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FY20 report: Cleanaway Waste Management (ASX:CWY) cleans up

Cleanaway Waste Management Ltd (ASX: CWY) delivered a solid result, once again proving that both recycling and waste disposal are among the most defensive businesses in the world.

Before we dig into the results, here’s a video I recorded with Owen Raszkiewicz last week. We covered four of the most popular ASX reports of the week. Stay tuned for our next video on Rask Media this Friday.

My take on the Cleanaway result

As noted by CEO Vik Bansal, COVID was able to “highlight the defensive characteristics of our revenue streams”.

Cleanaway reported a small increase in revenue by 2.1% to $2.3 billion. The core Solid Waste division grew revenue by 0.8% and the expanded Liquid Waste & Healthcare Services increased 3.8%, offsetting a slowdown in the more specialised and lower-margin Industrial and Waste division, down 8.4%.

The result was an 8.7% increase in profit on an underlying basis to $153 million and a 10% increase in the final dividend to 2.1 cents per share. This takes full-year dividends to 4.1 cents per share, up 15% compared to FY19.

Management continues to push forward on its strategy to consolidate an extremely fragmented industry, delivering stronger profit margins in the process, moving 0.6% higher to 12%, as the company gains additional efficiencies.

The acquisitions of Toxfree and SKM have been successfully integrated, with the company now turning to cleaning up its landfill stations and improving recycling capacity using its $230 million in free cash flow.

My take: Progress being made in integration, recycling tailwind to continue.

In related news, competitor Bingo Industries Ltd (ASX: BIN) delivered its full-year results yesterday, with shares finishing nearly 13% higher.

The Golden Rules of Investing

We might be experts in retirement, but with combined financial advice experience of 35+ years, we’ve nearly seen it all. 

In mid-2023, our senior team at Wattle Partners Financial Planning put the finishing touches on a brand-new report “The Golden Rules of Investing“.

In this free report, we outline the key principles that determine all of the portfolio construction and investment decisions of Wattle Partners. Collated over decades, this paper should be seen as a work-in-progress, constantly under review in light of the ever-evolving nature of markets. 

You’ll find the free report on my Author page. Simply click the button below to view the Golden Rules.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.


Disclosure: Drew Meredith holds Cleanaway shares in his super fund.

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Wattle Partners is a financial advice firm, servicing clients around Australia, specialising in retirement planning (pre and post retirement). 

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