Bingo Industries FY18 full year results

Bingo Industries Limited has announced its full year results for the 12 months ending 30 June 2018, with pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) up 46 per cent to $93.7 million.

As it announced its full-year results, the company also revealed plans to acquire Dial A Dump Industries Group. More news on that here.

In an ASX statement, the company noted its strong growth trajectory was maintained with net revenue up 44.5 per cent to $303.8 million, attributing it to ongoing business momentum, favourable economic and market conditions and acquisitions.

The results showed earnings per share growth of 53.1 per cent year on year. The Tartak family, who own about 30 per cent of the $1 billion group, floated on the ASX last year after raising $440 million.

Pro forma net profit after tax before amortisation of acquired intangibles (NPATA) was up 44.8 per cent at $48.2 million. It noted that pro forma excludes acquisition, capital raising, integration costs and prepayment amortisation, prior to any impact of the company’s acquisition of Dial A Dump Industries Group.

The statement said the acquisition was performing in line with guidance and on track to realise full identified synergy benefits of $6 million from the acquisition of National Recycling Group in financial year 2019. There is also an anticipated growth in the underlying business of about 15 to 20 per cent for financial year 2019 of pro forma EBITDA.

Related stories:

Bingo CEO Daniel Tartak said the 2018 financial year was a very successful year across many measures for Bingo.

“We delivered strong growth in revenue and earnings, and successfully executed on our growth plans set out at the time of the initial public offering, through strong organic growth, acquisitions and entry into the Victorian market,” Mr Tartak said.

“We are on track to realise the full annualised synergies identified with the acquisition of National Recycling Group in FY19. Meanwhile construction at Paton’s Lane is progressing well and remains on track to be operational in July 2019.”

“We have strong momentum across the business, supported by major infrastructure programs in NSW and Victoria. We have seen a significant ramp up in government work in our building and demolition business and are winning more commercial and industrial contracts with Tier 1 customers. The infrastructure sector now contributes 22 per cent (against eight per cent at the time of the initial public offering) to our bins business, while residential construction activity remained buoyant during the year.”

“We continue to generate strong cash flows, with operating free cash flow up 45.6 per cent to $88.9 million, and have strengthened our balance sheet by refinancing our debt on more attractive terms. This provides a funding platform that is more aligned with the scale of our operations and greater flexibility to execute on our growth plans.”

Revenue from its collections increased by 45.2 per cent to $176.9 million, driven by increased volumes in the market underpinned by sustained construction activity and buoyant economic conditions. Its post-collections revenue meanwhile increased by 47.7 per cent to $176.2 million, which the statement said was primarily driven by increased network capacity in NSW, with full year contributions from St Marys and Revesby.

OUTLOOK

The statement said Bingo remains well positioned to capitalise on favourable end markets in both NSW and Victoria. It said continued revenue growth is expected to be underpinned by supportive macroeconomic conditions, a ramp up in infrastructure and commercial construction activity and an ongoing structural shift towards increased recycling.

Bingo’s positive momentum has continued into FY19 with a strong base of contracted work, projects under tender and pipeline of building and demolition and commercial and industrial opportunities.

“As a result, Bingo expects to report year-on-year pro forma before EBITDA growth of the underlying business in the range of 15 to 20 per cent in FY19, prior to any impact of the acquisition of DADI,” the statement read.

“Bingo expects EBITDA margin, excluding the Dial A Dump acquisition, to return to its longer term target of approximately 30 per cent in FY20, supported by enhanced recovery rates and internalisation of volumes following completion of development program.”

Mr Tartak said Bingo has a clear growth strategy in place which will see it continue to expand its network capacity over the next five years to help meet the rapidly growing demand along the east coast of Australia.

“With a strong team in place and a culture of success, I am confident of another successful year ahead for our company,” he said.

Bingo Industries to acquire Dial A Dump Industries

Bingo Industries has announced it will acquire fully integrated NSW waste and recycling business Dial A Dump Industries for $577.5 million.

It comes as Bingo Industries released its full-year results (more to come on this). According to an ASX statement, consideration for the acquisition will comprise $377.5 million in cash and $200 million in Bingo shares to be issued to vendors of Dial A Dump Industries Group (DADI Group) after the acquisition is completed.

The acquisition will be funded by an underwritten 1 for 2.48 $425 million pro-rata accelerated non-renounceable entitlement offer and $200 million scrip consideration to DADI vendors, priced at $2.54 per new ordinary share.

DADI Group generated financial year 2018 revenue of $198.2 million and earnings before interest, tax, depreciation and amortisation of $51.6 million.

Ian Malouf, the largest vendor of DADI will join the Bingo board after the acquisition is completed with a shareholding of up to 12 per cent post completion of the entitlement offer and acquisition.

Related stories:

The acquisition includes its post-collection assets, including Genesis Waste Facility at Eastern Creek, a recycling and landfill asset with approved capacity of up to two million tonnes per annum and remaining useful landfill life of about 15 years.

The ASX statement said DADI has strong future growth opportunities through exposure to favourable NSW infrastructure markets and structural shifts towards recycling.

It said there would be compelling future growth opportunities, including the opportunity to develop a Recycling Ecology Park in Eastern Creek aligned with Bingo’s strategy of further diversifying into putrescible, commercial and industrial and municipal solid waste and waste post collections.

The statement said it also provides economic benefits through volume growth and internalisation of 100 per cent of Bingo’s non-putrescible building and demolition and commercial and industrial waste, with significant landfill capacity for external customers and broader coverage of revenue from the excavation and demolition phases of the construction process.

CEO Daniel Tartak has committed to invest a further $72 million to take up 100 per cent of his entitlements, while Tony Tartak, the founder of Bingo and Mark Tartak have separately committed to invest a further $9 million each.

CEO Daniel Tartak said the DADI site at Eastern Creek provides Bingo with the opportunity to transform waste recovery and recycling in greater Sydney through the development of a Recycling Ecology Park.

“The Recycling Ecology Park, once completed, will considerably broaden our range of processed end products as we work towards building a circular economy. By seeking alternative waste solutions, we can enhance recovery rates, consistent with Bingo’s strategic intent of diverting waste from landfill through recycling led solutions,” he said.

Dial A Dump founder Ian Malouf said the company has a lot of respect for Bingo and how they have built their business.

“Bringing together these two Australian companies makes complete sense. I fully support Daniel Tartak the CEO and Bingo’s growth strategy, particularly the vision of a master site at Eastern Creek that can process all waste types. With the infrastructure program in NSW and the new waste levy in Queensland, the market is only going to grow and I’m excited to be on board for the journey,” he said.

Bingo expects to deliver run-rate synergies of $15 million per annum to be realised over two years, from internalisation of waste volumes, operational efficiencies and rationalisation of overheads.

The acquisition remains subject to customary closing conditions including Australian Competition and Consumer Commission informal merger clearance.

Planet Ark partner with Bingo Industries to divert coffee grounds

A new trial aims to divert spent coffee grounds from landfill and repurpose them into higher value uses.

Planet Ark will begin the Coffee 4 Planet Ark trial in September in Sydney, in collaboration Bingo industries and with leading coffee roasters and members, such as Lavazza. Tata Global Beverages via its Map Coffee brand will collect spent coffee grounds from limited corporate businesses in Melbourne.

Related stories:

The program aims to roll out around the country in 2019 after it identifies the best and most cost-effective collection method.

Planet Ark undertook a 2016 feasibility study that found almost 2800 tonnes of spent coffee grounds are sent to landfill in Sydney alone.

Once in landfill, the grounds would begin to break down and produce methane. Diverting the spent grounds from Sydney would save approximately 1600 tonnes of carbon dioxide equivalent emissions annually, according to the study.

To develop new end uses for coffee grounds, Planet Ark has begun working with the SMaRT centre at the University of New South Wales. It has also secured a partnership with Circular Food to produce a nutrient rich soil fertiliser called Big Bio, which will utilise the collected grounds.

Planet Ark CEO Paul Klymenko said the Coffee 4 Planet Ark program was an important step in ensuring spent coffee grounds were being used to their greatest potential rather than entering landfill.

‘Currently, the vast majority of coffee grounds produced after extracting your coffee are going to landfill. Planet Ark believes in creating a circular economy where all resources are used to their greatest potential,’ Mr Klymenko said.

‘We are thrilled to be working with some of Australia’s leading coffee roasters to trial a collection and repurposing system for coffee ground waste.’

No intention to sell Bingo Industries shares: Tartak family

Bingo Industries Limited (Bingo) has issued a statement on the ASX regarding speculation about a potential sale of shares by the end of the voluntary escrow period in August.

The Tartak family, who own about 30 per cent of the $1 billion group, floated on the ASX last year after raising $440 million.

“The Tartak family’s decision not to sell reflects their strong commitment to Bingo and their view that the long-term outlook for the company and the industry remains favourable, including the expected positive impact on Bingo from the impending introduction of a Queensland waste levy, expected to be legislated in early 2019,” the statement read.

Related stories:

Bingo will announce its FY18 full-year results on Tuesday, 21 August and the statement reaffirms its previously stated guidance of pro forma FY18 earnings before interest, taxes, depreciation and amortisation of about $93 million.

“I see [the statement] as very binding. I’m still a new CEO, still building credentials for myself, the last thing I would do is go against my word,” Chief Executive Daniel Tartak told the Australian Financial Review.

He added to the publication that he had been open with investors about his “five-year vision” for the company and it “seems right we continue to be long-term holders”.

Mr Tartak said Bingo Industries issued the statement in response to a “bit of market chatter and speculation”.

In March, Bingo Industries announced its half year results for the 2018 financial year, reporting strong net revenue growth of 43 per cent.

The company’s net revenue has increased to $142.4 million compared to this time last year, which according to its FY18 half-year results, reflects business momentum and increased market share.

Bingo Industries become ACOR member

Australian Paper Recovery, Bingo Industries, Closed Loop and Northern Adelaide Waste Management Alliance have become members of the Australian Council of Recycling (ACOR).

The new additions have grown ACOR to 36 members, worth $20 billon and employs around 50,000 people across the collection, sorting, processing, remanufacturing, and product stewardship activity streams.

Related stories:

A 10-point plan for results-based recycling is also being planned by the ACOR board to develop industry accreditation and system standards.

ACOR has also states it will provide stronger policy and innovation forums for business active in stewardship, including for packaging containers, e-waste, batteries, oil, solar related equipment and tyres.

“As ACOR aims for smart solutions in resource recovery policy and leadership in industry innovation, it’s pleasing to have new members like APR, Bingo, Closed Loop and NAWMA join ACOR and contribute,” ACOR President David Singh said.

“Our Board understands it’s time for our industry to stand up, put forward new ideas and positively partner for results-based recycling.

“Results-based recycling is about more jobs, broader environmental gains and continued community confidence via a mature industry. We get there through sound and accountable policy, technological and digital innovation, closed loop teamwork, and urban growth management,” he said.

Bingo and Planet Ark renew partnership

Planet Ark has announced it will renew its partnership with Bingo Industries Limited to continue the companies’ commitments to diverting waste from landfill and moving towards a circular economy.

The partnership will now focus on making Bingo the most sustainable company on the Australian Stock Exchange (ASX) by creating a solar power network through the installation of solar panels on the rooftops of Bingo’s recycling and recovery facilities.

The partnership originally began in 2011 and has seen Planet Ark and Bingo collaborating on sustainability initiatives including a waste education program for primary schools aimed at building awareness and encouraging positive environmental practices.

Related stories:

Bingo Chief Executive Officer Daniel Tartak said the seven-year partnership with Planet Ark has been invaluable.

“What we have been able to achieve together is something I am very proud of and with our renewed partnership we will be striving for even bigger, more ambitious sustainability goals,” Mr Tartak said.

“Our aim is to lead the industry in sustainable business practices and be a steward of change by increasing the diversion of waste from landfill and investing in new state of the art technology to increase recovery rates,” he said.

Planet Ark Chief Executive Officer Paul Klymenko said Planet Ark is proud of the partnership and relationship with Bingo Industries.

“It’s been very rewarding to work with what was once a small family owned skip bin company and see it grow to become an exemplar for others in the recovery and recycling of building and demolition waste,” Mr Klymenko said.

“They are major disruptors in the industry and together we are shaping the way forward for the waste industry.”

“For the next phase of our partnership, we’re excited to help make Bingo the most sustainable company on the ASX. We will achieve this by installing solar and smart battery energy systems across their sites, improving their energy and water efficiency and reducing the environmental impact of their truck fleet,” he said.

Bingo is a major sponsor of Planet Ark’s updated Recycling Near You website, to help millions of Australians find recycling drop off locations.

Bingo Industries release FY18 half yearly report

Bingo Industries has announced its half year results for the 2018 financial year, reporting strong net revenue growth of 43 per cent.

The company’s net revenue has increased to $142.4 million compared to this time last year, which according to its1H FY18 half-year results, reflects business momentum and increased market share.

The acquisition of National Recycling Group and Patons Lane Recycling Centre, announced in December, 2017, are noted as performance highlights in its half-year results.

Related stories:

CEO of Bingo Daniel Tartak said he was pleased to deliver another strong result.

“We have successfully executed several acquisitions in accordance with the strategy outlined at the time of our listing. These acquisitions have facilitated our entry and expansion in Victoria and consolidated our position in New South Wales, ahead of schedule.

“We have grown our network capacity by 70 per cent since listing in May 2017 to 1.7 million tonnes per annum and remain on track to double our footprint by 2020, to meet growing demand for recycling,” he said.

“This demand is underpinned by population growth, major infrastructure programs in Sydney and Melbourne, growing waste volumes together with diminishing landfill capacity. Meanwhile, we remain firmly committed to delivering a recycling recovery rate across the network in excess of 75 per cent, the highest in the industry.”

Broken down by segment, revenue in its collections sector increased by 29.1 per cent to $78.5 million and pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 18.9 per cent to $18 million, primary driven by increased market share in the NSW building and demolition and commercial and industrial waste streams.

The number of collection vehicles was boosted from 173 to 253 over the year, after taking into account the fleet acquired with the acquisitions in the first half.

Its post-collections revenue went up by 53.4 per cent to $81.8 million and pro forma EBITDA increased by 53.2 per cent to $24 million as Bingo saw further market share in NSW.

In terms of the outlook, the results note the positive business momentum has continued into the second half of financial year 2018. The company concluded it remains on track to deliver its recently upgraded FY 18 pro forma earnings before interest, taxes, depreciation, and amortisation guidance of approximately $93 million. Completed acquisitions are expected to contribute more materially in the second half of FY18.

“Our work in hand with and pipeline provides strong revenue visibility and we remain confident of achieving our upgraded earnings guidance for the year. Our focus is now firmly on bedding down our recent acquisitions to deliver our targeted synergies and leverage the scale advantage we have across our markets,” Mr Tartak said.

Bingo Industries to raise $120m for acquisitions

NSW waste and recycling organisation Bingo Industries has announced it is raising $120 million to acquire businesses National Recycling Group and Patons Lane.

The proceeds will also be used to fund organic redevelopment opportunities and repay debt used to fund its Has-a-bin acquisition in September 2017.

Bingo Industries floated on the stock market earlier this year. Approximately 63.2 million new shares are expected to be issued under the entitlement offer, with shareholders also offered one share for every 5.55 held.

Related stories:

The acquisitions, along with organic redevelopment of existing assets, are expected to support the company’s network capacity expansion across NSW and Victoria from 1.7 million tonnes per year to 3.4 million by 2020.

National Recycling Group (NRG) is the parent company of DATS Environment Services (DATS), Melbourne Recycling Centres and Harpers Bin Hire.

In a statement, Bingo Industries said that the acquisition will further accelerate its recent expansion into Victoria.

When commenting on the acquisition, CEO of Bingo Industries, Daniel Tartak, stated this venture will provide “compelling strategic benefits for Bingo.”

The move has led to the attainment of two new recycling centres in Victoria, and an additional recycling centre in New South Wales. Access to additional resources will be gained through DATS’ 55 trucks and 3,200 bins, in excess to Bingo’s current fleet, bins and waste infrastructure.

Bingo Industries float pays off for the company

Waste trucks transporting waste

NSW waste and recycling company Bingo Industries has floated onto the stock market – with the CEO Daniel Tartak said to collect $420 million from the move.

The Australian Financial Review reported that the Sydney-based company has become a $628 million company over a period of 12 years, after the Tartak family purchased a small skip bin firm more than a decade ago.

The company now runs 158 collection trucks and nine recycling centres in Sydney. The family will still maintain 30 per cent in a holding valued at $188 million.

Daniel Tartak has been CEO since June 2015, but he has been with the business for 12 years.

The four-truck skip bin company that helped define Bingo was acquired in 2005 for less than $1 million by Tony Tartak, Daniel’s father.

Daniel Tartak told the Australian Financial Review on Tuesday the family had seen a gap in the market and had the courage to back itself.

“We saw there was a big opportunity in offering a more innovative service in waste management and we really just went for it,” he said.

Bingo chairman Michael Coleman, who is a director of Macquarie Group said in a letter to potential investors that the company was a leader in building and demolition waste collection in Sydney and its presence in waste collection in the commercial and industrial market was growing strongly, largely through “market share gains”.

The commercial and industrial waste collection service commenced in 2013-14, but is expected to produce revenue of $31.7 million in 2016-17.

Mr Coleman said the broad dynamics in the sector were working for Bingo, with strong investment in infrastructure and population growth driving demand, while there was a “clear preference” for diversion of waste from landfill by governments, corporations and consumers, and this bolstered the importance of recycling.

The prospectus said the entire Australian waste management sector grew at a compound annual growth rate of 7.2 per cent between 2007 and 2015.