Updated board and management – An established cleantech player, EGL now has a clear growth strategy under new CEO Jason Dixon. Dixon’s appointment comes as ESG tailwinds support the business’ diverse service and technology offerings for environmental protection. There is attractive shareholder alignment with Dixon’s performance rights and an updated board to oversee strategy execution.
TAPC: Providing rare earth and battery metals exposure – EGL’s air pollution control division, TAPC, is exposed to the rare earth and battery metals sectors through its lithium refinery contracts with FLSmidth and Hastings. TAPC is well placed to capitalise on increasing capital expenditure in these sectors, with the business now operating on vastly improved margins following a recent restructuring by new management.
EGL Waste, turning trash into treasure – EGL Waste holds an exclusive agreement for the sale of Turmec recycling plants in Australia, along with servicing and spare parts work. This provides a low-risk, diversified revenue stream for EGL, which can offer proprietary equipment and services that complement Turmec’s solutions. An introduction to major waste industry players also provides a network for EGL to market its patented PFAS solution.
A patented PFAS solution undergoing commercial trial – PFAS (per- and poly-fluoroalkyl substances) contaminated soil and water has been consistently linked to cancer, infertility and high cholesterol, and is now the subject of class- action lawsuits and delays to major infrastructure projects, such as Melbourne’s Westgate Tunnel project. Industry validation awaits for EGL’s patented water treatment solution which is currently undergoing a commercial trial with Reclaim Waste. If successful, PFAS treatment is a significant opportunity for EGL. Its solution – which is aimed at being affordable and scalable – offers a point of difference from current industry players.
TAYLOR COLLISON LTD. www.taylorcollison.com.au ABN 53008172450 AFSL 247083
WILLIAM JORDAN [email protected] +612 9377 1500 www.taylorcollison.com.au
November 15, 2021
Recommendation: Speculative Buy
Summary (AUD)
Market Capitalisation Share price
52 week low
52 week high
Share price graph (AUD)
$49.3m $0.175 $0.029 $0.205
Key Financials (AUD) FY21A
Revenue ($m) 46.6 EBITDA ($m) 3.1 NPAT Adj. 1.7 EPS Adj. (c) 0.6
PE Ratio (x) 28.7
DPS (c) 0.0
Div Yield 0.0%
Franking 0.0%
FY22E FY23E
51.0 56.2 3.8 4.3 1.9 2.2 0.7 0.8
25.3 22.2
0.0 0.0
0.0% 0.0%
0.0% 0.0% EV/EBITDA (x) 16.6 13.4 11.8 EV/EBIT (x) 28.7 16.8 15.0
1
The Environmental Group Limited (EGL)
15 November 2021
The Environmental Group Ltd - Summary of Forecasts
EGL Price at posting:
17.5¢ Sentiment: Buy Disclosure: Held
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