Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

Cleanaway (ASX:CWY) delivers 75% profit growth, share price on watch

The Cleanaway Waste Management Ltd (ASX:CWY) share price will be on watch today after reporting a high level of profit growth in its HY21 result. 

The Cleanaway Waste Management Ltd (ASX: CWY) share price will be on watch today after reporting a high level of profit growth in its HY21 result.

Did Cleanaway announce trash or treasure in HY21?

Cleanaway’s top line didn’t demonstrate much growth, its revenue was essentially flat at $1.07 billion. There was higher revenue in the solid waste services segment, offset by lower revenue in the industrial & waste services and liquid waste & health segments.

In solid waste services, it benefited from the commencement of the City of Casey (Melbourne’s largest municipality) and the South Australian Council Solutions contracts, partially offset by COVID-19 affected activity across Melbourne together with lower business activity in Queensland and the Sydney CBD.

But there was growth at the various profit lines.

Underlying EBITDA and EBIT (EBITDA and EBIT explained) went up by 2.9% and 3.9% to $263.8 million and $132.2 million respectively. The EBITDA margin improved by 60 basis points (0.60%) to 24.6% and the EBIT margin improved 50 basis points (0.50%) to 12.4%.

Underlying net profit after tax (NPAT) grew by 6.5% to $79 million, though underlying profit / earnings per share (EPS) only increased 2.7% to 3.8 cents.

Due to the fact that statutory profit was much lower last year, it showed much higher levels of growth to reach the numbers in this result.

Statutory net profit grew 75.3% to $79.4 million and statutory EPS went up 65.2% to 3.8 cents.

The operating cashflow grew strongly, going up 28.8% to $202.4 million.

Cleanaway dividend

The board of Cleanaway announced an interim dividend of 2.25 cents per share, representing an increase of 12.5% on the prior corresponding period.

Leadership transition

You may have seen over the past few months that the Cleanaway CEO Vik Bansal was making headlines for the wrong reasons and then he decided to resign last month.

Brendan Gill has commenced in the role of chief operating officer (COO) supporting Mark Chellew as Executive Chairman. Mr Bansal will step down after the half year results investor roadshow.

FY21 outlook

Cleanaway said that the uncertainty in the trading environment continues, with stronger disruption in some regions and industries than others.

However, the company is confident that FY21 underlying EBITDA will be moderately higher than FY20.

Summary thoughts

Cleanaway has produced a decent underlying result in what has been a strange six month period.

I think Cleanaway shares are ones to watch as a defensive idea over the long term because of the desire in Australia for there to be more recycling, which needs advanced facilities like Cleanaway’s to work efficiently.

Before you consider Cleanaway, 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.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

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.

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