Environmental Group Limited (ASX: EGL) announced the appointment of Managing Director & provided market update on its business verticals. The announcement read that Mr Dean Dowie has been appointed as Managing Director, effectively 1 July 2019.
EGL reported that Mr Dowie would emphasise on the integration of business unit operations to maximise resources, developing markets in addition of executing appropriate acquisition opportunities. Furthermore, his previous role as Chair of the Audit & Risk Committee would reportedly be filled by Mr David Cartney, an independent director.
Mr Dowie holds more than 20 years of experience in driving growth for many market sectors within Water, Environmental and Energy markets and held Senior roles based in London and Paris. He has been a director of EGL since May 2017 and held the role of acting CEO between February and May 2017. Mr Dowie is an MBA graduate from La Trobe University and has studied Corporate Strategy at Harvard Business School. Along with these qualifications he is a graduate of the Australian Institute of Company Directors. In the recent past, he held the position of CEO with one of the world’s largest environment management companies.
As advised earlier at the AGM, the full year 2019 results are expected to be below 2018 results with an expectation of reaching higher levels in 2020. Due to the global tightening in the gas turbine market, core business opportunities for Baltec IES are on a downtrend. The decline has further resulted in escalated competition and reduced margins. The management of Baltec have implemented various strategic initiatives to diversify the revenue base through tapping new markets, escalating focus on repairs, maintaining after-market sales.
Tomlinson Energy Services continue to deliver solid performances considering the circumstances arising from the RCR Tomlinson administration process. All the stakeholders have shown strong support for this new business. However, due to some months of slow activity during administration, it has impacted the result of Tomlinson Energy Services. The service division continues to be in line with expectations and EGL expects the positive reversal in results in the first half of the 2020 financial year.
RCR Energy Service business (Source: Company’s Investor Presentation, Feb 2019)
In March, EGL’s Total Air Pollution Control (TAPC) division won a major contract in Western Australia. It is reported that benefits from this contract would be realised partially in 2019 and largely in 2020. EGL anticipates delivering better results for this entity in the 2020 financial year on the back of escalated business development opportunities resulting in the stronger pipeline.
EGL provides services for the protection of the environment to improve the quality of air, water, reduce carbon emissions and energy production from waste. Its four business units include Total Air Pollution Control (TAPC), Baltec IES, Tomlinson Energy Services and EGL Water. Total Air Pollution Control (TAPC) deals in services to enhance air pollution control. Baltec IES manufactures parts for gas turbines used in renewable energy production. Tomlinson Energy Services converts bio/waste to energy platform and EGL Water continues to develop patented technologies in collaboration with Victoria University.
On 22 May 2019, stock of the company is trading flat (12:58 PM AEST). EGL last traded at A$0.049 with the price to earnings multiple of 19.600x. Over the past 12 months, the stock has gone up by 22.5% with 40% increase recorded in the past six months.
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