DGL - DGL Group

[System]

DGL is a well-established specialty chemicals and dangerous goods business offering solutions from manufacturing to recycling. DGL employs over 280 people and operates a network of 26 sites in Australia and New Zealand with approximately 140,000 tonnes of manufacturing capacity, 126,000 tonnes of chemical storage, and 174,000 tonnes of waste processing capacity.

The DGL business was founded by Simon Henry in 1999 and has established itself as a leader in the sector through a combination of organic growth and targeted acquisitions of business, property and other assets. DG's portfolio of assets and capabilities allows it to offer its customers a range of services across specialised chemical formulation and manufacturing, warehousing and distribution and waste management and recycling.

During 2020, DGL served more than 1,300 pro forma customers (including customers acquired as part of its recent Chem Pack acquisition), across Australia and New Zealand from industries including agriculture, water treatment, mining, construction, automotive, food, pharmaceutical, lead smelters, plastic recyclers, galvanisers, manufacturing, home and garden, and chemical suppliers. DGL integrates deeply into its customers' processes and workflows at multiple levels, resulting in loyal and long-tenured customer relationships.

It is anticipated that DGL will list on the ASX during May 2021.

Home | DGL Group

DGL Group is a global leader in chemical formulation and manufacturing, warehousing and distribution

www.dglgroup.com

 

[Dona Ferentes]

Listing date	24 May 2021 #
Company contact details	DGL Product Management | Manufacturing, Warehousing, Distribution DGL Corporation is a diversified industrial group of companies operating in manufacturing, warehousing and distribution. Total product management! www.dglgroup.com +61 (0) 2 4247 2100
Principal Activities	DGL is an integrated trans-Tasman business. Its service offering includes chemical formulation and manufacturing, warehousing and distribution, and waste management and recycling.
GICS industry group	TBA
Issue Price	$1.00
Issue Type	Ordinary Fully Paid Shares
Security code	DGL
Capital to be Raised	$100,000,000
Expected offer close date	12 May 2021
Underwriter	Fully underwritten. Bell Potter Securities Limited and Canaccord Genuity (Australia) Limited (Joint Underwriters and Lead Managers)

 

[Dona Ferentes]

now $2.70 , and only listed in May at $1.00


Simon Henry, boss of chemicals manufacturing and storage group DGL says the pandemic has killed off the “just in time” approach to supply chains across industry, and that shipping channels and international logistics face many more months of “chaos”.

He said international players were increasingly shifting more of their stock into local country warehouses and storage sites and lifting inventory, so they can be better prepared for when shipping and transport logjams occur.

DGL Group has 1300 customers across industries such as agriculture, water treatment, mining, construction, pharmaceuticals, and home and garden.

DGL earlier this month acquired Opal Australasia based in Western Australia for $8.6 million. It is a specialist contract fertiliser and packing business.

Mr Henry said DGL was on the hunt for further acquisitions but would stay disciplined and only move if a purchase added value to the business.

 

[Dona Ferentes]

AdBlue / Diesel Exhaust Fluid Supply Crisis

“We’re effectively in a bidding war on an hourly basis”
- Simon Henry, CEO, DGL Group Ltd [Australia’s largest AdBlue manufacturer]

“Uncertainty can cause more damage than actual shortages, and the recent nervousness around urea and AdBlue is illustrating how vulnerable our supply chains can be”
- Innes Wilcox, CEO, Australian Industry Group

 

[Dona Ferentes]

The federal government and fertiliser manufacturer Incitec Pivot have struck an agreement to significantly increase the local production of urea used in the diesel exhaust fluid AdBlue.

The company will design, trial and, once tests are successful, scale up manufacturing of significant quantities of technical grade urea to supply the domestic market.

In November, Incitec Pivot announced plans to shut down its Gibson Island fertiliser plant in Brisbane by December 2022.

The new deal has brought much-needed relief for many in the industry.

"It's good news that there is an Australian option to produce urea locally," Simon Henry, chief executive of DGL Group, the parent company of Australia's largest AdBlue producer AUSblue, told the ABC.

"But we need to be careful that you don't have all your eggs in one basket based around one plant, because if that plant goes into maintenance or there's other some other disruption to supply, we'll be back into the same crisis position.

The idea is to have multiple sources of urea and AdBlue to serve Australia, so that we're not dependent on any one source

 

[Dona Ferentes]

Key financial highlights:

• Key financial highlights: Strong growth across all key earnings metrics, with solid momentum in 1H22 continuing in to 2H22:

o Sales revenue of $369.8 million, up 88% on pro-forma FY21 and up 4% on guidance
o Underlying EBITDA1 of $65.6 million, up 133% on pro-forma FY21 and up 1% on guidance
o Underlying EBIT1 of $48.4 million, up 188% on pro-forma FY21
o Underlying NPAT of $33.6 million, up 197% on pro-forma FY21

• Progressed growth strategy by improving performance of existing business, bolstered by acquisitions

o May 2021 capital raise now deployed. Successful delivery on our strategy of investing for growth.
o Successful acquisition and integration of 11 businesses expanding and diversifying DGL’s scale, geographies, expertise, and offerings.
o All three operating segments performed well during financial year 2022.

• Strong balance sheet with $25.4 million in cash, $66.2 million net bank debt.
• $31 million uplift following revaluation of strategic property. Total value of property now $160 million.
• No dividends paid in FY22 in line with policy to reinvest earnings into growing businesss

and down 35%
So, why did it get slapped? The outlook; cloudy with a hint of storms

?️

 

[Dona Ferentes]

The company converted less than half its earnings into cash and told analysts on the call it would require bank approval for further acquisitions.

 

[Als2own]

Only put this in the competition this year as KAU didn’t make the criteria to be picked. Has been sold off heavily and with some good bolt ons acquired last year and a growing real estate portfolio around the country I’m looking for a strong rebound in 2023.