Bingo (ASX:BIN) shares up 39% in six months; what’s driving the rally?

Be the First to Comment Read

Bingo (ASX:BIN) shares up 39% in six months; what’s driving the rally?

 Bingo (ASX:BIN) shares up 39% in six months; what’s driving the rally?

Summary

  • Shares of Bingo Industries Ltd (ASX:BIN) jumped 39.08 per cent in the past six months even without any significant announcements being made recently.
  • Robust financial results in FY20 mainly buoyed the stock; the company recorded 196 per cent growth in statutory net profit after tax (NPAT) to A$66 million.
  • In its October trading update, the company said that it may benefit from the robust stimulus and policies drafted by the government for the infrastructure sector.

The Bingo Industries Ltd (ASX:BIN) share price jumped 39.08 per cent in the past six months, even though no significant announcement was made by the recycling and waste management company. Robust financial results in FY20 mainly buoyed the stock.

Image Source: Shutterstock

The stock is up 10.48 per cent so far in January 2021. On Friday, 8 January 2021, the stock closed at A$2.74, up 0.22 points, or 8.73 per cent, against the previous closing on Thursday, 7 January 2021.

Strong performance in 2020

Bingo Industries was among those few companies that posted robust full-year results for FY20 (in August 2020) despite coronavirus pandemic disrupting the business. The company recorded 196 per cent growth in statutory net profit after tax (NPAT) to A$66 million. Similarly, the increase in underlying revenue was up 21 per cent to A$486.7 million. The underlying earnings before interest, taxes, depreciation, and amortization (EBITDA) was up 41 per cent to A$152.1 million. The company issued a dividend of 3.70 cents per share for FY20. The firm posted an operating cash flow of A$160.1 million, up 37.4 per cent.

Image Source: © Kalkine Group 2020

What to expect in 2021

Even as the company maintained in its November annual general meeting (AGM) that the coronavirus pandemic may continue to interrupt business in 2021, medium-term tailwinds will still outweigh. According to the company’s forecast, EBITDA margin would fall by nearly 2 per cent to 3 per cent in FY21. However, it would rebound to 30 per cent in line with the company’s longer-term target.

READ MORE: Why Boart Longyear (ASX:BLY) created a buzz this week

Government’s policies give hope

In its October trading update, the company said that it may benefit from the robust stimulus by the government in the infrastructure sector. The positive changes concerning the waste sector are also suitable for the company’s long-term business model, it noted. The Recycling Modernisation Fund and the Modern Manufacturing Strategy by the central government would help the company going ahead, Bingo said.

READ MORE: Why did KGL Resources Limited’s (ASX:KGL) shares close 12% up on the bourses?

 

Disclaimer

Speak your Mind

Featured Articles

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK