EGL - The Environmental Group

[greggles]

Noticed this stock today and couldn't find a thread on it so here goes.

The Environmental Group Limited (EGL) is a facility services and environmental solutions company that provides clean air to the resource, industrial and municipal sectors. EGL provides industrial services, operates air infrastructure, completes engineered solutions to enhance air quality, and provides environmental facility management. The core operating businesses of EGL are Total Air Pollution Control Pty Limited (TAPC) and Baltec.

Today the company made the following announcement:

15 March 2019

Company Announcements Office
ASX Limited
Level 4, 20 Bridge Street
Sydney NSW 2000

Total Air Pollution Control (TAPC) secures $12.9M Contractfor the design and supply of Gas Scrubbing Plant

The Board of The Environmental Group Limited (ASX: EGL) is pleased to advise that the Group’s wholly owned subsidiary Total Air Pollution Control Pty Ltd (TAPC) has secured the contract for the design and supply of the Gas Scrubbing Plant for a project in Western Australia.

This new contract has a gross value of $12.9M and will help cement TAPC’s contribution to EGL.

TAPC and its subsidiary Baltec Australia, which was purchased by EGL in October 2018, have worked closely to leverage its combined team of experts to this project, producing a unique technical solution to manage the treatment of the waste gas generated by the Acid Baked Rotary Kiln to ensure environmental emission compliance.

TAPC brings significant experience from developing similar solutions for other rare earth producers in the design, supply and commissioning of gas scrubbers.

The winning of this contract is in line with the EGL strategy to grow TAPC and is an important milestone for the TAPC team who have dedicated substantial resources over a number of months to achieve this outcome.

The agreement is a fixed price $12.9M contract over two stages: 1. Design and 2. Supply. The project is scheduled for delivery to site in Q3 2020 (subject to confirmation of commencement of phase 2).

Lynn Richardson
Chairman
The Environmental Group Limited

The announcement saw the EGL share price spike from 5c to an intraday high of 8c before retreating to 5.6c, where it is currently trading.

I have no opinion on EGL but thought it deserved its own thread.

 

[debtfree]

Seen this one come up in a scan so I thought an updated chart wouldn't go astray.

 

[Dona Ferentes]

EGL is now 33c, has been pushing North over the last 12 months. Market cap now about $100million. Raised money in Oct 2020 and again last Dec.

• In order to advance commercialisation (of the foam fractionation technology to remove regulated PFAS particulates from various waste streams) and support other business development opportunities, EGL has received firm commitments for a $4.75m share placement (before costs) at $0.175 per share

The company is into design, application and servicing of innovative gas and vapour emission control systems, inlet and exhaust systems for gas turbines and engineering services, and innovative water treatment to a wide variety of industries. EGL has four business units which are Total Air Pollution Control Pty Limited, Baltec Inlet & Exhaust Systems, EGL Water, and Tomlinson Energy Service.

I notice Mirrabooka MIR has taken a position, as a new acquisition, in the last 6 months.

 

[Country Lad]

Funny you should mention this one, I have it as a buy if it breaks 35. I buy a break only if it closes above the trigger or it will do so in the matchout. Yesterday it opened at 36, high of 36.5 and seeing I was to be away from the computer, bought at 36 only to find it closed at 32 well below my trigger. I hope MIR's confidence is justified.

 

[Dona Ferentes]

Seems to be a different company. (got into a lot of trouble a decade ago). Was having a look:

• Tomlinson: Sale, installation, maintenance and repairs of boilers, burners and steam equipment. The division also provides an essential link in our strategy to build a bio/waste to energy platform
• TAPC : Designs, manufactures and services flue gas treatment systems which prevent harmful contaminants being discharged into the atmosphere.
• Baltec IES : Produces inlet and exhaust systems for gas turbines, which are used to complement and augment solar and wind energy production.
• EGL Waste Services : Sales and services platform for the exclusive Turmec Agency Agreement in Australia. Turmec are specialists in recycling solutions for the global waste industry.
• EGL Water : Enhanced technology designed to protect our environment by the separation and removal of per-and polyfluoroalkyl chemical substances (PFAS) from contaminated water.

Dec 2021: announced successful results from its commercial PFAS water trial with Reclaim Waste. The trial has been run on various commercial waste streams and liquid waste types containing PFAS at different concentrations. These trials have demonstrated successful separation and removal of regulated PFAS to below detection limits in all high volume low concentrate trials and very high separation and removal levels of over 99.4% from a first processing run on the highest concentrate trials. Raised money at 17.5c .... now 33c

OUTLOOK
• EGL has budgeted for improved earnings in all operating divisions subject to the impact of COVID-19 which is unknown at this stage.
• We continue to expect EBITDA to increase by over 15% year on year after significant items*.
• Corporate costs will increase with the new management team and renewed board in place.
• Management's focus will remain on margin improvement and reviewing processes to improve products and services.
• The two new organic growth areas of Water (PFAS separation) and Waste (Turmec agency agreement) will focus on the commercial opportunity to generate returns for shareholders.

 

[Dona Ferentes]

As mentioned in Mirrabooka's shareholder shout-out yesterday, MIR has taken a stake in EGL in last Jul-Dec period. Their comments included that it was the company with the smallest market cap in which they had a holding, and also the CEO is ex-ToxFree, and were impressed with his performance when at TOX as Executive General Manager - Corporate & Risk, prior to CleanAway taking it over.

Market cap now $83million. EGL has five business units, all committed to the protection of the environment by improving air quality, reducing carbon emissions, enhancing waste treatment, and lifting water quality.
• EGL Waste Services provides the sales and services platform for the exclusive Turmec Agency agreement in Australia, Turmec are specialists in recycling solutions for the global waste industry, providing bespoke systems that enable their customers to efficiently recover high-quality material from waste, reducing the need for landfills. This relationship recently picked up a significant contract in Qld

sale of a world leading recycling solution in Australia for construction and demolition waste for a total value of $49 million. Under the Agency Agreement, EGL is entitled to a sales commission which will be invoiced and recognised in stages over the term of the contract. In addition, EGL’s Total Air Pollution Control (TAPC) division will design and supply the dust extraction system with a value of over $1.5 million.

 

[Dona Ferentes]

Environment services company Environmental Group (ASX:EGL) is on the M&A trail, announcing a deal to acquire gas fitting company Ignite Services in a cash and share deal for $2.7m.

The deal is a ~4x multiple of Ignites normalised FY21 core earnings of $700,000. EGL will pay $1.65m in cash, along with $850K in EGL shares at completion and another $200,000 in cash payable in 12 months from completion.

EGL chief Jason Dixon said, "With Ignite Services focus on combustion technologies and waste treatment technologies, both EGL Waste and Water will benefit from the knowledge and experience Ignite brings to the Group."

Ignite are leaders in Commercial and Industrial gas fitting, electrical and plumbing services specialising in:
• Combustion efficiency analysis
• Solutions for complex gas installations
• Working with major industries on gas projects
• Polyethylene and electrical fusion welding
• Burner repairs and modifications
• Maintenance contracts
• Installations and commissioning

Ignite Services install, service, and maintains gas fired equipment across a range of industries including mining, waste management, production facilities and industrial food processing plants. Ignite Services maintains a strong base of facility management contracts with clients in education, hospitality, hotels and resorts, corporate office buildings and retail shopping centres.

Most recently, Ignite Services has been involved with industry leaders and infrastructure companies trialling blended hydrogen. Green energy is a clear component towards meeting zero emission targets.

((mmmm - Ignite and Hydrogen !!))

 

[peter2]

EGL has been a quiet achiever with its share price rising significantly (~1000%, yeah that's x10) in 2021.
Looks likely to go higher from here after a significant pause.

 

[Dona Ferentes]

Environment services company Environmental Group is on the M&A trail, acquiring gas fitting company Ignite Services in a cash and share deal for $2.7m.

And now a slightly more significant acquisition; market cap still under $70m

EGL to acquire Airtight Solutions

Highlights:
• EGL to acquire leading Australian air pollution services provider Airtight Pty Ltd for $7.0 million plus up to $5.0 million earnout based on FY24 earnings
• Acquisition represents a major expansion of EGL’s presence in the air pollution control market
• Airtight focuses on smaller low-risk projects with recurring cash flow in the light industrials sector, diversifying EGL’s revenue and expanding EGL’s client base
• Revenue synergies from cross-selling with EGL’s TAPC and Waste Services
divisions, and the opportunity to grow service revenue through Tomlinson personnel and experience
• Highly experienced and capable leadership team and excellent cultural fit
• Acquisition of Airtight is expected to be more than 15% EPS accretive to EGL shareholders on forecast FY24 pro forma earnings (before any synergies)
• EGL will undertake an equity capital raising of up to $9.0 million, comprising a placement to raise $8.0 million and a subsequent Share Purchase Plan to raise up to a further $1.0 million. Priced at 20c a share
• Proceeds from the Placement and SPP will be used to support the acquisition and growth of Airtight

Market seems to like it... trading again and above the offer price.

 

[Dona Ferentes]

Mirrabooka MIR has taken a position, as a new acquisition, in the last 6 months.

And MIR has popped up as a significant holder, at 6.2%, nibbling away and then a big spend in the placement

Placement raised approximately $8.0 million through the issue of approximately 40.0 million new fully paid ordinary shares in EGL at an offer price of $0.20 per New Share. The Placement was well supported by existing shareholders as well as new institutional and sophisticated investors.

EGL’s Chief Executive Officer Jason Dixon said: "We are delighted with the support we have received from existing shareholders and new investors for the equity raising. We are confident that the acquisition of Airtight Pty Ltd will complement our existing business units and position EGL as a leading Australian provider of air pollution control systems ”

Still 20-21c

 

[Dona Ferentes]

Following the $8m placement, the Company accepted applications for 3,670,000 new Fully Paid Ordinary Shares under the SPP, raising $734,000.

The SPP provided Eligible Shareholders with the opportunity to subscribe for up to $15,000 of SPP Shares at $0.20 per Share.

...didn't quite get to the $1 million they wanted... was a narrow price gap as EGL at 20.5c now.

 

[Dona Ferentes]

Still 20c ... moved up to on notification of a beneficial service.

:::EGL is pleased to announce the sale of the first commercial PFAS separation unit.
Key highlights:
• The first commercial plant was delivered on time and on budget in September2022.
• Installation commenced on site late November, with the plant completed by mid-January for EPA approval.
• Commercial unit EPA documentation was submitted and approved by the EPA to process PFAS waste streams 31 January 2023.
• During the commissioning the plant processed various liquid waste streams with samples collected and sent to laboratories for analysing results.
• All PFAS waste streams treated resulted in regulated PFAS being removed to below detectable levels.
• A purchase order has been received for the plant with the sale completed
subject to the sites EPA approval.
• The sale price includes installation and commissioning of the first plant along with a Service Level Agreement.
• Commercial terms have been agreed for the purchase of a second plant.

 

[Dona Ferentes]

trading around 20-21c

In an ASX trading update announcement released to the market on 24 November 2022, EGL lifted its earnings guidance for FY23, noting Normalised EBITDA was anticipated to increase by over 35% year on year. Normalised EBITDA is EBITDA after adjusting for share-based payments, acquisition costs, unrealised foreign exchange gains & losses and redundancies.

Based on the unaudited management accounts, EGL now anticipates a material difference in Normalised EBITDA in FY23 increasing by approximately 50% year on year. This reflects strong performance across the business from both ongoing services and projects, with a particularly pleasing final quarter’s trading. The result also contains only a minor contribution from the Airtight Solutions acquisition which settled in May 2023.

 

[Dona Ferentes]

20.5c
.
Niche.
.
EGL Expands Service Offering Into Solar Farms
Key Highlights:
• EGL engineering designed a unique air filtration system to significantly reduce particulate matter entering solar farm inverters.
• Preventing the matter entering the inverters will lead to a significant reduction in maintenance and power production down time.
• The filtration system will reduce the risk of fire and explosion in the inverters due to the build-up of particulate matter.
• The technology was derived from the Baltec IES divisions design for gas turbine inlet filtration systems utilising the group intellectual property.
• EGL has signed its first contract to supply air filtration systems into the solar energy market for $2.1 million.

 

[Dona Ferentes]

21.5c.

another small cap fund looking under the bonnet:

An undervalued small cap growth story

Environmental Group (EGL) is exposed to several secular growth markets and is run by a management team that has done it before.

www.livewiremarkets.com

3 year chart.

 

[Dona Ferentes]

one of my entries in 2024 FY competition

Market cap $87 million
PE of 26

 

[Dona Ferentes]

in keeping with the spirit of the competition:
"don't forget to put in your reasons in each thread why you think the share price will increase in 2024"

... I'd like to think bedding down of recent acquisitions, synergies within their various divisions and a proven management will maintain profitable growth and keep the SP moving higher.

 

[Dona Ferentes]

EGL is one of my 4 entries in the CY2024 tipping comp. We await reporting season in Feb. So far, holding up well... XSO (Small Ords) for comparison.

.

 

[Dona Ferentes]

one of my entries in 2024 FY competition

around 26c .. reports on 22 Feb

The Environmental Group
Limited​

How does EGL capture the value out of the rapidly changing landscape?
• “One EGL” offers the waste industry a one stop shop to deliver sustainable engineering solutions backed up by a full-service offering.
• Our clients are common across many of our business units.
• Industry needs to keep operating but is evolving and can do it better, such as without gas & vapour control systems we can’t produce lithium for batteries or rare earths for electric vehicles.
• Gas turbines are required for energy transition but need to be engineered to run in peaking load as well as base load capacity.
• The same technology can be used for waste to energy plants.
• We must invest significantly in recycling plants if we are going to hit our mandated targets.
• These plants require dust extraction control systems to prevent air pollution.
• Efficient steam production is required for food safety, dairy industry, hospitals and medical waste.
• We need to clean up our sins of the past and remove pollutants (PFAS) from the environment.
• With net cash of $9M at the end of the financial year we have the balance sheet to support our growth.

@debtfree

 

[Dona Ferentes]

EGL has entered into an exclusive Agency Agreement with Kadant PAAL for the sale of world leading Baling solutions in Australia and New Zealand.

Kadant PAAL has 150 years of experience, designing and installing more than 32,000 machines. Kadant PAAL’s reputation is built on robust construction combined with cutting design and technology.

EGL's CEO, Jason Dixon, sees the collaboration as a tremendous opportunity to partner with the leading European baler manufacturer, a region long acknowledged for its technological prowess in the Australian waste market. The exclusive agreement not only enables Kadant PAAL to enhance its global sales, but also solidifies EGL's position in the waste industry.

EGL offers a complete range of services and technologies, including waste processing, air and odour control, servicing and spares, along with PFAS separation.