BINGO provides an update on impacts of COVID-19

BINGO has withdrawn its FY20 earnings guide as a result of the impact of COVID-19, but highlighted it remains well positioned over the medium term to capitalise on positive future regulatory and market tailwinds underpinning the business.

In a statement, BINGO highlighted as a result of measures announced by both state and federal governments to close non-essential gatherings, commercial and industrial waste volumes are likely to be impacted.

The greatest impact is expected to be in the commercial, retail, hospitality and shopping centre end marks.

“Although we have seen minimal disruption to existing construction projects, disruptions to the supply chain arising from the COVID-19 as well as economic dislocation are expected to result in some delays to the commencement of new projects,” the statement said.

“We expect this will continue in the short-term and will likely impact volumes and market pricing in the building & demolition (B&D) sector. As and when activity recovers, BINGO would expect to benefit from government stimulus packages aimed at fast tracking infrastructure and construction activity.”

The company highlighted its strong balance sheet, backed by significant property assets, noting it was confident it can meet all future cash requirements.

“We are taking proactive measures to ensure the safety of our people, sustained services to our customers and the preservation of cash flow to ensure the business is in the best position possible.”

BINGO Managing Director Daniel Tartak said the company had a strong first three quarters of FY20 and is in a solid financial position.

“Our customers are our partners, and we will continue to work with them to ensure safe and ongoing collections and waste services during this time,” he said.

“First and foremost, we are taking all the necessary precautions to safeguard the safety of our people. We have also proactively implemented business continuity plans to ensure our business continues to operate efficiently during this time of great uncertainty.”

“Despite the immediate challenges from COVID-19, BINGO remains well positioned over the medium- term to capitalise on the positive future regulatory and market tailwinds underpinning the business.”

Last year, Bingo Industries acquired Dial A Dump Industries (DADI) and set its sights on building a resource recovery park as part of the acquisition.

BINGO Industries agreed to divest its recycling facility in Banksmeadow, NSW to ease ACCC competition concerns regarding its $578 million acquisition of DADI. The ACCC required Bingo to divest the facility to maintain competition for B&D processing in Sydney’s eastern suburbs.

Following this, the ACCC announced it would not oppose the acquisition after accepting a court-enforceable undertaking from BINGO to divest its Banksmeadow processing facility. CPE Capital was announced as the buyer for $50 million in September.

In announcing the company’s full-year results in August, Daniel noted that the asset base secured through the acquisition would transform the business for many years to come. Some of its most recent redevelopments include Bingo’s first recycling centre in West Melbourne, Victoria, having first entered the market in 2017 through several strategic acquisitions.

BINGO announces financial year results

BINGO Industries has announced its financial year results, with net revenue up by 32.4 per cent to $402.2 million and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) up by 13.2 per cent to $106.1 million.

BINGO Managing Director and Chief Executive Officer Daniel Tartak said business performed broadly in-line with the prior financial year, in what was flagged as a transitional year for the business following its Dial A Dump (DADI) acquisition.

“The acquisition of DADI has materially changed our business, and we’ve made great progress since integrating DADI into our operations,” Mr Tartak said.

“The contribution from DADI since the completion of the acquisition was in-line with expectations. The asset base we’ve secured through the acquisition will help transform our business for many years to come, while supporting our vision for a waste-free Australia.”

Collections revenue was up 20.7 per cent to $213.5 million, which Mr Tartak said was largely driven by a full year contribution of the Victorian business and a partial year contribution of DADI collections revenue.

“Our Post-Collections infrastructure assets now account for approximately 63 per cent of our EBITDA and continue to support the repositioning of the business,” Mr Tartak said.

“We’ve had more than two years of constant activity and investment since our IPO and we now expect to start reaping the financial benefits. We’ll begin to see the positive cash flow impacts from Patons Lane, West Melbourne and a full year run-rate of DADI in FY20.”

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BINGO unveils West Melbourne Resource Recovery Centre

BINGO Industries has unveiled its upgraded resource recovery centre in West Melbourne, including a new plant, weighbridge, safety and structural improvements.

The upgraded recycling centre is set to become an important asset within Victoria’s network of recycling infrastructure with BINGO targeting a resource recovery rate of over 75 per cent.

BINGO entered the Victorian market in 2017 through several strategic acquisitions. In the last 12 months, the company has invested in excess of $50 million in acquisitions and committed an additional $50 million for upgrades of local waste management businesses and poorly managed post-collections assets.

BINGO has invested over AUD$20 million in the redevelopment of the West Melbourne site. Upgrades to the facility also include upgrades to the electrical and fire protection systems, including thermal cameras.

BINGO Managing Director and CEO Daniel Tartak said that despite being a relatively new entrant into the market, the company is confident that it has the ability and know-how to be stewards for change and lead the Victorian recycling market to achieve enhanced sustainability outcomes.

“The upgraded facility is a great example of what BINGO is able to achieve in transforming previously poorly-managed post collections assets. Large-scale infrastructure projects like this one will help reduce Victoria’s dependence on landfills, create new jobs and drive further investment in recycling facilities,” Mr Tartak said.

Victoria’s population and economic growth is fuelling increases in waste volumes. The state is expected to be producing 21 million tonnes of waste per year by 2044, with metropolitan Melbourne accounting for 80 per cent of the state’s waste generation.

BINGO now operates five recycling facilities in Victoria, located at Braeside, Dandenong, Campbellfield, Clayton South and West Melbourne, as well as the TORO Waste Equipment manufacturing facility at Braeside.

BINGO’s Victorian footprint continues to grow, with the company now operating a fleet of 100 trucks and employing over 130 staff. A significant pipeline of both building and demolition and commercial and industrial revenue has been identified in Victoria, and this market remains a key area of focus for BINGO in realising its vision for a waste-free Australia.

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BINGO receives green light from ACCC for Dial A Dump acquisition

BINGO Industries has welcomed the Australian Competition and Consumer Commission’s (ACCC) announcement that it would not oppose Bingo’s proposed acquisition of Dial A Dump Industries (DADI).

It comes after BINGO accepted a court-enforceable undertaking from BINGO to divest its recycling facility in Banksmeadow, NSW.

Earlier this year, BINGO offered to sell its Banksmeadow processing plant to ease ACCC competition concerns regarding its $578 million purchase of Dial-a-Dump.

In August last year, BINGO announced it intended to acquire fully integrated NSW waste and recycling business Dial A Dump Industries for $577.5 million.

The acquisition includes its Genesis Transfer Station in Alexandria, Genesis Waste Facility (landfill, materials processing facility, and recycled products processing facility) at Eastern Creek and a collections fleet of 55 vehicles.

BINGO Managing Director and Chief Executive Officer Daniel Tartak said the ACCC decision was an important step in realising the company’s vision and five-year strategy to be a fully vertically integrated business and diversify into new markets in NSW.

“Our acquisition of DADI will not only be transformational for BINGO, but also for recycling in the greater Sydney region.

“Our development of a Recycling Ecology Park at Eastern Creek will allow us to process and recycle every type of waste, accelerate our vertical integration and compete more effectively with the larger local and international players.

“The ability to further consolidate more of our recycling, processing, distribution and landfill at a single site will deliver significant economic benefits. It allows us to further grow waste volumes, by freeing up space across our network of resource recovery facilities, some of which can be better utilised as transfer stations,” he said.

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DADI is a fully integrated recycling and waste management services provider in NSW. DADI has operations across the waste value chain from collections to recycling, landfill and recycled product sales. The principal asset is the waste management and resource recovery facility at Eastern Creek that spans approximately 55 hectares and is located in the Western Sydney growth precinct. It has an approved capacity of up to two million tonnes per annum between its resource recovery facility and landfill, and approximately 15 years of remaining landfill life.

BINGO expects to achieve run-rate cost synergies of around $15 million per annum through internalisation of waste volumes, operational efficiencies, and rationalisation of overheads over a two-year period.

ACCC clearance satisfies a condition precedent relating to the acquisition of DADI, and transaction settlement is expected to occur in March 2019.

“This will help ensure our vision for a more sustainable Sydney is realised, as we push for a waste-free Australia and move to build a circular economy through diverting waste from landfill,” Mr Tartak said.

“It will provide our customers with a better and more sustainable solution for both building and demolition (B&D) and commercial and industrial waste,” he said.

According to an ACCC statement, there are larger players than BINGO in the waste industry, such as SUEZ, Veolia and Cleanaway, but BINGO is the most significant player in Sydney B&D collection and processing.

“The transaction raised a number of significant concerns. Ultimately, we have concluded that the proposed acquisition, taking into consideration the divestiture undertaking, would be unlikely to substantially lessen competition in any market,” ACCC Chair Rod Sims said.

A key issue for the ACCC was the loss of competition in B&D waste processing in Sydney’s Eastern Suburbs and inner city.

“The proposed divestment of the Banksmeadow facility will maintain competition for B&D waste processing in Sydney’s Eastern Suburbs and inner city,” Mr Sims said.

The other key concern related to the removal of future competition between Bingo’s and Dial-a-Dump’s non-putrescible landfill.

“The Eastern Creek landfill site that Bingo will acquire is a strategically significant asset given that some of Sydney’s other dry waste landfills are due to close in the next few years and approval of new landfills is likely to be difficult,” Mr Sims said.

“The current practice of taking waste to Queensland will also become more costly after the introduction of the Queensland landfill levy.”

Post-acquisition Bingo is expected to hold a significant share of Sydney dry landfill in terms of both annual throughput and remaining airspace.

A key issue was whether Bingo would be able to stop competing B&D waste processors from having access to dry landfill at competitive prices due to its increased vertical integration.

“After an extensive investigation, including consultation with many industry participants, we considered that most building and demolition waste processors would have sufficient dry landfill alternatives to Bingo,” Mr Sims said.

Due to the introduction of the Queensland landfill levy, the ACCC considers it likely that Sydney dry landfill prices will rise this year regardless of the proposed acquisition. This will provide an incentive for increased recycling of B&D waste and incentives for more landfill capacity being made available in NSW.

BINGO announced that the board has approved the implementation of an on-market buy-back of up to $75 million of its ordinary shares.

As foreshadowed in BINGO’s half year results announcement, BINGO’s strong balance sheet together with the current trading value of BINGO shares supports the buy-back as a capital management initiative.

The buy-back is expected to commence on 15 March 2019 and will end 12 months from the date of this announcement.

The timing and number of shares purchased under the on-market buy-back will be contingent on Bingo’s share price and prevailing market conditions.

 

Bingo awarded SV grant for Braeside recycling redevelopment

Sustainability Victoria (SV) has awarded Bingo Industries a $500,000 grant to revamp its Braeside recycling centre as part of the third round of funding released under the Victorian Government’s Resource Recovery Infrastructure Fund.

Bingo’s Braeside recycling centre will process mixed solid inert commercial and industrial and building and demolition waste. The Braeside facility will divert approximately 100,000 tonnes of waste from landfill across target waste streams in its first year of operation, with a target resource recovery rate of 80 per cent.

The redevelopment will be see a complete rebuild of the existing infrastructure with plans to significantly improve resource recovery rates and minimise operational impacts on neighbouring land. The recycling facility will be completely enclosed with innovative noise and dust mitigation systems installed across the facility.

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SV’s fund aims to recognise innovative recycling infrastructure projects that improve the collection and processing of recyclable materials and generate jobs in the Victorian resource recovery industry.

Bingo Industries Managing Director Daniel Tartak said Bingo is excited about the role it has to play in assisting governments and communities in achieving their sustainability outcomes through developing innovative recycling infrastructure.

“We see the redevelopment of our Braeside and West Melbourne facilities as crucial in assisting Victoria in addressing the recent issues developed as a result of external pressures on waste management infrastructure such as China’s ban on importing Australian waste,” Mr Tartak said.

 

Bingo invested $53 million on its initial expansion into Victoria in late 2017 with the acquisition of three businesses, Konstruct Recycling, Resource Recovery Victoria and AAZ Recycling.

The company purchased the Braeside site in late 2017 and was awarded development approval by City of Kingston local council on 21 December 2018. Redevelopment work will commence at the site in early 2019 and is expected to be completed in the second half of 2019.

Bingo now operates a fleet of 77 trucks and five recycling and waste management facilities in Victoria, employing over 130 Victorian employees. The company views Victoria as a key part of achieving its vision to see a waste free Australia by diverting waste from landfill and moving towards a circular economy.

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.

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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.

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