That $6bn TenderBook..., page-232

Sabine. I have known since my teenage years that writers like Cicero frequently used terms like terribile putu and mirable dictu to say the equivalent of “sad to think” and “wonderful to relate”, and that the underlying grammar had something to do with either the dative or ablative case of the verbal nouns, “thinking” and “speaking”. On Sunday I decided to delve deeper into the grammar via Google, and you were the most convenient target to brag about my new-found knowledge of respective ablatives – a subject that would not go down well when nattering at the local pub.

On NWH, we can be sure that Management is focusing its mind on future-proofing NWH, and the obvious things to consider would be to add on a series of easily digested extensions to the current business. The following are examples of ideas that one could mull:

• If one can build something, then an easy step is to get into the long-term contracts to maintain that something, and thus smoothen the revenue stream. DOW for instance, has a good business maintaining road and rail networks.
• If the mines that NWH helps to build have to mine below the water table, then that water must be extracted and delivered either to some useful target, or into waterways as directed by the appropriate environment protection agency.
• I recall a Johannesburg-based company, Shaft Sinkers Pty Ltd., that specialised in sinking deep shafts on the Witwatersrand, and it ended up doing so internationally with great success. As a shaft is simply a tunnel that goes down, they easily switched to lateral tunnelling, and landed railway tunnelling work in Sydney in the 1960s, and under-sea tunnelling in Hong Kong.
• If one is a major earth-moving company with existing add-ons like concreting capability, then erecting and maintaining conveyor belts suggests itself, and if this includes tipping ore into rail cars, then unloading those rail cars at the destination end of the line springs to mind. Acquiring RCR may enable NWH to offer a nifty Helix rail-car unloading solution.
• Those large spring clips that hold railway lines to concrete sleepers are called Pandrol clips, and various steel fabricators around the globe are licensed to make them. The RCR Heat Treatment facility could make this type of item.
• RCR is into the electrics required for railway lines and other mechanisms – a capability that dovetails nicely into rail formation, conveyor belt systems, and other mechanisms, this widens what NWH can offer in such fields, and conduces to landing those highly desirable multi-year maintenance contracts.
• If a company is into earthmoving, blasting, tunnelling and concreting, and it happens to have a relationship with Salini, then a major dam-building project, including a long pipeline, would be a doddle.

Suffice to say, there are many options that NWH can consider, and RCR's capabilities are now part of such considerations. The foregoing list still leaves NWH exposed to securing most of its revenue in a fairly lumpy way, and relying on a relatively small customer base. Increasing the customers numbers in the three tiers of government is an obvious path for NWH, and a path down which NWH can easily wend via its Golding business, and as we can see from RCR's contracts, RCR also can contribute to expanding business to new customers like Sydney Water.

I think we can rely on Management to pick the most apt initiatives for NWH. That is, initiatives that NWH will turn into commercial successes. Initiatives to get into solar energy contributed to RCR Tomlinson's demise. I hold shares in TGA, and its management destroyed TGA by a string of ill-fated initiatives though poor ability extract a profit from initiatives. Turning initiatives into successes takes more than an innovative frame of mind and a good vocabulary to explain their dreamed-of advantages to shareholders, and invent excuses when the turd hits the fan.