Waste management company, Bingo Industries Limited (ASX: BIN) is on track to achieve its revised FY19 EBITDA guidance. The has made significant strategic progress in the recent past which includes the significant acquisition of Dial a Dump Industries.
On 1 May 2019, Bingo Industries released a presentation of its Macquarie Australia Conference in which it has provided an update on its Dial a Dump acquisition, Network redevelopment program and 5-year strategy and market update.
BIN’s shares were up by 5.341% during the intraday trade as on 1 May 2019.
In its presentation, the company provided an update on Dial a Dump Industries (DADI) acquisition which was completed in 2019 March. DADI is a fully integrated recycling and waste management services provider in New South Wales whose acquisition was a catalyst for Bingo’s announced network reconfiguration in NSW, to enhance operational efficiency of Bingo’s network of strategic waste infrastructure assets. It is expected that it will take around two years to fully integrate the two businesses.
The acquisition increased Bingo’s ability to compete against multinational, operators in C&I collections through securing C&I post collections recycling and disposal assets. Moreover, the acquisition has diversified Bingo’s product offering with the expansion of processing capability into timber shredding, brick and concrete crushing, scrap steel recycling, garden organics and contaminated soils in the Sydney market.
The acquisition of DADI has shifted Bingo’s post-collections and recycled revenue contribution from 47% to approximately 70% of group revenue. The acquisition has also provided space for Bingo to reconfigure its network, moving towards integrated recycling and disposal precincts serviced by a number of transfer stations
In the presentation, the company also provided an update on its network reconfiguration which is expected to reduce the capital program by approximately $25 million and will deliver enhanced operational efficiencies.
Due to the network reconfiguration and acquisition of DADI, Bingo’s network capacity (RRC and landfill) will expand to 4.7 million tonnes per annum by FY 2020.
While providing the market update, the company informed that its underlying business is on track to achieve its revised FY19 EBITDA guidance. Further, the company also informed about the headwinds in multi-dwelling residential construction which are continuing in the second half of FY19 and are expected to continue throughout FY20. Reduction in total construction volume in this area is expected to be partially offset in the near term by work in hand secured from infrastructure projects.
Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $1.775, up by 5.341% during the day’s trade with a market capitalisation of ~$1.11 billion as on 1 May 2019. The stock has provided a year till date return of -7.67% & also posted returns of -30.37%, -18.20% & 10.13% over the past six months, three & one-month period respectively. It had a 52-week high price of $3.270 and touched 52 weeks low of $1.170, with an average volume of ~ 7,025,144.
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