Wasteco Group Ltd ---WCO

**Mr Slothbear** · 19-12-2022, 11:38 PM

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** · 19-12-2022, 11:46 PM

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** · 20-12-2022, 08:41 PM

Originally Posted by 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.

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** · 04-01-2023, 11:13 AM

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** · 04-01-2023, 11:17 AM

Originally Posted by 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.

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

**etrader** · 04-01-2023, 11:26 AM

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** · 05-01-2023, 12:32 PM

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

**etrader** · 05-01-2023, 03:45 PM

Originally Posted by whatsup

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