Wasteco Group Ltd ---WCO

[whatsup]

Recent placement at .05 , listed today at .08 on steady volume RTO via GWC.

[silverblizzard888]

Recent placement at .05 , listed today at .08 on steady volume RTO via GWC.

At 8 cents its a bit high for a business that is deeply in debt, I may be interested at 5 cents.

[nztx]

Past IPO's, floats etc have left a lingering indigestion issue

A wait and see job.. these guys have pile of shares on issue
so always a chance of a consolidation too

[silverblizzard888]

Past IPO's, floats etc have left a lingering indigestion issue

A wait and see job.. these guys have pile of shares on issue
so always a chance of a consolidation too

Definitely worth waiting till the share price find its true value over time and for the management team to get some runs on the board.

[YoungBull]

Will watch this with keen interest - my gut likes waste businesses, they seem safe. Does anyone have any experience in this sector? What typically makes a waste company profitable, and how does it grow?

[SailorRob]

This is the document to study, preferably from the back to the front.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/GWC/403572/385021.pdf

[etrader]

Thanks for the link, looks to be growing year on year with some competitors absorbed into the mix.

Reading the document you can see the intentions to potentially open in the north where the density of people creates scale.

Will be interesting to see year end once new shareholders have bedded in.

Currently is the only listed waste stock so could create some loyalty as its local, $55 million cap value debt free $4 mill in cash and around $33 million in assets.

I like the Verticles around waste, recycling, rubbish tippers, medical waste all under on larger location from what I can read.

As this was a back door listing they’ve disclosed a statement of the business outlining turnover, profit/loss and their vision to expand which sounds on track but I’m guessing won’t be till 31 March year end before we get a decent understanding of how it’s tracking.

Founders own around 74% of the enlarged company, the previous shareholders of the listed shell a couple of % and 12% of new shareholders.

I’ve chucked in a couple of grand just to tuck under the mat for a 5 year hold so let’s see how the next 3 - 5 years track

[Entrep]

Will put this one on my watchlist. Definitely interested lower.

[silverblizzard888]

https://www.youtube.com/watch?v=0ilhMsfJ3sg

[etrader]

With NZ’s only listed waste company logic would say there’s a fragmented market with lots of smaller established rubbish runs through the country.

Vendors could either exit with a payout or issue new shares to expand regionally over the coming years.

They recently were in Deloittes 50 for 5 year growth which means back in 2018 to have min turnover of $5 mill, they came in 9th fastest with just this year alone 80% plus.

I’ve been collecting a small holding around 8c when parcels come up.

[Mr Slothbear]

Just scanned doc first time, results of last 8ish years look incredibly impressive.

management clearly appears incredibly focused and driven to achieve such high and consistent growth.

two conerns,

- COO Carl was declared bankrupt in 2010, looks like he fully channels the entrepeneurial spirit, you’d want that in check with some risk management.

- valuation. Current valuation appears to be roughly 8x forward ebitda, assuming their half year to sept 2022 figures annualise linearly. Growth from most recent half year appears to be equal to entire previous full year, 3.45m ebitda for 6 months to 30th sept vs 3.22m ebitda for full year to 31st march 22022.

looks like a rarely vauable addition to the NZX but I won’t be jumping in at current price.

[nztx]

What is the notional value of the added creative wealth of original holders - manufactured
by virtue of slapping this one up on NZX ?

Let's face it - it would be hard not to find in any of these new listings some manufactured creative wealth
at the time NZX press the start button, after the fancy moneymen have done a bit of polishing the job :)

Whether humungous manufactured intangibles, freebies dished out to friends & associates
or an outfit leveraged up to just below it's eyeballs - you know, all the tricks orchestrated
by the fast moneymen and at times slippery corporate advisers :)

HMY or MFB would be a great examples of how it may turn to custard in months/years after listing
as the SP starts spiralling downwards on less than mediocre results or other conditions etc ;)

[etrader]

Just scanned doc first time, results of last 8ish years look incredibly impressive.

management clearly appears incredibly focused and driven to achieve such high and consistent growth.

two conerns,

- COO Carl was declared bankrupt in 2010, looks like he fully channels the entrepeneurial spirit, you’d want that in check with some risk management.

- valuation. Current valuation appears to be roughly 8x forward ebitda, assuming their half year to sept 2022 figures annualise linearly. Growth from most recent half year appears to be equal to entire previous full year, 3.45m ebitda for 6 months to 30th sept vs 3.22m ebitda for full year to 31st march 22022.

looks like a rarely vauable addition to the NZX but I won’t be jumping in at current price.

Looking over the pre merger document they released outlining how many trucks they own in various areas from low margin wheelie bin collections of only 3000 bins through to medical waste they’re clear about what they own, and where they see growth.

Currently there’s $10 mill worth of tenders awaiting direction which as they said some might win, others might not but will update the market as it progresses.

They’ve stated 2023 FY is on track for similar growth to this year, didn’t quantify that as % or dollars but even if it’s dollars they were up 83% from last year, if they’re up $8 mill without winning any large new contracts could it hit $26 mill T/O ?

Based on recent performance, margins and ebitda where do you guys see it sitting as fair value if they track around $26 mill.

They’ve also tendered for one off contracts in the north but to date nothing won, still their intention is to become the number 1 independent in the south and they’ve already identified target companies on their takeover target.

Founders control around 74% of the enlarged listed business, $4 mill cash, debt free and around 180 employees down south.

There’s money in waste just need to keep winning margin accretive contracts.

[etrader]

Given WCO fairly low market cap of $55 mill and $18 mill T/O as last reported would one think a major player would take a blocking share of 10.1% for around $5.5 mill as a defensive position similar to when the two supermarkets raided the warehouses register to ensure their EXTRA format for food wasn’t going to get a foothold (10 years latter we can see that effect)

Although WCO is a relatively small player they have become a well respected player in their local turf with intentions to expand as per $10 mil worth of tenders are awaiting direction be they win some at reasonable margin this will all help towards growing scale.

North Island is where the real scale is but also you’re playing with multinationals with billions behind them such as Enviro.

I’ve recently acquired two more parcels and on the hunt to collect around the 7.5 - 8c as funds become available.

[whatsup]

Given WCO fairly low market cap of $55 mill and $18 mill T/O as last reported would one think a major player would take a blocking share of 10.1% for around $5.5 mill as a defensive position similar to when the two supermarkets raided the warehouses register to ensure their EXTRA format for food wasn’t going to get a foothold (10 years latter we can see that effect)

Although WCO is a relatively small player they have become a well respected player in their local turf with intentions to expand as per $10 mil worth of tenders are awaiting direction be they win some at reasonable margin this will all help towards growing scale.

North Island is where the real scale is but also you’re playing with multinationals with billions behind them such as Enviro.

I’ve recently acquired two more parcels and on the hunt to collect around the 7.5 - 8c as funds become available.

Great decission but will stick around at these prices imo for a wee time yet, runs on the board etc atm.

[etrader]

Agree and very happy for it to consolidate at these levels.
Now they’re listed they haven’t made any announcements to date apart from all the standard compliance posts, once tenders are confirmed and Q3 sales come out the market will have time to digest where they see value.

Founders from memory control around 74% so if they remain committed for a long haul you only have $13 mill of free float

[whatsup]

Above the .08c listing price today, always a good sign !

[etrader]

Above the .08c listing price today, always a good sign !

Any small lift while a small volume increase on no news would tell me smaller investors are throwing a few bucks in.

The first direction we will get is q3 post listing so let’s see what we can digest, the report I remember seeing from the pre listing document is they are on track to similar growth from the previous year.

I would expect the continued absorption of small Mum and Dad bin companies given their capital has bolstered but as long as it’s strategic and lifts gains with margin I’m all for.

I’ve lifted my position again so will keep collecting as cash allows

[Jaa]

Guess they do take recycling seriously as they even recycled an old NZX listing.

[Balance]

Guess they do take recycling seriously as they even recycled an old NZX listing.

Shane Edmond from Forbar (CBL, Intueri, MPG, Feltex, MFB etc etc etc) and Roger Gower of Backdoor listing fame.

Pass.

[whatsup]

Shane Edmond from Forbar (CBL, Intueri, MPG, Feltex, MFB etc etc etc) and Roger Gower of Backdoor listing fame.

Pass.

Bal, This company has come to the borse via a backdoor listing, GWC !!

[Balance]

Bal, This company has come to the borse via a backdoor listing, GWC !!

Exactly.

Plus SMS anyone?

Or Orion Minerals?

[winner69]

Hamish Sheppard confirmed as a Senior Manager 19/12

Issued 1.5 million options 23/12

5th January RESIGNED

Think he had been around for a few years as well and they raved about him as a leader in the listing profiles

[winner69]

Shane Edmond from Forbar (CBL, Intueri, MPG, Feltex, MFB etc etc etc) and Roger Gower of Backdoor listing fame.

Pass.

Is that the same Roger Gower involved with Me Today

[whatsup]

Is that the same Roger Gower involved with Me Today

Yup !! and ex Sky something I think !!

[whatsup]

Hamish Sheppard confirmed as a Senior Manager 19/12

Issued 1.5 million options 23/12

5th January RESIGNED

Think he had been around for a few years as well and they raved about him as a leader in the listing profiles

I think they have to hang around for a while b4 they are vested !

[winner69]

I think they have to hang around for a while b4 they are vested !

So options not attractive enough for him to hang around then

Read his profile ….he will be missed

[winner69]

At least the listing stuff disclosed that one of the Exec/Directors was once a bankrupt

Must stop reading these things

[whatsup]

At least the listing stuff disclosed that one of the Exec/Directors was once a bankrupt

Must stop reading these things

Hands up the person that HAS'NT made a mistake or four ?

[etrader]

Wasteco have conditionally purchased a family owned road sweeping business in Nelson for 900k plus $100k for the road sweeping truck, this will give them a foothold into nelson and allow some of their team to move into that area and roll out more offerings within the region

[percy]

Wasteco have conditionally purchased a family owned road sweeping business in Nelson for 900k plus $100k for the road sweeping truck, this will give them a foothold into nelson and allow some of their team to move into that area and roll out more offerings within the region

I was at The Skope Classic motor racing on Saturday.
Wasteco vechicles and toilets .Toilets were clean and good order.
I came home impressed with Wasteco and looked at their fundamentals.Not flash as yet.
Have not bought, but will keep an eye on them.

[whatsup]

I was at The Skope Classic motor racing on Saturday.
Wasteco vechicles and toilets .Toilets were clean and good order.
I came home impressed with Wasteco and looked at their fundamentals.Not flash as yet.
Have not bought, but will keep an eye on them.

Percy, Them being a Ch-Ch company I would have thought you would be in after they did a very good job of sorting/cleaning up your sewerage pond fire, where was it, Bromnley ?

[percy]

Percy, Them being a Ch-Ch company I would have thought you would be in after they did a very good job of sorting/cleaning up your sewerage pond fire, where was it, Bromnley ?

I have been very slow picking up on them.Until they were listed I thought they were part of Waste Management,so I am only now noticing their trucks.

[etrader]

I’ve chucked 3k at their shares at 8c just to tick in the bottom draw but from an outside perspective it appears they’re putting on reasonable growth in their South Island focused business.

From an article they released it showed revenue around 18 mill PA and possible 26 mill by year end 31march, as they were a compliance backdoor listing the detail wasn’t massive but certainly they’re focused on the regions outside christchurch but to date nothing in the north


I have been very slow picking up on them.Until they were listed I thought they were part of Waste Management,so I am only now noticing their trucks.

[Ricky-bobby]

I’ve chucked 3k at their shares at 8c just to tick in the bottom draw but from an outside perspective it appears they’re putting on reasonable growth in their South Island focused business.

From an article they released it showed revenue around 18 mill PA and possible 26 mill by year end 31march, as they were a compliance backdoor listing the detail wasn’t massive but certainly they’re focused on the regions outside christchurch but to date nothing in the north

Thanks for the Nelson update. I have grabbed a couple to see how they go. There is plenty of 💵 in waste!!

[whatsup]

Wasteco have conditionally purchased a family owned road sweeping business in Nelson for 900k plus $100k for the road sweeping truck, this will give them a foothold into nelson and allow some of their team to move into that area and roll out more offerings within the region

Et, yes and that wont be the last one from the preso that they gave at the EGM there will be plenty more to come in the S I, small to medium companies who need a exit strategy and WCO provides that and the normal business growth will add to their revenue .

[whatsup]

I wonder if there are any opportunities in the devistation for wasteco even though its a S I company, great opportunity to buy a small N I waste co and expand its base imo?

[ralph]

I wonder if there are any opportunities in the devistation for wasteco even though its a S I company, great opportunity to buy a small N I waste co and expand its base imo?

Naughty but that's Business !who dares wins

[Ricky-bobby]

https://businessdesk.co.nz/article/politics/government-announces-new-waste-strategy-including-standard-recycling-and-organic-collection-in-urban-areas Should benefit these guys…

[Entrep]

https://i.imgur.com/f2WGL1X.png

[Relaxed]

Hi Entrep
which broker is that depth from?
and
it does look like not a lot of buyers :)

[Sideshow Bob]

Further expansion

https://www.nzx.com/announcements/411645

Conditional acquisition of Cleanways business and assets

WasteCo Group Limited (NZX: WCO) advises that its wholly owned operating subsidiary, WasteCo NZ Limited (WasteCo NZ) has entered into a conditional agreement to purchase the assets and business of Cleanways (2003) Limited and related companies, Enviro South (2015) Limited and Wastech Services (Central Otago) Limited (Acquisition).

Cleanways and Enviro South are based in Invercargill and specialise in bulk liquid waste, providing a range of services across Southland.

Wastech Services is based in Cromwell and specialises in the removal of all bulk liquid and solid waste, providing services throughout the Central Otago region.

The total purchase price for the Acquisition is $7.35 million (plus GST, if any).

• The purchase price will be partially satisfied by the issue of 31,850,353 new WCO shares to the Cleanways shareholders ($2.205 million).
• The balance of the purchase price, $5.145 million, will be payable in cash on settlement.

While WasteCo NZ has completed due diligence in respect of the Acquisition, the transaction is conditional on specific third party arrangements, including a minimum number of existing employees accepting WasteCo NZ's offer of employment, and acknowledgments from major customers and suppliers to the businesses. The conditions are due to be satisfied by 29 May 2023.

Settlement of the Acquisition is scheduled for 1 June 2023.

Please see attached release for full details.

[Rawz]

The new shares issued at 6.9 cents?

$2,205,000/31,850,353= $0.069

Was wondering why the Sp was falling back on the news.

On the watchlist

[etrader]

Cleanways 2003 Ltd was purchased from Neil Walker in 2003. Previously known as simply Cleanways, the business has been Southland owned and operated for over 30 years. At the time of purchase, the late Ray Phillips and sons Wayne, Craig and Lloyd were all working for Southern Transport, having spent just shy of 100 years in total working for the company.

There had been significant dialogue between Ray and Neil over many months as Neil serviced the waste sumps at Southern Transport. Ray indicated an interest in the business if it ever became available.

On September 3, 2003 the business was purchased from Neil and Craig left Southern Transport to run it. Neil stayed on in the business temporarily to show Craig the ropes.

Originally Cleanways had just the two trucks and two staff – today they have 21 trucks, including: 5 hydro excavation trucks, 6 vacuum trucks, 6 water carrier trucks and 4 bulk liquid trucks; and 22 drivers and a manager.

Dealing specifically in liquid waste, the primary contract for Cleanways was Fonterra. This was a large contract and was the company’s main source of business. This contract was supplemented by smaller businesses sumps, septic tanks from the rural sector and dairy work.

The original plan for the Phillips’ was to create a business in order to control their own future. It was never anticipated back in 2003 that the business would grow to the size it is today, however opportunities arose and the family took them all in their stride.

Wayne moved to Cleanways from Southern Transport to join Craig driving trucks for the liquid waste side of the business which continued to expand. The company slowly picked up additional contracts, including AB Lime when they built the tip at Browns. The water gathered there had to be bought back to the Waste Water Treatment Plant in Invercargill, providing further growth to the bulk liquid waste side of the business.

Rapid Water and South Oil were acquired in 2006. Lloyd joined the team to run South Oil and man the phones for Cleanways. These two acquisitions helped expand Cleanways market, with South Oil specialising in the removal of oil and application of the same for dust suppression on roads etc.

Rapid Water was acquired as a further extension to the company. Particularly busy throughout the warmer months, Rapid Water water carriers can deliver with a 24-hour service, no call out charge and the ability to carry anything between 5,000 and 30,000 litres.

They complete both household and farm water deliveries and can even clean your water tank, whether your household tank or the fresh water tank on your farm.

Wastech Services was established in 2013, following the Christchurch earthquakes. Originally a joint venture with Timaru-based Wasteaway South Ltd, the business was opened in Dunedin in 2013 and Central Otago in 2015 and specialises in the removal of all liquid and solid waste.

2016 saw the launch of Southern Logistics. This business was born following a successful contract between Agrifeeds and Cleanways carting molasses for the lower South Island area. As a result of this relationship, Cleanways were offered the contract for the whole of the South Island. A second joint venture was required to service the whole area and Southern Logistics was born.

Finally, Invercargill Mowing Services (iMow) is the latest business established under the Cleanways name. With two staff, one full-time and one part-time, iMow are contracted to complete both weed spraying and mowing of centre plots and road verges throughout Invercargill city.

A family owned and operated business with the Phillips brothers Lloyd, Craig and Wayne at the helm, you can be assured of both their experience and capability when you call to inquire about any one of their services..

[bull....]

brought some today ... put in bottom draw see what happens

[silverblizzard888]

I like the direction they are going in, but until I see their lately financials its a tough one to value given they are in so much debt. Only have to look at Synlait to see what a combo of bad business and maturing debt obligations can do to the sudden future of a company.

[mshierlaw]

I like the direction they are going in, but until I see their lately financials its a tough one to value given they are in so much debt. Only have to look at Synlait to see what a combo of bad business and maturing debt obligations can do to the sudden future of a company.

Good opinion. The next Tegal?

[Rawz]

https://www.nzx.com/announcements/412235

we have some financials.............

look terrible. insolvent. debt through the roof. fcf negative. loss making. did i miss anything? only looked at them for 2mins... lol

[Rawz]

this is grossly overpriced imo.

I calculate a 12x ev/ebitda multiple

[silverblizzard888]

If there were words to sum up their financials the words that come to mind would be "A WHOLE LOT OF NOTHING". There's a lot of growth in revenues being the positives, but then it doesnt look like its translated to any financial gain. Perhaps in the future some sort of synergies happen that translates more to the bottom line.

Theres the massive drawbacks in the massive debt continuing to be piled onto the company, which carry with it hefty interest payments. Obviously theres a lot of non-cash items being deducted like depreciation, share based payments and one off costs for the public listing that makes the loss not much of a loss. The business just hangs in the balance that requires the business to be steady or hell would break loose. Almost seems like they are in the business of being in business, until one day they become Amazon and start a cloud servicing business that makes mega profits.

At $52 million mcap its all risk and barely any reward on offer, at least not until it looks apparent that they can easily manage their debt.

[bull....]

dont know what the previous 2 on about ?

not the end of the world senario those 2 paint

300k loss for yr if you remove listing costs
hasnt accounted for cleanaways aquisition in financials that be this new yr
5m in current liabilities is for cleanaways aquisition in current accounts

would be good if they provided more financial details in aquisition notices though esp if they have some lined up soon as they suggest

[winner69]

Raising capital ….trading halt

Probably need in excess $10m to make balance sheet a bit more ‘respectable’ ..but really needs a lot more if going to acquire more things

No doubt retail investors will end up heavily diluted

[bull....]

Raising capital ….trading halt

Probably need in excess $10m to make balance sheet a bit more ‘respectable’ ..but really needs a lot more if going to acquire more things

No doubt retail investors will end up heavily diluted

think they alluded that they have some aquisitions lined up at the results announcement so may be for that

they should do a stock consolidation at some stage if they are going to raise more capital for aquisitions down the track

here's the announcement just saw it

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WCO/412857/396267.pdf

they going to do SPP as well

[Rawz]

Glad they are raising capital. Looks like they were about to tip over.

And hey, thats the reason they listed- to access capital. Nothing wrong with that

[whatsup]

Glad they are raising capital. Looks like they were about to tip over.

And hey, thats the reason they listed- to access capital. Nothing wrong with that

Raw, please elaborate - tip over, why would the make a takeover to the two operations last week and why would the vendors accept if that was the case ?

[Rawz]

Raw, please elaborate - tip over, why would the make a takeover to the two operations last week and why would the vendors accept if that was the case ?

I didnt think the recently released financials made for good reading. Just the balance sheet looked very week and the free cashflow was negative

[silverblizzard888]

To sum it up the company's just working on a really tight balance sheet, they aren't in imminent danger, but every move they make requires extra capital raising. They are servicing their debt no problem at the moment, but they either had to raise more money to continue expanding for more cashflow or to pay down debt. Its the type of company that can't slow down or the valuation takes a massive dive. Its a good opportunity to raise more capital while they're riding high, even at 6.5 cents (compared to market 7.5cents) they are getting a good deal and maximizing their value proposition to boost their balance sheet. After the capital raise and a few more acquisitions the risk lowers as their positioning to service their debt is better, its a good use of being a public company. I'm still on the edge for the company; I really like what they do, I think their growth is amazing, but the share price and debt doesn't allow for any margin of safety.

[bull....]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WCO/412918/396334.pdf

raised just over 4m .. pretty good outcome with an institution on boarding as well

to be used for working capital and aquisitions .... not debt reduction as some were thinking

[winner69]

March 30th debt was $21.2m and shareholder equity $9.9m

Since then paid $5.2m cash for Cleanways acquisition and got $6.5m new capital (new shares for Cleanways acqusition and the capital raise)

So roughly debt/equity position much the same as back in March and pre Cleanways

Seems if they acquire more things more new capital needed

Wonder how much they tap shareholders for in the SPP

[silverblizzard888]

The extra $4.32million combined with offer of shares in new acquisitions should allow them another $5-7 million in more acquisitions unless they decide to spend a good portion on buying equipment to grow existing businesses. It should help propel the business revenues for FY24 to $50-60 million, which would be some good growth. Expecting another capital raise in another 6 months time after they use all the money to further their growth and align new acquisitions with the existing main business structure and brand. My valuation on a per share basis is about 5.6 cents. They would need to show stronger improvement in operating profit and cashflow to warrant a higher value in my books.

[whatsup]

March 30th debt was $21.2m and shareholder equity $9.9m

Since then paid $5.2m cash for Cleanways acquisition and got $6.5m new capital (new shares for Cleanways acqusition and the capital raise)

So roughly debt/equity position much the same as back in March and pre Cleanways

Seems if they acquire more things more new capital needed

Wonder how much they tap shareholders for in the SPP

They must have told a " good " story to the insto as they are pretty stingy to get money from unless they see this as a growth stock if that is the case they will be hitching their waggon to WCO with its perceved need of funds to acquire S I companies for growth.
This says to me that WCO will roll up the S I waste companies wanting to exit the industry for retiring share holders and then in to long term it will be acquired once it has done that job by a big waste company, interesting future here imo.

[bull....]

They must have told a " good " story to the insto as they are pretty stingy to get money from unless they see this as a growth stock if that is the case they will be hitching their waggon to WCO with its perceved need of funds to acquire S I companies for growth.
This says to me that WCO will roll up the S I waste companies wanting to exit the industry for retiring share holders and then in to long term it will be acquired once it has done that job by a big waste company, interesting future here imo.

yep its happening in other industries already in NZ , so that's my pick too

[winner69]

Have they acquired something?

Consolidation in industry inevitable and one day Wasteco might be consolidated as well.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WCO/416165/400156.pdf

[barney]

They did signal a share placement plan for existing shareholders a couple of months back so it could be something to do with that.

[bull....]

Have they acquired something?

Consolidation in industry inevitable and one day Wasteco might be consolidated as well.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WCO/416165/400156.pdf

so you agree with whatsup and bull

[bull....]

They did signal a share placement plan for existing shareholders a couple of months back so it could be something to do with that.

looks more like an aquisition to me , they may tie the sp plan in with the announcement

[Entrep]

Will be an acquisition by WCO

[whatsup]

looks more like an aquisition to me , they may tie the sp plan in with the announcement

I thought that the S P ann was to be at the AGM.

[silverblizzard888]

Probably one last acquisition and capital raise before the AGM, might as well get the shareholder approval while everyone's gathered in one spot.

[Southern Lad]

The Companies Office details Bond Contracts Ltd is currently owned half each by H W Richardson Ltd and Trojan Holdings Ltd (the later being the Davies Family of Queenstown). Both very astute business families who hold onto good businesses so my assumption is that either the business faces uncertain times or the price was too way good to refuse. No suggestion the vendors are taking part of the purchase price in WatseCo scrip.

The announcement on Friday raises the risk of the contracts not being renewed in 2027. There are plenty of large players in the Waste collection and transfer station operator businesses (including Envirowaste and Waste Management) so any contract is likely to be very competitive. Local Authorities generally have robust and transparent procurement processes, so unless there are renewal rights in the current contract it’s difficult to see WasteCo screwing the scrum with early engagement. Further, they’ve told their competitors what they are up to. Hopefully WasteCo has a contingency plan if the contracts aren’t renewed and there is some high quality plant that can be readily redeployed and they’re not just buying goodwill on a contract that has less than four years to run.

ps - Southlanders are very parochial.

[silverblizzard888]

Raising $3m for acquisition in invercargil company BCL's waste collection business as reference above by Southern Lad its a purchase from Bond Contract ltd

Total acquisition price is $8.775m. Rasing at 6.5 cents, $2.5m to shareholders and $0.5m to private.


About the business:

"The business being acquired provides waste collection services and operates transfer stations in Southland under a contract with the Invercargill City Council, Southland District Council and Gore District Council (together referred to as the 'WasteNet' Councils). This contract runs until 30 June 2027. WasteCo intends to proactively engage with the WasteNet Councils and participate in subsequent negotiations and tender opportunities for the WasteNet Councils contract beyond 2027."

[winner69]

Raising $3m for acquisition in invercargil company as reference above by Southern Lad its a purchase from Bond Contract ltd

Rasing at 6.5 cents, $2.5m to shareholders and $0.5m to private.

Total acquisition price is $8.775m

About the business:

"The business being acquired provides waste collection services and operates transfer stations in Southland under a contract with the Invercargill City Council, Southland District Council and Gore District Council (together referred to as the 'WasteNet' Councils). This contract runs until 30 June 2027. WasteCo intends to proactively engage with the WasteNet Councils and participate in subsequent negotiations and tender opportunities for the WasteNet Councils contract beyond 2027."


It’s a $8.7m acquisition, a $3m cap raise so balance coming from debt

Did raise $4m a few months ago for the Cleanway acquisition

Next Balance Sheet will look interesting

Sorry …was in reply to your abbreviated post which you added to with these details

[silverblizzard888]

It’s a $8.7m acquisition, a $3m cap raise so balance coming from debt

Did raise $4m a few months ago for the Cleanway acquisition

Sorry …was in reply to your abbreviated post which you added to with these details

Fair enough I was browsing the news and saw the article and didn't see anyone post anything on the NZX releases so thought it was a snippet of new information, didn't pay attention that they had already released NZX anouncements on the full details before posting, amateur's mistake on my behalf.

[Rawz]

So it’s trading about 1x proforma revenue and 10x proforma EBITDA. Nothing to get excited about

Shareholders funding all the growth as well.

We saw with DGL the margin pressure they came under after trying to merge all the acquisitions into the mothership. It’s not an easy task. You got to realize most of these businesses they are buying are owner operator lead and sometimes don’t work in a corporate environment with firm structure and policies. The owner operators are usually the main reason the business works.

I like the industry but won’t be investing until they can prove these roll ups are contributing to the bottom line. This will likely be a few FY audited accounts away..

[percy]

So it’s trading about 1x proforma revenue and 10x proforma EBITDA. Nothing to get excited about

Shareholders funding all the growth as well.

We saw with DGL the margin pressure they came under after trying to merge all the acquisitions into the mothership. It’s not an easy task. You got to realize most of these businesses they are buying are owner operator lead and sometimes don’t work in a corporate environment with firm structure and policies. The owner operators are usually the main reason the business works.

I like the industry but won’t be investing until they can prove these roll ups are contributing to the bottom line. This will likely be a few FY audited accounts away..

Very much how I see this company too.
While revenue is growing it will come down to earnings per share growth.

[whatsup]

With todays trading @ .071ish and the SPP @ .065 that imo is a vote of confidence or am I missing something ?

[Rawz]

With todays trading @ .071ish and the SPP @ .065 that imo is a vote of confidence or am I missing something ?

less than $2k traded

[whatsup]

So who is partaking of the SPP ?

[winner69]

With todays trading @ .071ish and the SPP @ .065 that imo is a vote of confidence or am I missing something ?

Wondered at the time whether this ‘vote of confidence’ was just a ploy to make the SPP a thing not to be missed …just speculation on my part of course

Anyway just over $1.2m was raised in SPP from shareholders and underwriters taking up another $1.2m worth of shares.

Let’s see what happens next

[silverblizzard888]

The acquisition of BCL brings revenue count pass $50m, adding $15.9m revenue and $4.4m EBITDA

Net debt will be $26.9m

Question is do these guys have a plan on how they're going to reduce debt or just acquiring till its a problem?

[Rawz]

The acquisition of BCL brings revenue count pass $50m, adding $15.9m revenue and $4.4m EBITDA

Net debt will be $26.9m

Question is do these guys have a plan on how they're going to reduce debt or just acquiring till it’s a problem?

How does EBITDA of $4.4m pay debt of $26.9m?? I’d say it’s a problem now if those numbers are true

[BlackPeter]

Been yesterday at the AGM (as a proxy holder) ... and it was not for the pies and sausage rolls.

Small crowd (maybe 25 ... 30 including board, staff and a handful of independent shareholders). Short talks emphasizing the growth so far, but this has been released to the NZX anyway:

https://www.nzx.com/announcements/417883

So, no need to reiterate. My impressions: board and management humming full of enthusiasm - however either not willing or not able to tell a story around future opportunities other that there are plenty.

Plenty of quesitons around future plans and opportunities, however very little substance in response. Clear is however, they see lots of opportunities and will need lots of shareholder funds to cease them.

Talked with most board members and they all feel like real people, understanding their trade. It feels however as well a little bit like they didn't yet made the mental step from a private run company to a listed company.

Best futurelooking statements I could get out of them have been fragments like "it will be a long story" (presumably until return of shareholder funds).

Lots of enthusiasm and optimism, but what I was missing was a concise story like: Waste market in NZ is worth xxx m$, we have currently y% of that and plan to grow in z years to a market share of VV %. Expect break even in OO yearw, and this is the plan to get there.

Clearly - an industry with plenty of opportunities, and the current board has as well some capable industry insiders (coming from a small company perspective) as well as some board members with a large company perspective (but from different industries - finance, food and pharmaceutical).

Not sure though, whether they have so far people understanding the fundamental shift a company needs to undertake to move from small (some hundred staff) to big (some thousand staff).

Anyway - nice crowd and I wish them all success they can get. Hope they learn soon how to tell a great story to help the right investors to get involved.

On the way home I passed (early Friday afternoon) the WasteCo depot in Blenheim Road and wondered why their carpark was full of their trucks ... but they probably get up early and did their days work already ...

Discl: not holding and not yet sure, whether I have enough info to change that.

[Cabinet]

Thanks for that BlackPeter, always interesting to hear from someone who was actually at the meeting. I have a very small holding which I bought at 6c but have no plans, as yet, to top up.

[Rawz]

Good work BP, good summary, very helpful post

[Sideshow Bob]

https://www.stuff.co.nz/southland-times/300965279/wasteco-to-acquire-invercargillbased-bond-contracts-ltd-waste-business-for-87-million

[BlackPeter]

https://www.stuff.co.nz/southland-times/300965279/wasteco-to-acquire-invercargillbased-bond-contracts-ltd-waste-business-for-87-million

Interesting - well, its obviously not news - all the info has been released more a month ago:

https://www.nzx.com/announcements/416225

... but I am wondering why stuff tries to sell it as "new" - slow news day or do they really need more than a month to process a quite simple NZX announcement?

[Ricky-bobby]

https://businessdesk.co.nz/article/markets/the-rapid-rapid-growth-of-wasteco “That’s money” haha live it

[percy]

I drove past their Blenheim Road yard on Monday.
I lot of expensive vehicles sitting there idle.
Idle vehicles are not generating income.

[Ricky-bobby]

Might be in there busy sorting rubbish Percy!

[percy]

Might be in there busy sorting rubbish Percy!

Big trucks/equipment sitting idle would take a huge amount of profitable rubbish to fund.
Would be interesting knowing what % of their fleet is working on any day.
OK their fleet does look good.

[bull....]

they should do a share consolidation

[BlackPeter]

I drove past their Blenheim Road yard on Monday.
I lot of expensive vehicles sitting there idle.
Idle vehicles are not generating income.

Funny, I made the same observation on a recent Friday early afternoon after the AGM. Somebody needs to find out at which times they actually employ their expensive vehicles ...

[BlackPeter]

Big trucks/equipment sitting idle would take a huge amount of profitable rubbish to fund.
Would be interesting knowing what % of their fleet is working on any day.
OK their fleet does look good.

Their fleet looks good, this is true. Some would say - much better than their books ...

[BlackPeter]

they should do a share consolidation

Agree. They mentioned that at the AGM, but I didn't got the impression its high priority for them.

[bull....]

Agree. They mentioned that at the AGM, but I didn't got the impression its high priority for them.

thats good they are thinking about it. better to raise more funds for aquisitions at a dollar than 6c

[Sideshow Bob]

https://www.nzx.com/announcements/421072

WasteCo has raised $1 million from a share placement to a wholesale investor in New Zealand.

The wholesale investor has subscribed for new shares in WasteCo at a subscription price of 6.5 cents per share. The funds raised from the share placement will be used to support the growth of the company's existing businesses and to assist with future growth opportunities.

Settlement and allotment of the new shares under the private placement is expected to occur on 6 November 2023.

The WasteCo board is in discussions regarding further share placement to other wholesale investors to raise up to an additional $2 million.

[whatsup]

https://www.nzx.com/announcements/421072

WasteCo has raised $1 million from a share placement to a wholesale investor in New Zealand.

The wholesale investor has subscribed for new shares in WasteCo at a subscription price of 6.5 cents per share. The funds raised from the share placement will be used to support the growth of the company's existing businesses and to assist with future growth opportunities.

Settlement and allotment of the new shares under the private placement is expected to occur on 6 November 2023.

The WasteCo board is in discussions regarding further share placement to other wholesale investors to raise up to an additional $2 million.

Wonder who it was , insiders ( who can be sophs ) or who?

[bull....]

Wonder who it was , insiders ( who can be sophs ) or who?

and more who's in the pipeline they say. lining up another aquisition ?

[percy]

Outlook
WasteCo is well-positioned for continued growth, with strong market positions in its
chosen sectors and the recent business acquisitions positively contributing to the
Group. In addition to the growth within existing businesses there continues to be
compelling acquisition opportunities in the South Island. The Group expects to
report an EBITDA result for the second half of FY24 in the range of $4.0million -
$4.5million on revenue in excess of $25million.

The above commentary on today's interim.
I thought it was a terrible result.Current liabilities of $21,847,000 far exceed current assets of $9,106,000
Total assets of $68,638,000 are only supported by $17,859,00 of equity,ie equity ratio of just 25.64%.Negative cash flow from operations was $899,000 while the loss for the period was $1,097,000.

[Sideshow Bob]

Outlook
WasteCo is well-positioned for continued growth, with strong market positions in its
chosen sectors and the recent business acquisitions positively contributing to the
Group. In addition to the growth within existing businesses there continues to be
compelling acquisition opportunities in the South Island. The Group expects to
report an EBITDA result for the second half of FY24 in the range of $4.0million -
$4.5million on revenue in excess of $25million.

The above commentary on today's interim.
I thought it was a terrible result.Current liabilities of $21,847,000 far exceed current assets of $9,106,000
Total assets of $68,638,000 are only supported by $17,859,00 of equity,ie equity ratio of just 25.64%.Negative cash flow from operations was $899,000 while the loss for the period was $1,097,000.

Certainly seems short of cash and need acquisitions to start generating some margin.

Expect their interest costs will be ramping up as well - need a good dose of capital.

Incidentally, saw a branded WasteCo truck go past work the other day - looked pretty flash.

[whatsup]

.05 atm another of Shauns great rebirths ( MEE ) is this one headed for where ..... ?

[Sideshow Bob]

Sometimes change of auditor can be a red flag, but moving to Big Four?

https://www.nzx.com/announcements/425688

The Board has resolved to appoint Deloitte Limited as the group's new external auditor with effect from the same date for the financial year commencing 1 April 2023.
WasteCo Group Limited (NZX: WCO) advises that it has accepted the resignation of Baker Tilly Staples Rodway as external auditor of the group with immediate effect from 2/02/2024.

The Board would like to thank Baker Tilly for its service and support of the company, particularly during the company's acquisition of the WasteCo business and the transition of that business to the NZX.

[Ricky-bobby]

It’s such a bloody outrages cost, FairPlay for shopping around! I hear Deloitte are one of the better ones as well.

[whatsup]

under .05 atm another ATL !!!!

[Sideshow Bob]

New Captain at the helm....and an update.....

https://www.nzx.com/announcements/425899

WasteCo Group Ltd (WasteCo or WCO) is pleased to announce the appointment of David Peterson as its Chief Executive Officer (CEO), effective February 26, 2024. David brings a wealth of experience across diverse sectors, including engineering, manufacturing, logistics, and project management, to lead WasteCo's growth ambitions in the New Zealand waste sector.

Experienced Leader Joins WasteCo

David holds a Bachelor of Engineering (Civil) with honours from Canterbury University and boasts a successful track record in leading large teams and driving results. He has held senior positions in both listed and unlisted companies in New Zealand and Australia. Notably, he served as General Manager Concrete across Victoria (Australia) for Boral Construction Materials, overseeing 40 sites. Previously, he led General Cable’s operations as Managing Director for Oceania and China and held key roles across the Fletcher Group, including managing the Christchurch earthquake recovery business.

Strong Skills for the Future

WasteCo Chairman Shane Edmond welcomes David, stating, "David's diverse skillset, including his strong analytical and engineering background, and broad and deep operational experience in senior roles perfectly aligns with the exciting opportunities WasteCo has in the New Zealand waste sector. We are confident he will provide the leadership and vision to capitalise on these opportunities and drive sustainable growth for our company." David and his family are excited to return to Christchurch, where they previously lived.

Smooth Transition and Continued Expertise

As previously announced, James Redmayne, co-founder and current CEO, will transition to a new role within the company as General Manager Business Development with effect from 26 February 2024. This transition will enable James to move away from day to day leadership into a strategic executive role while ensuring continuity and maintaining valuable knowledge within WasteCo. James's experience and support will be instrumental as WasteCo transitions to new leadership and executes its growth plans in the coming years. James will also continue in his role as a director on the board of WasteCo.

Positive Trading Update

WasteCo is pleased to report on the successful integration of the businesses it acquired in Southland during 2023. The businesses of Cleanways and Enviro South (trading as Cleanways and specialising in bulk liquid waste and potable water delivery) and Wastech Services were acquired in June 2023, while the business of Bond Contracts Limited (BCL) was acquired in October 2023. BCL provides waste collection services and operates transfer stations in Southland under a multi-year contract with the Invercargill City Council, Southland District Council and Gore District Council. Both acquisitions are trading strongly, have expanded the WasteCo service offering across the group and leverage WasteCo’s capability into new sectors in Southland, meeting customer needs for solution-based approaches. Additionally, recent management changes across the group have led to improved operating performance. While only part way through the second half, the operating EBITDA expectations of $4-$4.5 million (6 months) announced at the half-year mark remain on track.

Looking Ahead

WasteCo remains focused on exploring new growth opportunities and acquisitions in 2024. The company will provide further updates as it progresses on this exciting journey.

About WasteCo

WasteCo is a leading South Island waste solution company, processing and diverting liquid and solid waste from landfill. It provides comprehensive solutions for household, commercial, industrial and local authority customers.
WasteCo is New Zealand’s only diamond certified Toitū Enviromark waste solutions provider and delivers outcomes that ensure its customers are at the leading edge of the sustainability frontier.
The company provides waste and sorting options as well as waste remediation, sweeping and industrial cleaning services – all delivered using leading edge technology and highly trained customer-focussed staff.
The Christchurch-based business was established in 2013.
www.wasteco.co.nz (http://www.wasteco.co.nz)

[Sideshow Bob]

https://www.nzx.com/announcements/428771

WasteCo is pleased to announce the successful issue of convertible notes, raising $3m from a number of wholesale investors. This strategic funding will bolster WasteCo’s operations, specifically aimed at:

- Expanding Recycling Capabilities: Enhancing our facilities to increase recycling throughput and efficiency
- Investing in Technology: Increasing our capability to divert waste from landfill
- Operational Growth: Extending our reach with customer service improvements.

The notes, maturing on 15 October 2025, offer holders the flexibility to redeem for cash or convert to WCO shares at $0.05 each, prior to maturity. With an annual interest rate of 10%, payable quarterly, these notes represent a robust investment in our sustainable growth. CM Partners played a pivotal role in the implementation of this note issue, reflecting confidence in WasteCo’s vision and operational plans.

[whatsup]

ATL ( low ) today, when will she turn ? ( Im sure that there is a song some where here ?