Thanks very much, and yes, good morning and good afternoon to everyone for joining us at our FY 2024 presentation. I might skip past the full year highlights page, and we'll talk about a few of those things during the presentation, and obviously, Richard will join in for the financial summary as well. I'll go on to slide 3. You know, we had an exceptional result for the year, you know, driven by all of the business units, and particularly an improvement again in things like civil and MET through Primero's performance coming through very strongly in the year. We ended up with a revenue of AUD 2.9 billion, which is up 9.2% on FY 2023. But more importantly, our profit measures, EBIT, EBITDA and NPATN, were significantly up on the prior year.
We had, you know, talked about this in the past, that particularly pre, or post the COVID and hyperinflation years that we've had up until sort of 2022. We've seen a strong recovery in the business, that sort of settling down of our pricing expectations, and we're seeing that now flow through to the bottom line, which is, which is obviously very pleasing. Normalized earnings, obviously up as a result of that great performance as well. Cash holdings, record cash holdings and a strong conversion rate. Half-year conversion rate wasn't as strong, and obviously, that's flowing through, with the receivables and receipts that we've seen come through the full year. So very positive cash holding position. And line remains robust at AUD 5.5 billion of work in hand.
Pipeline's grown a little bit to AUD 16.4 billion, but out of that, we've got about AUD 5.5 billion of active tenders, which is up, I think, on the last period that we reported by about AUD 1.5 billion. So very positive, in terms of pipeline outlook, committed work, and obviously, those submitted tenders, which we expect, news flow on relatively soon. The board's declared a final franked dividend of AUD 0.09 per share, giving us a total dividend of AUD 0.155 per share, which is up 11.1% on the PCP. And around a 57% payout ratio, which for a business like ours that's growing strongly and has, you know, strong capital commitments, is an excellent outcome for shareholders.
I'm just gonna hand over to Richard, and he can talk through the earnings and balance sheet, and then we'll talk through about the business units afterwards.
Thanks, Jules. Good morning, everyone. As Jules highlighted, we had strong growth in revenue this year, up 9.2%, and very pleasingly, that growth has been delivered by all three of our operating segments, and particularly strong recoveries in civil and MET. EBITDA for the year was AUD 334.8 million, up 16% from last year. Our operating EBIT result for this year was AUD 195.1 million, and as per our guidance from a few weeks ago, we've included within that an amount of AUD 8.1 million from the sale of the Spartan Resources shares.
We noted that the result, excluding that, would have been AUD 187 million, and as many of you will recall, that exceeds the previous earnings guidance we'd provided by AUD 2 million. That's still a strong 12.5% increase in EBIT over the prior year. The other aspect that speaks to the quality of this year's result is that the margin percentage also improved from FY 2023's 6.2%. At a headline level, the margin in FY 2024 was 6.7%, and net of the Spartan gain, a very solid 6.4%.
We've been highlighting to the market over the course of the past year that we could not only see the potential for growth in the headline numbers, but also growth in the underlying profitability across the operating segments, which these results deliver. As Jules noted, you know, this is a trend that we're continuing, and this is now the third year of consecutive growth in earnings and profitability post-COVID that the group has delivered. Jules will talk further about the specific results of FY 2024's growth, and I won't steal his thunder too much, other than to say that we expect those drivers to continue, and therefore we expect to see further growth in FY 2025. Our results include a net charge from non-recurring transactions of AUD 28.1 million.
This is principally the Wärtsilä settlement and legal costs, and the revaluation of other listed investments, offset against the non-operating element of the Spartan Resources gain on disposal. Interest costs in the year were AUD 18.3 million, fairly consistent with the prior year, and I'll come back to talking about debt in a moment. Income tax expense was AUD 37.7 million, at an effective tax rate of 26.4%. Going forward into FY 2025, we expect that to normalize to the statutory rate of 30%. Finally, normalized NPAT for FY 2024 was up 18.6% at AUD 123.8 million, compared to AUD 104.4 million last year.
I'll turn next to the balance sheet, and one of the many strong points in FY 2024 is the closing cash position, AUD 246.6 million, which, as Jules said, is a 95% cash conversion. Many of you will recall that at the half, our closing cash position was impacted by late receipts of AUD 31 million, and we've effectively had the opposite result at full year. With some amounts that we weren't expecting to be received, actually came in earlier. So it's a very strong cash conversion percentage. And as many of you will know, we talk about a typical range of 80%-90% as being normal. So, you know, this really reflects something that was a pleasant surprise.
Financial debt at year-end totaled AUD 279.8 million, which is comprised of equipment, finance, debt, and debt drawn under bank facilities. Our bank facility component of that number was just under AUD 50 million at AUD 49.6 million. While we're on the topic of debt facilities, you'll see from the notes to our financial statements that we've renegotiated and expanded our corporate debt facilities. We've retained within our debt structure, our long-standing partners, Bankwest, CBA, and Bank of China, who have been with us for many years and supported us at times when our results were nowhere near as good as this. They've been joined by Westpac and NAB, and we've entered into new facility documents with all four banks under a common terms deed, and that gives us an evergreen tenor, materially improved terms and reduced rates.
We've increased our available debt lines from AUD 260 million to AUD 450 million. As I said, only AUD 50 million is drawn. This substantial headroom gives us the flexibility to access funding when we need it, to support a wide range of corporate initiatives. We are very pleased to have the committed support of such a strong group of Tier 1 financing partners. Our net debt position for the year was AUD 78.8 million, slightly lower than in FY 2024, which resulted in a total gearing ratio of 12.1%, or if you exclude the property leases, 5.1%. As I'm sure everyone will acknowledge, that's an exceptionally low level of gearing for a mining services and contracting group, and another factor that sets us apart from our peers.
Property, plant, and equipment increased by a net AUD 63 million in the year. We had additions of just under AUD 193 million, and disposals of just under AUD 69 million. During the year, we spent in total just under AUD 195 million on CapEx, of which AUD 52 million was growth, AUD 64 million was sustaining, and AUD 79 million was maintenance CapEx. This level of CapEx is in a band of AUD 180 million-AUD 200 million that we regard as normal for our group, and we expect CapEx in FY 2025 to be 5%-10% lower than what it was in the current year. Our working capital increased to AUD 25 million. One of the main drivers of this was that we have just under AUD 60 million of advanced payments that we hold at year-end.
These are payments from our clients to fund the working capital on the projects that we build for them, which of course, is a positive, 'cause we're using our clients' money to build their projects, not NRW's money. The reduction in investments reflects the Spartan share sale that I mentioned before, and the mark-to-market revaluation of our other listed investments. Net deferred tax liabilities increased during the year by AUD 8.5 million. There's a number of factors that drive that, but one of the key drivers was the write-off of the Wärtsilä receivable that was carried in Primero's books. At year-end, the group's net asset balance has increased by 7% to AUD 652.6 million. And as I mentioned, gearing very low at 12.1%. Moving on to cash flow.
Net cash flow from operations was broadly consistent with the prior year at AUD 233.5 million. The main change being the just under AUD 30 million of cash tax that we paid during the year, which of course facilitates the resumption of fully franked dividend payments, but also signals that we've utilized our historical tax losses. Investing cash flows were also consistent with normal business-as-usual operations, the only outlier being the proceeds received from the sale of the Spartan shares. Financing activities were also consistent with normal business-as-usual measures. We paid dividends to shareholders during the year of AUD 65.7 million. In cash terms, slightly lower than the prior year, but as everyone will remember, we paid an unfranked dividend in that year.
Finally, as I mentioned, we ended the year with AUD 246.6 million in our accounts and a very healthy closing position. I'll hand you now back to Jules.
Thanks, Richard. The next slide demonstrates in text rather than photos. I think we've used this slide a few times, whether it's been photos or text, but it demonstrates a very important picture. The businesses that we've grown organically, we've acquired over the journey of the last eight years or so, have been instrumental in delivering this result and are gonna be instrumental in terms of delivering the outcomes in FY 25 organically, and into the future.
We have a business model that is incredibly diverse, and incredibly capable of providing a range of services, be it in the civil business, whether it's resources, infrastructure or public infrastructure, whether it's mining, whole of mine services, product manufacturing, drill and blast, or whether it's in the MET division where you have the entire life cycle of a project through design, engineering, procurement, construction, maintenance, and OEM product supply. You know, we have a business in this space like no other, and I think it's demonstrated now. If you look at our results over the last couple of years, irrespective of the commodity fluctuations that have been either in lithium or in iron ore, or in coal, we've continued to see a very buoyant and growing business and pipeline.
So the diversity sort of really sets us apart, and again, whether we show it in pictures or in capability statement with the companies that are operating in those divisions. So that's, that's a very telling picture of our business and our future. If we go over to the, over the page, you can see that we've had significant increases in some of the businesses, particularly not necessarily in top line growth, where we have seen a lot of growth in civil, but more importantly, in margin growth. You know, the civil business last year was probably carrying additional overheads due to us being more diligent around the tenders that we were bidding and the prices that we're putting in for those tenders.
That's now, again, it was as a consequence of COVID, and then hyper escalation, and inflation, and all of the, all the labor challenges we're having at the time. We're now seeing that obviously very much be a more normalized position, stability in the workforce. Costing is more normal, and the activity levels increased significantly from some delayed projects that we're starting to now see come through. So the civil business historically has been much bigger than it currently is, but we're far more diverse today than we were back then when it was a much bigger business. So we have far more clients and far more opportunities to grow that business as we look into 2025 and 2026. And this is not a capital intensive business. This is a business that we can grow, excluding heavy equipment, capital, et cetera.
Mining continues to be a very consistent player, consistent delivery and earnings, and again, we've seen growth in that segment as well. And a big return to significant profit in the MET group, you know, driven by the turnaround in Primero. Still some challenges in RCR, due to the overheads that we've carried in some delayed projects, and that's all about growing our parts and OEM business, and again, I'll touch on that briefly in a moment. But a very positive story. So if we go on to civil, again, without repeating myself, obviously, we had some challenges in FY 2023, really driven by our disciplined approach to how we were pricing things and opportunities. We're now seeing a very different picture at the moment. The tender success rate is very high.
Activity levels are very high, and we'll see that flow through this financial year, and into subsequent financial years as well. So a lot of that's being driven by replacement and sustaining projects in the Pilbara by the iron ore majors. We've got probably out of our tender pool at the moment, we've got at least AUD 1 billion worth of tenders in Pilbara iron ore space at the moment for various customers. So huge amount of activity, and it's not, you know, irrespective of what the price is doing at the moment, you need to, you know, understand that it's replacement and sustaining tons is what's important.
So there's a lot of work to be done on, on assets, on new assets, around sustaining those volumes of iron ore that are being, produced at the moment, and that's driving a lot of this, activity at this point in time. Again, urban, you know, population growth is very strong. The urban business performed very well in Queensland. And again, this year, if you think about our delivery, weather was less of an impact than we had in the prior financial year as well. So we had a pretty good outcome, and improving margins, which is what we flagged to the market, we flagged to our shareholders. But that's our clear focus. Our clear focus is around improving our earnings, not necessarily our top line.
We'll continue to grow pretty strongly, be that organically or by acquisitions, but, you know, we're focused on improving our returns to shareholders. So a decent, healthy order book at the moment in the civil business and a pretty significant active tender pipeline of active tenders, obviously, which are submitted. So it's a strong story. On the mining side, lots of highlights. Obviously, a great performance again from the business during the year. All of our projects performed well across the board, be that in coal, iron ore. Lithium had a few challenges. We did have to scale back a little bit on the Mount Cattlin project, but it hadn't actually scaled up a lot, so we've never seen the full sort of capacity of what the award was out of the tender.
But obviously, it continues to run at the moment. You know, there was some commentary about it potentially being a marginal project, but it is still cash positive, and from what we understand from our client, it's set to continue as well. But it's not a major contributor in the overall scheme of things in the mining business. ADB had a record year. Had a record year in terms of revenue and both EBIT. Very strong performance from that team, and over 60% of that business was derived from external sources, so external clients. We use Action Drill and Blast, obviously internally through Golding and NRW, but it's got a very strong name and a very strong business for its external clients as well. So that was a great contributor.
And the big news later in the year, obviously, which doesn't impact the FY 2024 year but does impact the FY 2025 year, was our acquisition of the HSE business. It's a business we've known well. It was a hire plant plus mining contracting business. This was the last remaining sort of mining services contract they had. We bought incredibly well, we as we do for our acquisitions. So, we're very pleased at the, at the acquisition price that we paid and obviously the outcome on site. You know, we've welcomed another 550 members to our team, which brings us to about 8,000, I think, in terms of total workforce at the moment. And it's a great job. It's close to Mackay.
It's the pick of the bunch in terms of employees wanting to work there, if you look at the Bowen Basin Coal. And, you know, it will contribute AUD 250 million of revenue to our mining business this year. Other than whatever changes out of the current bidding process, which is on foot for the contract extension, which is a five-year extension, so I'll potentially talk about that a bit later. But that, that's something we're involved in at the moment in terms of bidding. So, you know, as we look forward, 90% of the expected revenue is already in the book, subject to bids that are on foot at the moment. Obviously, we'd expect to see that fill reasonably quickly. On to the MET segment. As I said, you know, big, big improvement.
We've already flagged a lot of that improvement at the half. Primero's really bounced back a lot of activity, and that's, that's underpinned by projects like Western Range, KCGM, obviously, and the work we've done for Pilbara Minerals, as well as the 480 and the 680 projects as well. So that's been performing exceptionally well. Very happy with the team and the opportunities they have in front of them as well at the moment. As I said earlier on, talking about the divisions and the capability we have in our business now, we really stand apart from a lot of our competitors in terms of what we can offer across, you know, that engineering, that design, our experience in, you know, whether it's hydroxide plants or, or concentrators in lithium.
You know, we're working for Spartan in gold, so it's a very transferable skill set, very competent people that we have in that business, and that's really the future of the group, in terms of how we look forward and some of the really exciting things that are happening in there. RCR, a little disappointing because of overheads that were put in to grow the product support business, but that will come back to us in the next couple of years, and we will double the size of that parts business, and it's a high-margin business. So again, focusing on margin, we've had to deal with a little bit of short-term pain, but that business will absolutely really fire in the coming years.
The other thing that we're doing in the MET business is, you know, we've got an innovation hub which has been developing new products, sorry. The apron feeder, which is the number one used apron feeder across all the majors around the world, resource companies, has been modified to become a sealed pan feeder , which significantly reduces the overall capital cost to the clients. It's a fantastic product, and we've had excellent take-up on it so far from when it's been released, which is only, you know, a matter of six months or so. We'll be showcasing that at the MINExpo in the U.S. later this year as well, which will be the first time RCR has ever taken any products internationally.
So again, you know, our OEM products business, I think is in for a very bright future, too. And there's other initiatives that were underway. I just mentioned one of them there, but whether it's in-pit electrification through our OFI business, whether it's working on lithium refining technologies that the process team in Primero are working on too, or whether it's just continuing on with its business as usual, could be NPI, could be build-own-operate crushing plants, processing, maintenance work, shutdown. You know, it's a very diverse business, and obviously, as you can tell from the current order book of AUD 1.3 billion and the active tenders and pipeline, I mean, active tenders is another AUD 1 billion. So, very strong opportunities in front of that business as well.
If we go to the sustainability highlights, there's a couple of things I'd touch on, probably on the main page there. Obviously, we continue our core focus on reducing the group's carbon footprint through various initiatives that we've got around the group. I mentioned on the social side of things that we've now got a workforce of around 8,000. That's obviously after we welcome the HSE employees into the group. But importantly, we're seeing significant change in sort of turnover rates. It's dropping quite dramatically. We're seeing a lot of people come to us, come to our group to wanna work for our group as well. So yeah, really important statistic and a very pleasing one, given the challenges we've had ever since we've had sort of COVID and the consequence thereafter.
Another very pleasing outcome is our diversity in our workforce. You know, we're continuing to increase our female participation, and obviously, that's a continued focus for us, as is the opportunities for apprentices and graduates, and trainees, and training our leadership as well. So lots of things, you know, the way the business is moving quickly, we need to continue to train our leadership and look after our people better than anyone else. So lots of good things happening inside the business. On a governance side, probably just make the point that we've established, given the size of the business and the type of things that we do, a standalone risk management committee. It used to be part of an audit and risk committee. It's now a standalone.
We have appointed two new board members this year, and one of those board members, Adrian, is chairing the risk committee, which again, is another important things in terms of our overall risk management and governance. So that leads us on to the outlook. Outlook, as I've said through this presentation, incredibly positive, very diverse business model, and lots of opportunities in front of it. Again, as Richard touched on too, I mean, you know, having the position we're in at the moment, having to renegotiate our debt facilities and see that improvement in available debt lines for any corporate initiatives that we have in the future is incredibly important as well.
So we certainly have the firepower to be able to do things, as and when we want to do them in the best interests of our, shareholders. So guidance is, as you know, AUD 3.1 billion for the full year. Earnings for 2025, expected to be between around 205 to 215 million, and the other measures obviously being in, in line with long-term, expectations. So I think that about covers everything. So we'll go to questions now. Thank you.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question.
... The first question comes from Evan Karatzas from UBS. Please go ahead.
Brilliant. Thanks. Okay, brilliant. Hopefully you can hear me okay. Just picking up on that last one, within the FY 2025 earnings guidance, can you just provide what your assumption is for the contribution of earnings from the HSE acquisition? I'm just trying to get an idea of, I guess, what your growth expectations are for the base business in FY 2025. And then also, what have you put into the mining order book for HSE through the AUD 250 million of revenue?
Yes, yes. Only that, and we've only assumed the current returns from that project, which are below the current average for the business. So if you look at the overall mining margin, we've just assumed a lower return at this point in time.
Right. So-
There is-
Okay.
For the only year, obviously, we've picked it up. We've got one year to go till the end of August 2025, which was the 250. The new contract is obviously a different,
Yeah
... a different beast.
Okay, so you said we can't get a specific number out of you in terms of what-
No
The guidance assumes? Okay, fair enough.
No, well, look, it's not in-
Fair enough
... It's not including any change to a success in a new contract.
So the new contract-
Okay, yep
... would potentially be upside for-
Yeah
for these numbers, Evan.
Yeah. Okay. All right, fair enough. And then just the-
So the guidance-
Sorry. Yep. No, that's fair enough. And just on the one billion live tenders out there for iron ore civils, the comment you made there. I mean, I'm assuming most of that work would be sustaining type, tons type of work. I mean, is that correct, firstly? And then secondly, the ECI work you're doing on those replacement tons, can you give any feel for the typical timing of that, where it moves from, I guess, ECI to contract award or to submitted tender, at least? Sort of any, yeah, any additional input there?
It's probably starting on the ground from January 2025, the stuff that'll be earlier. So there's some sustaining work that's obviously flowing through, as you've seen, you know, the sort of civil business awards come through. That will continue to flow through first half, and then the bigger stuff into second half of 2025, delivery into 2026. So, you know, we're talking about a multi-year opportunity, you know, between all of the things that are happening and sustaining across the majors' portfolios at the moment.
Yeah. Got it. Okay. So the bigger stuff is, is the replacement tons, is what you're sort of referring to there?
Yes, but I mean, the other packages aren't that small. I mean, I think, you know, when we talked about sustaining tons previously, you know, they had been smaller packages. They're getting increasingly bigger, but the larger stuff is more towards early in the calendar year.
Yeah. Okay. All right, so a good point there. Okay.
In terms of construction.
Thanks.
In terms of construction. So, you know, obviously, news flow could happen any time before then or-
Yeah. Yep, yep, yep. No, good. That's, appreciate that. That's, that's great. Thanks.
Thanks, Evan.
Thank you. Your next question comes from Jakob Cakarnis , from Jarden. Please go ahead.
Can I just talk through the guidance, please, for FY 25? Using the AUD 3.1 billion of revenue and the EBITDA guidance range that you've given us, it looks as though margins are forecast to expand between 20 and 50 basis points into 25. Can you just talk us through some of the elements, be it contract or earnings mix, but also some of the components of the operating environment that you've included in the guidance, please?
Look, that's a big, big thing to unpack. I mean, there's lots of things obviously driving that, and we have said we were absolutely focusing on bottom line improvement, and there's been sort of, you know, the lull in civil activity with a larger overhead. We've still had some, you know, legacy overhang in RCR that's kinda not gonna be there. So once you kinda normalize all that stuff and have full year contribution, net-net, we've been talking about it long enough, you're gonna see margin expansion, you know, if you're able to pass those costs on. We had that period of time during COVID and just after COVID, where, you know, no one wanted to pay for anything, and then all of a sudden, your costs have gone up.
We're bidding work, we're losing work because we're not the lowest bid, you know, the right discipline. But I think you're now seeing that flow through. So mining's relatively consistent. The only change might be in a new bid because of the change in nature of, say, the South Walker Creek versus what we bought. MET is continuing to improve strong activity levels. RCR is the only thing that's let it down a little bit, you know, they've performed very well. So when you add all those things up together, it equals much better outcome. And if you go back pre-COVID, you know, margins are pretty good. So you got to just wipe the last four years almost, and go, "Well, that wasn't normal." Now we've got a business that's very different to four or five years ago. It's far more diversified.
We've got far more opportunity in different areas and to be sole sourced because of the type of business that we have. You know, we don't need to offer vertical delivery for a client. We can do, you know, one-stop-shop. We can do earthworks, concrete, you know, design the plant, build the plant, do the whole thing. So, you know, if the activity levels are high, which they are, that in turn is really kind of the environment that we are in at the moment, and our diversified business model will do well as a result of it.
Yeah, thanks for that, Joel. It does look as though the outlook's significantly better maybe than what even we were expecting. Just on that MET business, you highlighted it, with some drag still from RCR, but it looked like it got back to 6% EBIT margin through the second half of 2024. Do we think that that's now the level that we roll forward from? Or can that continue to improve as well in 2025, balancing out DIAB and RCR?
In theory, it should continue to improve. One caveat to that is the contribution of Fimiston and the structure of that contract in terms of its target cost estimate and how much margin we're recognizing on it, given its level of completeness, which we wouldn't obviously take anything more up until we're more advanced in terms of the project. So that's something to bear in mind. But in theory, yes, if everything's going okay, if all the business units are busy, there's no overhang, it should continue to improve. I think what we added in pre-Primero is over 10% margin. Once we added Primero in, given the scale, it went back to about seven-ish.
It's then not had a couple of tough challenges, obviously the Primero business and us having to remove the founders and management in there and, and sort it out. But now it's obviously back to kind of strength. So there's a couple of variables you just have to think about, but you'd be right longer term.
Thanks, Jules. Yeah, I was wondering if you were gonna mention Fimiston, so thank you for cutting me off there. Just two very quickly for Rich. Is it the right way to go forward to double the net interest expense from the second half of 2024? Can you just give us a sense of how that looks into 2025, please?
Yeah, I think, I think that's a fairly, fairly sort of safe assumption. So overall, we expect to be, you know, very similar in interest in, in FY 25 to, to, to what we were, in that, in that second half.
Thanks for that. And then, I mean, one for, for both of you. How are you thinking about the balance sheet here? Obviously, you've got significant firepower in the new bank facilities that you've got. I mean, is there any contemplation or discussion with the board about what an acceptable capital management framework is, for example? Or is the strategy near term to reinvest back in the business because you guys think you can generate a higher return?
Absolutely. I think the latter. You know, we, we are... You know, the environment we're in at the moment, and obviously, the position that we have in terms of funding facilities, those, you know, opportunities present every day, they're not necessarily the right opportunities. And I think, and that's organic growth, not necessarily focusing on acquisitions. We're focusing on organic growth, given, you know, the opportunities we have within the business. So I think, I think that's the, the short-term sensible plan.
Yeah. And to add to that point, you know, the growth that we're forecasting into FY 25 does not rely on acquisitions. That is purely organic, and it's really, it's, it's really capitalizing on the latent potential that we have at, within each of our operating segments.
Thanks, guys. I'll hand it over.
Thanks, James.
Thanks.
Thank you. The next question comes from Gavin Allen, from Euroz Hartleys. Please go ahead.
Gents, very nice results. Well done. Just a couple from me. So, look, tendering levels increased from first half 2024 from AUD 2.6 billion-AUD 5.5 billion at the full year, which I thought was a really positive indication of demand. Just wondering, the increase looks to be across the business. Just wondering if that's a function of the timing of things in the normal course, or did you or are you seeing an increase in urgency around the place? Bit of flavor on that, perhaps, gents.
Look, I think, Gav, yeah, mining is driven by a couple of opportunities, in gold, obviously, other than the one that we acquired, and there's an opportunity there as well. So that's kind of circumstance, I suppose, as in terms of the East Coast opportunity. But the others are really, just a big pipeline of civil and met-related. So it's mostly, you know, large mine site, infrastructure-related opportunities. There is public infrastructure works, of course, and other things as well, but the bulk of it is driven by, resource projects for the iron ore majors.
Yeah, absolutely. And just another one. We did talk, during the call about sustaining capital, and that was what drove some of that tendering increase. Just thinking out loud about, you know, what's next. You know, with a 3-5-year view, you know, projects such as Rhodes Ridge, these sorts of things with Rio, maybe a bit of flavor on how you guys are thinking about the medium term in iron ore that perhaps us on the ground don't get to sort of see, not being in the trenches with you.
Well, it's as positive as I've seen it. And I think, you know, the point is that everyone needs to remember it is replacement/sustaining tons. It's not growth. Rhodes Ridge is a massive growth project. It's the future of Rio's business, so they have to do it. It's the most profitable commodity in the group. They have to do it, irrespective of if the iron ore price is $80 or $100, $110. And I think that's important for us as a percentage. At the moment, I think we went from FY 2023, 9% iron ore, to we've gone to 20, what did we go to? 19%.
So if you think about the size of the business, it used to be, you know, a much larger contributor in the past, but now, it's, it's relevant, but not as relevant as it was. As we go forward, there's obviously a lot of opportunities, a lot of opportunities to grow that civil business and the MET business through NPI, build, own, operate, you know, mine site works, crushing plants, all the, all the rest of it. So the pipeline across West Angelas, Hope Downs, yeah, Jimblebar-
Brockman and Nammuldi.
Brockman, Nammuldi.
Yeah.
All the mines are getting significant expansions. And, yeah, Rio, I watched an interview with the Jakob Stausholm, you know, the CEO the other day, which was-
Yeah
... actually very interesting in terms of their growth plans for the Pilbara, which obviously backs up what you guys would think and what we're telling you, and we're involved-
Yep
At an ECI level or a very early level in all of that work. We're not excluded from it. We're a preferred partner or a key partner that we have regular meetings with the absolute highest, the decision makers in the organization to strategize how this is gonna get delivered.
Yep.
Very good, guys. Thanks for that. That's enough from me. Well done. End it all.
Thank you.
Thank you.
Thank you. Your next question comes from Nicholas Rawlinson from Morgans. Please go ahead.
Hi, Jules and Richard. Congrats on the result, and thanks for taking my questions. Just following on from Evan's question on the iron ore work, could you give us a bit of an idea of the potential contract value to some of the larger work packages?
Oh, that, that's like, you know, on the string, you could be in the AUD hundreds of millions, or you could be, you know, AUD 100 million, or you, you know, the sustaining stuff's AUD 30 million-AUD 100 million, and you have slightly larger stuff's AUD 100 million-AUD 200 million, and you've got AUD 300 million+ opportunities out there. So it's a bit, it's a bit varied across the businesses.
But it's a good portfolio of project opportunities, and that's really what we like. You know, we would, as I've said to many of you, we'd always prefer to have a portfolio of, you know, 20 AUD 20 million jobs than one AUD 400 million job. And it's really on those smaller scopes, you know, the sort of 50 to 100s that NRW historically has always performed exceptionally well. And there's a very, very good mix of project size in the opportunities that we can see coming through, Nick.
Awesome. Thanks for that color. Civil had a very strong second half. I think EBIT margins were around 5%. Should we expect to see that as sort of the go-forward margin in Civil?
I expect to see it. Or better, you know, we're. It's been a long road back through things largely out of our control, which people need to remember. I know that sometimes investors can be very short-term kind of focused, but, you know, we've been through a lot with COVID and post-COVID and, labor challenges, as many businesses have. It has been a big focus of ours, and those margins should be north of 5%.
Yeah. So even if you're doing more of the iron ore work and I guess relatively less of the public infrastructure, you still see your margins going up? 'Cause I guess my concern was just that margins felt a little bit lower in the iron ore stuff, but is that not necessarily the case?
No-
No, not at this point. And as I said before, you know, when we were bidding in 2023 and whatever, we were losing work because I told the guys, "Put the prices up. Make sure you got the right cost base in. We understand what it's costing us. We understand what the turnover levels are of our teams on site. Price it properly." We missed out on Western Range job, won the CPB. We were 10% out. CPB are in a fight with bloody Rio Tinto for AUD 100 million. So if they paid us our extra 10%, which was worth AUD 226 million, they might have avoided a AUD 100 million dollar fight. And this is the stupidity sometimes of, you know, this lowest bid thing, which is obviously where we were. We're in a competitive bid.
But this program of works, given, you know, it's not a huge field of contractors, will be delivered more sensibly, and that should preserve and protect our margins and improve them.
Awesome. Thanks, Jules. Just the last one from me. That SIMEC mining contract's coming up for renewal in FY 25. Have you already bid on the extension or have you been having conversations with the customer around extension?
Yes. Yes. I mean, we've extended several times, I think, since we've owned it, when we bought BGC. So that will... Yeah, that will continue on in due course. I think it's due to expire in January or something, the end of January. So yeah, those negotiations or those conversations are underway.
Awesome. That's it for me. Thanks, guys.
Thanks, Nick.
Thanks, Nick.
Thank you. Your next question comes from Matthew Chen from Bell Potter. Please go ahead.
Morning, Jules and Richard. Just wanted to clarify the CapEx into next year, and I guess that's part of your strategy, trying to get clients to pay for equipment?
Matt, sorry, sorry, getting clients to pay for equipment?
Yeah.
It's more about. It's really more about clients funding the, you know, the working capital costs on their projects. That's really what I was referring to in terms of advanced payments.
Yeah, okay.
The CapEx profile we expect to come down marginally in FY 25, just based on, purely on what we can see in the forward order book and the timing of that, Matt. We don't have any major new projects, mining projects commencing in FY 25. As you'll know, historically, that has always been a big driver of CapEx growth when we have a new mining contract starting. So our contracts this year are all you know, awards from prior years that are just rolling on. So it's a fairly you know, business as usual sort of CapEx profile.
Right. That's, that's very helpful. And obviously subject to not winning kind of any new work there in your active tender book?
... Well, even if we do win it, you won't be mobilizing for, you know, the best part of, you know, 10-12 months anyway.
Okay.
So, it won't affect FY 25.
Thanks. Just maybe a brief comment on weather so far in the fiscal year to date?
So far, so good. We haven't had any major impacts at all. You know, there's obviously been, you know, some fairly significant rain events, but it hasn't impacted our operations to any great extent.
Great. Just lastly, a bit more color, if you could, on the corporate initiatives that you want to facilitate.
W- well-
Well, that's for us to know and you guys to find out when we tell you.
Can't give the game away, Matt.
Okay, thanks.
As we've talked about organically, there's lots of opportunities within the business in terms of what we're doing. And, you know, it's not necessarily an acquisition war chest. It's, you know, there's lots of opportunities to do things internally within the business as well. So we just have to, you know, we're just demonstrating that we have a much better capability at a lower cost, given the negotiations that Richard and his team have done with our group of banks, and it's a very good outcome.
Yeah, that's helpful. 'Cause I mean, appreciate you've got a pretty complete suite in terms of end-to-end capability, but just kind of thinking about what might be missing in terms of, capability, or is it geography?
Look, there's not a lot missing in terms of capability. You know, the HSE acquisition is opportunistic. It's, you know, and that's the kind of thing we would do something like that if it's very cheap, you know, if we think it's great value and it's gonna add value to the business, and it's more of the same, then we do those kind of things. Obviously, that was a, you know, AUD 85 million acquisition, but, you know, at a very good price. Or there'll be other things that are strategically important. And geographically, we've got pretty good spread across our business and obviously a lot of pipeline and submitted tenders waiting for growth.
It's not an urgent thing for us to kinda look further afield at this point in time.
And as Jules noted before, you know, there's a lot of clever initiatives underway within each of the businesses. You know, give you an example, we're actually looking at developing some of our own hybrid mining equipment, you know, which not only has a benefit in terms of our, you know, ESG credentials, but more significantly, has a benefit for us from a cost perspective. So there's a bunch of things, you know, that are of that sort of nature. You know, we've got a bunch of very, very talented people within our group, and, you know, we wanna support the good ideas that our people come up with.
So, you know, there are initiatives of that nature that we are investing in as well, where we think that there could be a, you know, a good return for the business overall. So it's not only about acquisitions.
That's really helpful. Thanks for your time and comments.
Okay. Thanks, Matt.
Thank you. Your next question comes from William Park, from Citi. Please go ahead.
Hi. Thanks, Jules and Richard, for taking my question. Most of my questions are answered, but just two quick ones, if I could. Can we get some sense around whether there's been any change in customer expectations around pricing and risk allocation? Just wondering whether that has contributed to uplift in pipeline that you're currently looking at.
You're not super clear, Will, but... No, look, I don't think, you know, that our normal contract model for larger projects are sort of schedule of rates , you know, fixed and variable type sort of structures. Obviously, the Thornlie-Cockburn job, because of the size of it, there was a lot of risk-sharing done in terms of more risk to the client rather than the contractor, which would be more normal. So, you know, those contract structures, as far as us being involved in ECIs at the moment, they're sole sourced, so they could be sole sourced in terms of, you know, contract opportunities to us as well. So I think that's a function of preferred partners and a delivery model that wants a certain outcome.
So I think that part of us, environment's improving, and in public infrastructure works, it's still a mix between alliance-style projects and lump sum. So I don't, you know, most of the things are still the same as you would have seen in the last 12 or so months.
Thank you. And the last question I had was based on your comment that the tender success rate is tracking higher. Can we get a sense as to how much this has improved over the last two, three to four years? Is it just a base of you seeing less competitors when it comes to bidding for a project? Or is it just NRW winning these projects on capabilities and so forth? Just, just-
It, it-
want your thoughts on it.
Look, it's more a MET civil-driven improvement. Mining's, you know, still relatively competitive. You've obviously still got Thiess, you've got Macmahon and and others in those, in that kind of smaller end mining project. On the East Coast, less competitive, but we're not pricing a lot. Obviously, there's only the South Walker Creek opportunity at the minute. But it's the civil and met, where it's a combination of clients wanting us but it's not a highly competitive space in terms of other players, and obviously, we are the, probably the most longest established and capable provider of those services. And ultimately, you know, price is important.
Yeah. And look, I think the other thing as well, Will, is that, you know, we are very selective in what we tender. So we only tender the jobs where we think we're gonna get an appropriate rate of return, and we're not interested in tendering something just because it, you know, it comes in the mail. So we look very carefully at, you know, the client, the project, the T's and C's, the complexity of the job, to make sure that it's something that's relevant to us. So consequently, our tender success rate goes up because we're very choosy about what we, you know, decide to devote effort to tendering.
So you know, that I think is just a by-product of the selectivity and the screening process that we go through before we commit any of our tender budget, you know, to opportunities that land before us.
Thanks very much. That's all I have.
Thanks, Will.
Thanks, Will.
Thank you. Once again, if you wish to ask a question, please press star one. Your next question comes from Richard Amling from CLSA. Please go ahead.
Hi, good afternoon, guys. Just a quick question on dividend payout. What we should expect, is the board sort of thinking a payout ratio, or is it, you know, looking at progressive dividend increases? Just can you give a bit of guidance around that one?
Look, I think we're at a... Obviously, we've increased on PCP, and we've continued to do it on the basis of the performance of the business, and that's obviously what the driver will be. As I mentioned at the outset, we do have a lot of opportunities to deploy capital into areas. But it'll be subject to the performance on the business. We outperform, dividends will continue to improve.
Okay, that's fine. And we've spoken about iron ore through the call, but we haven't really touched much, aside from HSE, on the coal sector. Is everything there pretty benign, or is there anything that you wish to comment regarding the coal?
The operations are going very well across the board, really. I mean, all, all of our projects are performing well. As I said, I think the, the retention and attraction of people wanting to come and work for Golding is... You know, I had a conversation with my, the leaders over there the other day, and they were having a lot of inbound from others, competitors, wanting to come and work for us. So I think, you know, that's a really good, good sign. But activity levels there are strong. What we've generally been very disciplined about, obviously, is deploying capital there. We did buy HSE, but because it was a very, you know-
Well, well-priced deal.
Well-priced deal. Other than that, we're quite disciplined in terms of what capital, physical capital, we deploy into those opportunities. It, you know, continues to perform very well for us.
The historic slide around commodity exposure didn't make it into this year's slide deck. Is there anything you can give us in terms of, you know, the mining business in particular, just where the commodity exposure's sat for the FY 2024 year?
Probably not a lot different.
No, it'd be pretty, pretty consistent, Richard, with-
Mm-hmm
... with,
Okay
... what we would have published at the half. But no, no dramatic changes at all.
Okay. Thank you. That's it for me.
Okay.
All right. Thanks.
Thanks, Richard.
Thank you. Your next question comes from Cameron Bell, from Canaccord Genuity. Please go ahead.
Good day, guys. Just the one question from me. Just wondering what the, the timing of the Stanmore contract extension could be?
Well, it's bid, it's bid at the moment. I mean, the new contract, you know, we're contracted until the end of August, but it's being bid at the moment. So decision could be this half. Don't know.
Okay. Thanks. Thanks, guys. Well done.
Thanks, Cameron. Thank you.
Thank you. There are no further questions at this time. I'll now head back to Jules Pemberton for closing remarks.
Okay. Well, thanks very much to everyone for joining us on the call today, and I look forward to seeing, obviously, quite a few people next week on our roadshow on the East Coast. Thanks very much.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.