AUS
NZ
UK
CA
USA
IND
On 29 November 2018, Australian Competition and Consumer Commission (ACCC) released a statement of issues in which it has raised its concerns about Bingo Industries Limitedâs (ASX:BIN) proposed acquisition of Dial-a-Dump. Following the release of this news, the share price of Bingo decreased by about 6.2 percent as on 29 November 2018 (1:30 PM AEST).
Bingo Industries and Dial-a-Dump, both are the suppliers of building and demolition (B&D) waste collection and processing services; and as per ACCC Chair Rod Sims, ACCC is concerned about the effect of the proposed acquisition in relation to processing, landfill, and collections.
After the acquisition, Bingo will most likely become the largest B&D waste collector and processor. Further, the company will also become the owner of large number of landfills in Sydney. ACCC believes that the acquisition will remove future competition between Bingo Industry Ltd.âs and Dial-a-Dumpâs dry landfills, which could result in higher gate fees.
According to Mr. Sims, the competition between Sydney landfills could get more intense after the introduction of the Queensland landfill levy, which could result in making the transporting waste to Queensland more expensive. Interested parties can send their submission on the statement of issues to ACCC by 13 December 2018.
Soon after the ACCC raised its concerns, Bingo Industries released a statement acknowledging the ACCCâs statement of issues and disclosed that it has worked closely with the ACCC over the past few months and will continue to collaborate with it to address any competition concerns.
As per the Managing Director and Chief Executive Officer of BINGO, Mr. Daniel Tartak, the management of the company strongly disagrees with the preliminary competition concerns raised in the ACCCâs statement of issues. The management of the company believes that the acquisition will not substantially decrease the competition in the Greater Sydney market. The company has provided ACCC an extensive data set, supported by a number of industry-leading experts, to demonstrate the effect of acquisition. Bingo will still continue working with ACCC in the lead-up to their final decision on 21 February 2019.
In FY 2018, BINGO delivered a 92% increase in statutory net profit after tax (NPAT) of $38 million as compared to the previous year. Further, the net revenue of the company increased by 45 percent to $304 million. The pro forma EBITDA of the company increased by 46 percent to $94 million in FY 2018, delivering a group EBITDA margin of 31 percent.
The company is currently operating 17 resource recovery centres and 254 trucks across New South Wales and Victoria. In the month of August, the company launched its new Vision âPushing for a waste-free Australiaâ which is in line with the developments in the waste industry and government waste management policy. During FY 2018, Bingo acquired National Recycling Group and made a significant investment in key personnel to support its growth and geographic expansion.
In the last six months, the share price of the company decreased by 13.06 percent as on 28 November 2018. BINâs shares traded at $2.130 with a market capitalization of circa $1.32 billion as on 29 November 2018 (AEST 1:30 PM).
Disclaimer
This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.
