EGL aims to double turnover to $100m

While EGL has scored points for its latest PFAS water breakthrough, the market may not fully appreciate the importance of the group's recent move into waste recycling.

Yesterday the group posted a 27pp Investor Presentation. Page 23 of the document reveals that new EGL's waste division is tendering for business valued at ~$50m.

Given that EGL's other four verticals produced a combined turnover of ~$47m in the year to June, the $50m number takes on special significance. It means total turnover may soon double.

Of course, submitting tenders doesn't mean the EGL will win those tenders. Will it score a win rate of 100%, 50% or less?

And what's ahead for 2022?  Will it be submitting more recycling tenders...perhaps to gross $50m+?

EGM's waste management play began on February 8.  That's the day the group appointed a new CEO - Jason Dixon.

Dixon was previously Executive General Manager - Corporate & Risk, with Tox Free Solutions.

Tox Free, with over 1,500 staff and a turnover of $500m, was acquired in 2018  by $CWY/Cleanaway Waste Management for an Enterprise Value of $831m.

Cleanaway now has a market cap of $6b.

Less that three weeks after becoming CEO, Jason Dixon did two things:

1. He signed a tranformative deal with Ireland-based recycling group, Turmec, a deal seems aimed at allowing EGL to quickly emulate Tox Free Solutions.

2. He recruited Paul Gaskett as National Manager – Sales and Marketing. Gaskett had been National Business Development Manager for Cleanaway’s Industrial Waste Services division.

As the EGL's latest Investor Presentation notes:

• EGL holds an exclusive agency agreement in Australia with Turmec to sell and service its world-leading recycling solutions.

• EGL has spent the last six months building the Turmec brand recognition with potential clients in Australia and building product awareness.

• Turmec CEO Geoff Bailey and EGL National Head of Sales Paul Gaskett have recently visited most of the major waste companies.

• Strong interest in the product offering will see EGL submit tenders valued at ~A$50m by the end calendar year 2021.

• Service staff and technicians are being trained to help maintain plants already in Australia and provide spare parts.

• Cross sell opportunities with EGL’s other business lines including TES, TAPC and EGL Water.

Given the waste recycling backgrounds of Jason Dixon and Paul Gaskett, I sense they'll be directing most of this week's $4.75m capital raise into the new waste vertical. Good.