Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn
About

News

Bingo profit slides 25pc on housing slump

AAP  |  26 Feb 2019Text size  Decrease  Increase  |  
Email to Friend

Waste manager Bingo Industries (ASX: BIN) has confirmed a half-year earnings hit as the nation's property downturn sends ripples through the building industry.

Net profit for the six months to 31 December fell 25 per cent to $13.4 million, down $4.4 million from a year ago, despite revenue for the period jumping 24.4 per cent to $176.4 million.

Bingo flagged the slump this month on weak building waste growth, with full-year underlying guidance cut to $92 million to $96 million from initial predictions of $108 million to $112 million.

The company's share price effectively halved on the warning.

Bingo's proposed acquisition of Dial-a-Dump also hangs in the balance, pending a decision by the consumer watchdog, which is due to deliver its findings on Thursday.

The company indicated on Tuesday its underlying earnings margin was down 25.5 per cent, a further 200 basis points below forecast, driven lower by a number of sites being offline for redevelopment, lower margins in the Victorian business and a faster than anticipated softening of the residential market.

"The group has seen increased market competition that led to reduced prices whilst increased costs have reduced margins," the company said in a release.

Bingo's total costs for the half grew by 36.1 per cent to $157.6 million on increased volumes, tipping costs, fuel and toll fees, as well as staffing and machinery expenses.

Nonetheless, managing director and chief executive Daniel Trask said the outlook remained positive, and that FY20 would be "transformational" for Bingo.

"We expect to see the benefits from the significant capital outlay over the last 12 months on our redevelopment program as our key assets come back online, most notably our recycling and landfill asset at Paton's Lane and our advanced recycling facility in West Melbourne," Mr Trask said.

"We also expect the introduction of a QLD levy to be positive for our business and there will be a Bingo price increase early in FY20 to offset increased operating costs experienced in FY19.

Bingo will pay an interim dividend of 1.72 cents a share, fully franked.

Shares in the company were trading 6.05 per cent higher at $1.3575 at 1120am today, still down 41 per cent from $2.30 before the earnings downgrade.

BINGO FIRST-HALF PROFIT IN THE DUMPS

  • Net profit down 25pct to $13.4m
  • Revenue up 24.4pct to $176.4m
  • Maiden interim dividend of 1.72 cents per share, fully franked

 

provides Morningstar with market news.

AAP logo

© 2020 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

Email To Friend