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Why Did Bingo Industries Share Price Dump 5% Today?

Max Molinari

Max is an Equity Analyst with ASR Wealth Advisers. He has studied a Bachelor of Business and a Bachelor of Laws at the University of Technology, Sydney. Max currently holds RG146 qualifications.

Bingo Industries Limited (ASX: BIN) has released its half-year results to the market today. The business has reported $82m EBITDA, while consensus expectations are $75.6m. Based on this strong half, the business has reiterated its full-year EBITDA guidance of $159m - $164m – which may be conservative. What is good to see is the strong uplift in EBITDA margin in the last six months from 26% to 33%. However, BIN expects this margin to moderate in the second half due to headwinds in multi-dwelling residential construction. Furthermore, the board has declared a 2.2cps interim dividend – representing a 38% payout ratio.

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Bingo Industries Limited (ASX: BIN) has released its half year results, the company beat EBITDA expectations, but the stock fell 5%. (Credit: Planet Ark).

Dial-a-Dump (DADI) has proven to be a fruitful acquisition for Bingo, along with the full year contribution from West Melbourne recycling facility. It has caused the post-collections division to increase revenue by 55.7%, with the infrastructure assets now contributing approximately 70% of the Group’s assets. This is the segment which brought the Group EBITDA margins higher, as the collections business is trekking relatively slower. If the DADI business were stripped out, Bingo’s core business has remained relatively flat – do to the challenging operating environment. However, the timing of DADI was extremely crucial for the business as it allowed BIN to offset industry weakness with synergies until the residential construction market starts to improve. Bingo is aware of the weakness in the current residential market and plans a slow shift towards the Construction and Infrastructure (C&I) segment through FY21.

Bingo appears to continue to utilize strong synergies emerging from the recent corporate deals the business has conducted. Furthermore, the company has outlined their optimism regarding their shift towards C&I.

 Bingo’s share price is trading at $3.04 per share, representing a 5 per cent fall from yesterday’s close.


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law, we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

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