Sabine, your post is relevant to what I I left out of my...

Sabine, your post is relevant to what I I left out of my valuation, and that is FY21 could exceed my $1.6b Revenue guesstimate, but the extra Revenue may attract a lower margin if NWH does not have the fleet and work-force capacity to comfortably handle the extra Revenue, and is loath to invest in fleet that it cannot be certain would be fully utilised in FY22, or hire people, and have to retrench them at a cost later.

It would, therefore, be unwise to expect a near-6-percent margin on the extra Revenue, if NWH has to hire equipment and use outsourced services to do things that it would normally effect via existing resources.

Rather than bothering what the Revenue may be, I am inclined to say that for now, my $3.00 share valuation suffices. If NWH picks up an extra $200m in revenue, and makes, for the want of a number, 3% NPAT/Revenue margin on that $200m, then that is another $6m NPAT, which I'll regard as an extra plum in the pudding to delight shareholders. It would raise EPS by 1.5c, and potentially raise the share price by 15 x 1.5c = 25c, if Mr Market is in a bullish frame of mind. That bullish mood is more likely to be the case if the extra $200m revenue is part of a larger contract extending into FY22, and beyond.

Remember, the cash flow advantage of not paying tax will end in FY21, so there will be less to fund CAPEX in a situation where AASB 16 would tend to favour finance leasing that has the effect of passing ownership of the equipment to NWH (so NWH would be more careful on its fleet expansion), and cash outflows.

Future-proofing NWH by expanding the geographic footprint, attracting more non-mining business, and signing more long-term maintenance style agreements would attract a new style of shareholder to the register, particularly if NWH moves up the scale in terms of Top-200, then Top-100.