Bingo Industries tips stronger full year result

Bingo shares soared on predictions of a vastly improved full-year result, as the waste manager beds in recent acquisitions.

Bingo Industries CEO Daniel Tartak. Picture: Getty Images

Waste management operator Bingo Industries forecast a big jump in its underlying annual result after integrating its $577 million takeover of Dial A Dump Industries and signalling strength in the broader Australian construction market.

Bingo said it underlying earnings would climb by as much as 55 per cent to a range of $159 million to $164m for the year to June 30, underpinned by a full-year contribution from Patons Lane Recycling Centre and Landfill, West Melbourne Recycling Centre, and the Dial-a-Dump business.

The company’s group earnings margin is ahead of schedule in returning to its long-term target of 30 per cent within a two-year period – as flagged at its 2019 financial results in August – while noting a NSW pricing increase from July would deliver a net benefit to the business this year.

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“The broader construction market remains strong, with the robust pipeline of activity in the commercial and infrastructure sectors underpinning the market,” Bingo managing director Daniel Tartak said ahead of its annual general meeting on Wednesday. “As anticipated, headwinds in residential construction are expected to continue throughout FY20. We also expect opportunities for ongoing growth in our commercial and industrial business.”

Bingo shares soared by 10.7 per cent to $2.80 with the stock up 53 per cent so far this year.

Mr Tartak in August declared 2020 would be “transformational” for Bingo, vowing to pursue more ­opportunities collecting and processing waste from big civil construction and infrastructure projects.

The Bingo boss said that sector of the market offered far more ­potential for his company than the apartment and residential construction industry, a slowdown in which caused Bingo to issue a profit warning in February when it announced its half-year profits and sent its share price plunging.

Mr Tartak also advised plans to boost his stake in the company to 19.83 per cent from 15.19 per cent from other members of the Tartak family following the end of the current blackout period on November 13.

“I’m pleased to be increasing my shareholding at such an exciting time for the company,” Mr Tartak said.

Bingo last year scooped up Dial-a-Dump with the acquisition including the Eastern Creek plant, the biggest landfill and waste recycling plant in the southern hemisphere with capacity of up to 2 million tonnes a year and 15 years of landfill life remaining at the site.

Bingo’s integration of Dial-a-Dump – approved by the competition regulator in February – will be completed by June 2020. Its Mortdale transfer station in Sydney will be operational in the second half.

Bingo’s Dial-a-Dump deal in March helped the waste management business record annual group underlying EBITDA of $106.1m.

The result, which Bingo said was in line with previous market guidance, was up 13.2 per cent from 2018 and included a $13.6m contribution from DADI, which Bingo completed its deal for in March.