One man’s trash is another’s treasure and these ASX-listed companies are certainly capitalising on our burgeoning waste management sector.
Australia’s growing economy has brought prosperity for many, but population growth brings with it the inevitable generation of more waste so it makes sense the waste collection, treatment and disposal services industry is growing at a rapid pace.
These 3 ASX-listed companies are turning piles of rubbish into piles of money.
Bingo Industries Ltd (ASX: BIN)
Waste management and recycling company Bingo Industries Ltd have gone from strength-to-strength in the last 12-months, with its share price up more than 60% from its $1.74 IPO in May 2017 to the April 5 closing price of $2.79.
Bingo is asserting itself as a serious growth stock despite its short time as a listed company, reporting a first-half pro forma NPAT of $21.3 million and revenue of $141.7 million with a strong second-half forecast and a solid plan to expand across Australia exponentially from its current NSW base.
Bingo’s share register is clocking some exciting movements too – this week well-respected investment house Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) announced it had become a substantial holder of Bingo with a 5.1% interest logged.
Soul Patts has a knack for investing in long-term winners so investors who like to follow suit on the big end of town should have their eyes peeled on this one.
Cleanaway Waste Management Ltd (ASX: CWY)
Integrated industrial cleaning company Cleanaway Waste Management Ltd has had a relatively volatile 12-months in terms of share price rises but is up from $1.16 at this time last year to an April 5 close of $1.43.
The $2.91 billion market cap company is poised for significant growth in the medium term with the current takeover of integrated waste management company Tox Free Solutions Limited (ASX: TOX) on the agenda, with a meeting to vote on the scheme of arrangement for the deal on May 3.
The offer so far prices Tox Free at $671 million, but the integration of both businesses could take up to two years if it all goes ahead as planned although Cleanaway has forecast the acquisition will see positive bottom line effects by FY2021.
Cleanaway reported “strong organic growth” for the six months to December 31, 2017 with NPAT rising 60% to $45 million, EBITDA up 2.8% to $154.2 million and gross revenue up more than 8% to $785.5 million.
Cleanaway will roll out a number of new contracts in the 2018 calendar year which should help to keep its FY18 guidance easily on track with its liquid and industrial services division poised for the biggest operational growth.
One to watch as the Tox deal progresses.
Sims Metal Management Ltd (ASX: SGM)
Global metals and electronics recycling company Sims Metal Management has seen share price slides in the 2018 calendar year so far, down from a February 28 high of $17.45 to an April 5 close of $14.13.
Sims is involved in the buying, processing and selling of ferrous and non-ferrous recycled metals and solutions for the disposal of post-consumer electronics products – e-waste recycling is no doubt a sector set to experience huge growth in the future.
Sims reported an underlying EBIT rise of 60% for its first-half results with a fully-franked interim dividend payment of 23c per share and underlying NPAT of $81 million.
The global e-waste recycling market is expected to grow US$26 billion by 2022 and if Sims Metal can get its fundamentals right it should be on track for big things in a short time frame.