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Bingo (ASX:BIN) just reported a 41% plunge in profit, shares down

Bingo Industries Ltd (ASX: BIN) shares are down right now after reporting its FY21 half-year result.

Bingo is one of Australia’s largest waste management businesses.

HY21 result

Bingo said that its underlying revenue fell by 3.1% to $241.1 million. The company said that there has been a softening in Bingo’s addressable markets as a result of COVID-19.

There was lower pricing across B&D collections cube rates and post-collections in NSW, which was required to attract volume. However, there was strong year on year growth in NSW post collections volume to support its increased network capacity.

Underlying EBITDA (EBITDA explained) fell by 20.5% to $65.2 million. The underlying EBITDA margin declined 600 basis points (6.00%) to 27%. As well as lower pricing, Bingo paid around $0.7 million for COVID-19 related labour expenses and the VIC lockdown disruptions, together with impacts on revenue opportunities.

Bingo’s underlying net profit after tax (NPAT) dropped 41.2% to $16.7 million and operating free cash flow declined 41.2% to $64.2 million.

The net debt reduced by 1.2% to $317.4 million. This was achieved despite the company’s continuing capital expenditure program for growth.

Bingo dividend

The board of Bingo decided to declare an interim dividend of 1.5 cents per share.

Management comments

Bingo CEO and managing director Daniel Tartak said: “We expect to benefit from the strong infrastructure pipelines in NSW and VIC, before a recovery in the residential and non-residential markets over the medium term. C&I volumes are also set to increase with reduced restrictions and the wider workforce moving back to offices in the short term.”

We have built a sustainable business with a low cost of operations, which has allowed us to continue to generate industry leading margins. We have continued to gain post-collections market share in a declining market and are well positioned to emerge from the COVID-19 environment as a bigger, better and stronger business.”

Outlook

Bingo said that market conditions have held up better than first anticipated and greater certainty around outlook together with the pipeline of opportunities supports a broader recovery going into FY22.

This is good news for Bingo and shareholders. The Bingo share price has recovered to its former heights, so I’m not sure that it’s a clear buy today. But it could be one to watch for the long term.

Before you consider Bingo, I suggest getting a free Rask account and accessing our full stock reports. Click this link to join for free and access our analyst reports.

Is BNPL the opportunity of a lifetime or is the sector a ticking time bomb?

Rask's analyst has just finished a 7,500-word report, The Ultimate BNPL Sector Report, taking a deep dive into this booming ASX sector. It shines a spotlight on each of the major players. You can get the full analyst report for FREE by CLICKING HERE NOW or entering your email below.

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Afterpay, Zip Co, Sezzle…

Is BNPL the opportunity of a lifetime or is the sector a ticking time bomb?

Rask's analyst has just finished a 7,500-word report, The Ultimate BNPL Sector Report, taking a deep dive into this booming ASX sector. It shines a spotlight on each of the major players. You can get the full analyst report for FREE by CLICKING HERE NOW.

Note: the report is 100% free.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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Rask Media’s Ultimate BNPL Sector Report

Afterpay, Zip, Sezzle… is this the opportunity of a lifetime? Or is BNPL a ticking time bomb? This 7,500-word analyst report takes a deep dive into the BNPL sector and shines a spotlight on each of the major players in this booming market. 

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As we emerge from COVID-19, some tech companies are growing faster than ever. Rask’s investment analysts have identified 3 growth stocks set to benefit. Big time.

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