Delorean (ASX:DEL) debuts on ASX, already posting profits

The business that converts rubbish to energy is hoping to weave similar magic for investors’ money too. Read how.

| More on:
light bulb surrounded by green hydrogen and renewable energy icons

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A company that earns revenue both from its customers and suppliers is listing on the ASX on Monday.

Delorean Corporation Limited (ASX: DEL) has raised $14 million through an initial public offering, with shares priced at 20 cents.

The IPO prospectus showed Delorean made a net profit after tax of $2.6 million in the last financial year.

Managing director and co-founder Joe OIiver told The Motley Fool that the business has already been turning a profit for 5 years.

“Our forecast is for net profit to match or better what we’ve done in financial year 2021.”

So what exactly does this Perth company do?

Turning rubbish into energy

Delorean is in the renewable energy industry, currently selling power to retail and wholesale clients under the CleanTech Energy brand.

The company aims to also become an energy producer by building its own bioenergy generation infrastructure. 

Its generators will receive organic waste that would otherwise end up in landfill, then convert it into electricity and gas.

“The capital from the IPO allows us to directly invest into shovel-ready projects in the Delorean pipeline and continue delivering on our growth strategy,” said Oliver.

The company already has one operational power generator in Western Australia, which has been running since 2015. 

There are plants currently under construction in South Australia and New Zealand. Another two sites in South Australia and Victoria will have their construction kick-started with the new money.

This ambitious vertical integration is how the business can run in the black now, but also have growth immediate prospects.

“As we shift into asset ownership, we’ll be augmenting [the retail business] with newly based revenues… from these infrastructure assets,” Oliver said.

“Our aspiration is to move to a fast growth company… and ultimately be a payer of dividends as we roll out these infrastructure assets.” 

Revenue from both sides of supply chain

Renewable energy is expected to receive positive treatment from all levels of government in the coming years.

“We’ve got a history of success and proven our capabilities in what is a high growth market with favourable regulatory conditions as well as environmental and sustainability benefits,” said Oliver.

The new bioenergy generators also have a unique revenue model where money is coming from both suppliers and customers.

The plants will charge a “gate fee” to parties that want to offload organic waste. Then the converted energy will be sold off to wholesale and retail clients.

“We work with the logistics companies that are picking up waste. We work direct with food manufacturers, councils — the providers of organic waste,” executive chair and co-founder Hamish Jolly told The Motley Fool.

“There is a financial incentive in that there’s not a landfill levy attached to [supplying Delorean], depending on the state.”

Delorean will start its life on the ASX with a market capitalisation of $35.9 million.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on IPOs

IPO written in circles with a man holding a smartphone and a laptop open.
IPOs

Interested in upcoming IPOs? These ASX shares will make their debut in June

Let's find out which companies are set to make their debut.

Read more »

A woman sits crossed leg on seats at an airport holding her ticket and smiling.
IPOs

Virgin Australia eyes upcoming ASX IPO: ‘Doing at least as well’ as Qantas

Virgin shares were dramatically wiped from the market in 2020. Could they return as soon as next year?

Read more »

Graphic showing a tablet with an IPO rocket going up with a stock market chart representing the upcoming IPO of ASX uranium and lithium share Aurora Energy Metals
IPOs

Southern Palladium share price zooms 30% higher on ASX debut

The ASX has just hosted its latest IPO. Let's check out how its going.

Read more »

IPO written in circles with a man holding a smartphone and a laptop open.
IPOs

3 junior miners with initial public offerings and ASX floats in June

These small-cap miners are getting ready to go public next month. Here are all the details.

Read more »

a man sits on a rocket propelled office chair and flies high above a city
IPOs

Aurora Energy Metals share price rockets 35% on ASX debut

This lithium and uranium explorer debuted the ASX in style.

Read more »

Man in business suit above the clouds plummeting downwards back first
IPOs

Chrysos Corporation share price plummets 40% on ASX debut

The ASX newbie offers a fresh way to analyse gold assays.

Read more »

Graphic showing a tablet with an IPO rocket going up with a stock market chart representing the upcoming IPO of ASX uranium and lithium share Aurora Energy Metals
IPOs

New ASX uranium share to hit boards next month and investors are already pouncing

Introducing ASX uranium and lithium miner Aurora Energy Metals...

Read more »

A miner in a hardhat makes a sale on his tablet in the field.
IPOs

This lithium miner is set to list on the ASX next month following its IPO, and counts a Tesla supplier among its key investors

We could be in for a new ASX debutant...

Read more »