BINGO Industries Considers Queensland Acquisitions
Waste management and recycling firm, BINGO Industries, is looking at acquisition activities in Queensland where it intends to construct a third arm in its operations within eastern Australia. Meanwhile, BINGO’s chief executive Daniel Tartak said that the company would be extremely disciplined in evaluating acquisitions in Queensland while its fleet of orange-coloured trucks remains to be seen on the roads in the northern territories to cater to consumers there. Specifically, the acquisition is likely to be in the outskirts of Brisbane and would not come with a hefty price tag.
Currently, the firm is ready to spend between a range of $30 million to $50 million funded through its existing balance sheet. Since its establishment, the firm has an excellent track record in making profitable acquisitions. Thus, Mr Tartak is careful not to put a stain on its current report card. An excellent example of a strategic acquisition made was the $578 million Dial-A-Dump deal finalised in 2019. This is because greater cost savings than the $15 million initially planned by the end of the 2020 calendar year were likely to materialise.
From a broader point of view, the firm is of the view that the construction market from which it collects demolition waste in Victoria and New South Wales are gradually showing signs of a turnaround. For instance, its West Melbourne facility stands to benefit from recent go-ahead of its 24-hour license, which, in turn, allows for a massive increase in its throughput of building and demolition waste.
Likewise, the positivity was reflected in its first-half report for the period ending 31 December 2019. BINGO Industries posted a 185 per cent increase in its interim statutory profit to $38.2 million. This was attributed mainly to the $22.4 million gain from the sale of its waste processing outlet at Banksmeadow near Port Botany in Sydney. Specifically, the sale was made as part of BINGO’s takeover deal for Dial A Dump by the Australian Competition and Consumer Commission (ACCC). The plant was subsequently purchased by private equity firm CPE Capital for $50 million.
On the other hand, BINGO Industries reported its underlying earnings before interest, tax and depreciation to increase close to 75 per cent to that of $82 million. Subsequently, guidance for underlying earnings for the full year remains to fall between the range of $159 million and $164 million.The company declared a 27.9 per cent increase in its dividend to that of 2.2 cents per share. However, it is also under the watchful eyes of ACCC as the competition watchdog investigates the building and demolition waste sector in New South Wales.
Specifically, investigations commenced in late 2019 due to price adjustments rolled out in the sector last July. Nevertheless, BINGO Industries is likely to flourish under the leadership of Mr Tartak, who has increased his stake in the waste management group. The purchase of an extra 30 million shares worth $77 million from his parents adds another 19.83 per cent on top of his personal holding of 15.2 per cent.
By Caroline Wong
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