Like many companies, 2020 has been a rocky year for NRW Holdings Ltd [ASX:NWH].
They started the year on a tear, with the NWH share price climbing to around $3.40 per share at one point. Putting them in a position that looked set to achieve a new all-time high.
But then, the pandemic hit.
And just like the rest of the market, their shares plummeted.
NRW was stuck in awkward position. Left hanging as plans for infrastructure were put into a state of limbo thanks to COVID-19.
However, by May, with a strong performance update, NRW looked to be OK. Detailing record revenues and an incredible result year-to-date. News of which sent the share price soaring higher.
But since then, the stock has slipped back into a fairly neutral position. Trading sideways for the most part in the past month or so.
Thankfully though, they’re still garnering interest for new projects. Like the announcement that they shared today, which has sent shares 8.65% higher in trading today…
Highway to success
The announcement relates to a major road project in WA. Known simply as the Bunbury Outer Ring Road, which will link up two existing highways to ease congestion.
As NRW reveals, the Southwest Connex Alliance (SCA) has been named as the ‘preferred proponent’ for the build. An alliance in which NRW Contracting is a 40% partner: with other stakeholders including Acciona, MACA, AECOM and Aurecon.
Point is, the ball is now firmly in the SCA’s court. With negotiations set to formally commence before a final contract will be awarded.
In other words, all they have to do is settle on the details. A process that may take some time as this is set to be an $852 million, three and a half year long build.
Needless to say though, it is exactly the kind of project that NRW needs. As their CEO, Jules Pemberton commented:
‘I am delighted that the Southwest Connex Alliance has been named as the Preferred Proponent of the Bunbury Outer Ring Road project. This announcement marks a significant milestone in NRW’s strategic evolution to an Australian Tier 1 contractor status and specifically our desire to build a large delivery capability across the Government Infrastructure works sector.’
Indeed, for NRW they will no doubt be hoping this is just the first project of many to come. Because as the prime minister has made clear recently, infrastructure will play an important part in our economic recovery. Devoting billions to projects both planned and unplanned.
There is no doubt that NRW will be vying to play a part in these developments. Whether or not they will be able to win any contracts though will remain to be seen.
For now though, this Bunbury project is a good place to start on their long road towards success.
Infrastructure boom to lift land values
Taking a step back, this infrastructure boom will also be huge for the property market.
Because while things may be quiet right now, new developments always breathe new life into select areas. It simply depends on the scope and scale of the builds in question.
So, while everyone may be wary of investing in property right now, that may have it all wrong.
There is a chance we may see a far quicker bounce back than many expect. Driven largely by the government’s willingness to splurge on new infrastructure, among other things.
Don’t take my word for it though.
You owe it to yourself to give it a read. Because if the infrastructure boom is truly on its way, then now may be a great time to get invested in property.
For Profit Watch