DGL debut annual results ahead of forecast


Warehousing and distribution division contributes to promising ASX debut

DGL debut annual results ahead of forecast
Simon Henry

 

Newly listed trans-Tasman chemicals supply chain firm DGL Group has generated strong annual profits in its first ASX annual results and proclaimed its desire for growth.

Net profit after tax (NPAT) of $11.3 million for the financial year (FY21) was up 135% on previous financial year (FY20) and 19% greater than prospectus forecast.

This came on the back of a 9% rise in revenue to $196.5, up 3% on the prospectus forecast.

The ‘warehousing and distribution’ division revenue grew from $27.6 million to $40.9 million in FY21, or growth of 48% year on year. This compares to the prospectus forecast of $31.8 million for FY21.

Growth in FY21 was driven largely by higher utilisation of the warehousing network in Australia and New Zealand, which was up 8% from 86% to 94% in the period.

The ‘chemical manufacturing’ division revenue rose 3% to $97.3 million revenue grew from $94.2 million in FY20 to $97.3 million in FY21, or growth of 3% year on year.

This compares to the prospectus forecast of $104 million for FY21. Revenue results and the prospectus forecast included an assumed full-year contribution from Chem Pack.

"Revenue growth was mainly due to strong growing conditions in the agriculture sector leading to increased demand for chemicals, as well as growth through the Chem Pack business, acquired in January," the company said.

"Chem Pack has now been successfully integrated into DGL’s operations."

The ‘environmental solutions’ division revenue increased 2% to $63.4 million, mainly due to strong growing conditions in the agriculture sector.

"This year has been a transformative year for DGL, listing on the ASX and welcoming new shareholders to our business, while raising $100 million to fund growth initiatives into the future," DGL founder and CEO Simon Henry, said.

"I am very pleased we have been able to deliver on our initial promises, as set out in the prospectus, both at an operational level and financial level. Pro-forma net profit after tax was 19.4% higher than we had originally estimated in our prospectus.

"The outstanding results were a result of the successful integration of Chem Pack, greater demand for our products from the agriculture sector, as well as the commissioning, ahead of schedule, of our lead smelter plant in Victoria."

Henry notes that since listing the company has acquired a number of sites and facilities in Australia and New Zealand "providing development opportunities that will bolster our warehousing, distribution and chemicals manufacturing capabilities in FY22 so that we can meet the growing capacity the industry requires".

"We will continue to use funds from the IPO, as well as the strong cash generation of our business, to pursue growth opportunities. The business is well supported by a strong balance sheet and an experienced and highly motivated management team with a shared commitment to growth.

"The diverse industries we service - agriculture, mining, construction and infrastructure – have positive long-term outlooks. We are an essential business serving these critical sectors."

The company notes DGL Manufacturing has sued a vendor for breach of vendor warranties "in respect of the sale of chemical tanks which it is claimed do not comply with the Weights and Measurements Act (if used in public trade).

"The relief sought is approximately $590,000, being the estimated costs of bringing the tanks to a compliance standard."

 

Subscribe to our newsletter

Sign up to receive the ATN e-newsletter, digital magazine and other offers we choose to share with you straight to your inbox

You can also follow our updates by joining our LinkedIn group or liking us on Facebook

 

Trucks For Hire | Forklifts For Hire | Cranes For Hire | Generators For Hire | Transportable Buildings For Hire