Bingo Industries in $38m Victorian expansion

Listed waste management firm Bingo Industries has expanded into Victoria, buying three Melbourne businesses for $38m.

Bingo Industries has expanded into Victoria

Listed waste management firm Bingo Industries has expanded into Victoria, snapping up three Melbourne businesses for $38 million as it delivered on plans to capitalise on the state’s fragmented waste market.

The Sydney-based company recently booked a $19.8m net profit for the full year, 10 per cent above its prospectus forecast, in its maiden results since listing in May. On a pro forma basis, net profit came in at $32m, compared with last year’s $15.1m, while pro forma net revenue of $209.7m was $6.3m above the prospectus forecast and up 47 per cent on last year.

The Melbourne businesses — Konstruct Recycling, Resource Recovery Victoria and AAZ Recycling — were acquired through existing debt facilities, with a three-year call option to purchase an additional property for $7m, the company said. A further $8m will be spent on additional equipment on the sites.

“We are excited to be moving into Victoria buying three strat­egically placed businesses,” CEO Daniel Tartak said.

“The Victorian end market is attractive, growth fundamentals are strong and government legislation is supportive of our business model that diverts waste from landfill for recycling.

“The transactions, which comprise three collections businesses and two recycling facilities, mark an important step in the company’s strategy to expand nationally over the next five years.”

From its origins as a four-truck skip company bought by the Tartak family in 2005 for $1m, Bingo now has a market cap of $688m, with 10 recycling centres in NSW, mostly in Sydney. The Melbourne businesses will add 40 trucks to its fleet and two recycling centres, as well as 100 employees.

After listing at $1.80 a share in May, shares hit a record high of $2.11 in July, before all gains were erased early this month after the company was named in a Four Corners investigation into dubious practices in the waste industry. They are trading at about $2.

Mr Tartak said the company was committed to driving sustainable long-term growth. “The investment we have made to expand our strategic presence, network capacity and recycling capabilities is paying off,” he said.

“Sustainability is at the centre of everything we do at Bingo. We have stayed true to our core focus, which is continually improving the diversion of waste from landfill through our innovative resource recovery and recycling practices.”

The average diversion from landfills across the network was in excess of 75 per cent for the year to June 30, the company said.