

As for the Revenue of $1.4b in FY20, you can invent your own number. And likewise in respect to the $1.6b I invented for FY21. I did not use FY21 in my Target Price arithmetic, other than including it in the fuzzy selection of a PER of 14, and perhaps 15. Had FY21 and later looked bleak, the PER used would have been lower.

The truth is that FY21 Revenue could be less than $1.6b, or greater. As I think the risk is to the upside, I am happy to leave the guesstimated Revenue for FY21 at $1.6b. If NWH managed to get a Revenue of $1,374.4b in FY13, then when one considers bolt-ons like Golding and RCR, $1.6b does not stretch credulity.

My belief that NWH will obtain good Revenue at acceptable margins is based on the simple fact that I believe Management is intelligent, and it will use the current favourable tailwinds to future-proof the company. I makes no sense to make a motza in FY19, FY20 and FY21, then collapse in the years that follow.