What fuelled Bingo’s (ASX:BIN) strong first half results

 Summary

  • Bingo Industries Ltd (ASX:BIN) witnessed robust earnings in the first half of FY21 despite challenging market conditions.     
  • Bingo said that the coronavirus pandemic’s impact on its operations was lesser than  anticipated.
  • The company’s board maintained its last year interim dividend with a record date of 2 March 2021 and payment date of 31 March 2021.

Bingo Industries Ltd (ASX:BIN) on Monday announced robust earnings in the first half of FY21 despite challenging market conditions triggered by the coronavirus pandemic. The company reported underlying earnings before interest, depreciation and ammortisation (EBITDA) of A$65.2 million and strong cash conversion of 98.5 per cent during the given period. The half-yearly financial performance was slightly ahead of budget. 

Image Source: © Wutzkoh | Megapixl.com

Bingo said that the coronavirus pandemic had lesser impact on its operations than what was originally anticipated and its key markets were on track to recover ahead of schedule. The disciplined capital management with continued strong cash conversion generated robust cash flow across CY2020. The company recorded a reduction in net debt from A$321.1 million to A$317.4 million over the past 12 months.

Revenue, EBITDA dip

The revenue was down by 3.1 per cent to A$241.1 million against the corresponding period of last year. The underlying EBITDA declined by 20.5 per cent over the pcp to hit $65.2 million. The underlying EBITDA margin of 27 per cent was down 600 bps against the same period of last year. The underlying net profit after tax (NPAT) was down to A$16.7 million as against A$28.4 million in the prior corresponding period.

Dividend

Bingo’s board maintained an interim dividend of 1.5 cents, with a record date of 2 March 2021 and payment date of 31 March 2021.

Image Source: © Cmmeraydave | Megapixl.com

Company commentary

Commenting on the earnings update, Bingo’s Managing Director and Chief Executive Officer, Daniel Tartak, said that the company delivered strong results despite challenging conditions due to its five-year strategy of weighting the business towards defensive infrastructure assets. He also highlighted how 85  per cent of the Group’s earnings had come from the post-collections operations.   

Outlook

Bingo expects Group EBITDA margin to fall in FY21 by nearly 200-300 bps, before rebounding to its longer-term target of 30 per cent. The volume has been maintained at higher levels and pricing has stabilised but still remains below the pre-coronavirus levels.

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Stock performance

Shares of Bingo closed at A$3.19, down 0.030 points, or 0.93 per cent on Friday, 19 February 2021, as against Thursday, 18 February 2021.

READ MORE: Why BlueScope’s (ASX:BSL) profit jumped 78% in first half

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