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Toxfree up ahead of potential takeover

Health division boosts waste management firm’s first half profits as takeover talk continues

 

Waste management firm and major fleet owner Toxfree recorded a slight bump in net profit and revenues in its first profit announcement since rival Cleanaway made an $831 million takeover offer for the company. 

While the proposed takeover is still subject to the approval of courts, shareholders and the Australian Competition and Consumer Commission, Toxfree has been preparing for it to go ahead – postponing longer-term projects and making about 40 positions redundant for an estimated cost saving of $6 million per annum.

The company made a net profit after tax of $11.2 million in the six months to December 31, up 8 per cent on the same period the year before, while revenues were 7 per cent higher at $255.3 million.

Toxfree was pleased with its performance given that its work on a number of projects had been completed – including work on Barrow Island and the Yarloop remediation contract and the divestment of waste services assets in Rockhampton and Tasmania.

These and others led to a fall in revenue of $28.5 million in its Waste Services division and $20.7 million in its Technical and Environmental Services division year on year.

Nonetheless, Toxfree said the award of new contracts from Inpex and Laing O’Rourke and the extension of existing contracts from FMG was an encouraging sign.

“Momentum from existing contracts is also expected to increase in the second half from projects and contracts including Inpex in Darwin, Shell Singapore and the Barangaroo Soil Remediation contract in NSW,” the company said.

Health Division

The results follow the company’s entry into the health sector after its acquisition of healthcare waste management services provider DanielsHealth for $192 million last year.

ToxFree’s new Health Services division generated $45.9 million in revenue and earnings before interest, tax depreciation and amortisation of $13.2 million for the half, with the company attributing the rise to new operational efficiencies.

These included its Toxfree fuel program, established to find an alternative recycled fuel source for a Silverwater, NSW medical waste incinerator.

During the half Toxfree commissioned its HazPack depackaging technology, used to recover liquids such as steel and paint from used paint tins and oil filters – with the liquids used to create fuel and the solids recycled.

The plant achieved its first 500 tonnes of waste processed without incident in the second quarter.

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