DGL Group launches on the ASX today following successful IPO

DGL Group commenced trading on the ASX and on New Zealand's Exchange (NZX) at 10.30am AEST today. We take closer look.

Bernd Struben

Author bio Bernd Struben earned his BA in economics from the University of Michigan in 1991, with post-graduate studies in environmental economics at the University of Connecticut. Over the years he’s written about and analysed the tourism industry in the Caribbean; Europe’s commercial real estate markets; and, since moving to Australia in 2010, global and Aussie share markets. Bernd studies geopolitical and macroeconomic trends, alongside sector and company specific data, to gauge what he believes could be tomorrow's best investments. In his free time, you might find Bernd at the beach with his family or working on his next science fiction novel. Areas of expertise Australian and global share markets Macroeconomic and geopolitical trends Real estate Education Economics, University of Michigan Favorite investment quote "The four most dangerous words in investing are: 'This time it's different." — Sir John Templeton

Published May 24, 2021 11:49 am AEST

DGL Group Limited (ASX: DGL) commenced trading on the ASX and on New Zealand's Exchange (NZX) at 10.30am AEST today.

DGL Group, founded in 1999 by Simon Henry, manufactures, transports and processes chemicals and hazardous waste. The company's 1,300 customers run from small businesses to international corporations. It has more than 280 employees across its 26 operation sites in Australia and New Zealand.

asx share initial public offering or IPO represented by hands holding up sign saying welcome aboard — Image source: Getty Images

DGL Group IPO

DGL Group's initial public offering (IPO), underwritten by Bell Potter and Canaccord Genuity, was oversubscribed. The company raised $100 million in all new capital by issuing 100 million new shares at $1.00 per share.

Commenting on the company's IPO and listing, Managing Director, Simon Henry said:

Our initial public offering is a significant milestone for our company, providing it with additional capital to pursue growth opportunities as we continue to further expand our services offered across the chemicals lifecycle and cement DGL's position as a key partner to our customers.

I will continue to hold a significant shareholding in the company, as the largest shareholder, and I am committed to the success and growth of the company. I have not sold shares as part of the IPO process, and all capital raised will be reinvested in the growth of the business.

Henry added that "The growing focus on the environment, recycling and licensed treatment of waste from government, corporates and consumers, has and will continue to benefit our business in the longer-term."

Strong financial track record

DGL Group reported it had delivered strong financial results over the past few years as a private entity.

Total pro forma revenue in the 2020 financial year came in at $180.1 million. The company forecasts this will increase to $209.7 million in the 2022 financial year for a 2-year compound annual growth rate (CAGR) of 7.9%.

DGL Group is also forecasting strong growth in pro forma consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA). That came in at $19.2 million in the 2020 financial year and is expected to reach $29.0 million in the 2022 financial year for a 2-year CAGR of 22.9%.

The company credits revenue growth and ongoing improvements in its EBITDA margins for driving the growth.

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