Wasteco Group Ltd ---WCO

[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.