Bear77
In that straw I posted on EGL's PFAS update today the last line was meant to read "I think they can go on with it" not "I think they can go with it", not that it matters too much. I'm not going to make any edits to a straw that already has 14 upvotes (as I type this), as that would reset to zero. Unlike Forum posts, where you can fix up little typos like that without penalty.
Point being, the company got themselves into a fair bit of trouble during the period before Jason Dixon accepted the CEO position, and they have been doing OK since. Developing and proving up the commercial viability of the PFAS tech is progressing well, and they are building a good order book of "work in hand" (i.e. contracted work) within their other 4 divisions, so I can see the investment thesis playing out OK so far. The exclusive Turmec agency agreement for Australia is a bonus that Jason brought to the table, and is significant as Ireland-based Turmec is the global leader in turn-key recycling plants. EGL have been appointed as Turmec's partners here in Australia and as well as clipping the ticket (2% commission) on all work that Turmec wins over here, EGL also get a percentage of all spare parts for Turmec's plants that are already operating here in Australia - such as these:
Case Study: Central Waste Station in NSW, Australia - Turmec
Patons Lane (Bingo) RRC Hybrid Dry & Wet Plant - Turmec
That Bingo case study hasn't been updated since the initial construction stages it seems. Here is Bingo's site write-up on the facility:
Patons Lane Recycling Centre | Sydney Recycling | Bingo Industries
One of Bingo's largest facilities is located at Eastern Creek and accepts ALL building waste now INCLUDING asbestos:
Eastern Creek Recycling Centre | Sydney Recycling | Bingo Industries
These Turmec plants process all building waste, separating metals, timber, cardboard, paper, plastics and other recyclable materials and then crushing up the waste bricks, stones and concrete and converting it into an aggregate product that is ready to use in landscaping applications or as a road base. Green waste is also turned into mulch. Some of these recycling plants, like Eastern Creek, also accept asbestos but I assume it has to be delivered separately and in accordance with all relevant laws and regulations rather than mixed in with general building waste. So in general terms, trucks bring in skips from building sites, empty them at these sites, and the facilities then recycle almost ALL (like over 99%) of everything that came in those skips.
Some of the newer sites have greater recovery (or diversion from landfill) rates than the older sites, with their best plants (like Eastern Creek) capable of diverting and recycling or repurposing 99.1% of building waste, as outlined by Jason in his meeting with us last October - which starts at the 58 minute mark of the 5th last meeting on the Strawman.com meetings page (i.e. scroll down right to the end and count back to the fifth last - you'll see Jason Dixon and EGL listed on the right side) which was recorded on October 8th - https://strawman.com/meetings
Further Reading:
https://www.bingoindustries.com.au/sustainability/environment/diversion-and-circular-economy
https://wastemanagementreview.com.au/bingo-report-highlights-18m-in-recycled-product-sales/ [October 2020]
https://www.turmec.com/case-studies/etmrecycling/
Recycling Equipment Solutions - Our Work | Turmec Case Studies
https://www.turmec.com/case-studies/central-waste/
These are recycling plants that work, and work efficiently to divert most of the waste that goes through them away from landfill. As global leaders, Turmec have become the gold standard in waste recycling plants, and EGL get a 2% commission on all Turmec sales throughout Australia, from new builds and mods, to consumables and spare parts.
Disclosure: I hold EGL shares.
Bear77
Yes @ShangriLa That's exactly the way I understand it, based on the wording in their announcements and what Jason told us back in October. Jason did mention that there is often upselling involved because these recycling plants often use boilers or furnaces which EGL's Tomlinson Energy Services division (which they bought from the RCR Tomlinson administrators) can service or upgrade, and the exhaust systems that handle the emissions from those boilers and furnaces can also benefit from EGL's TAPC solutions - Total Air Pollution Control systems to reduce or eliminate any potentially environmentally-harmful emissions.
EGL's Waste Services division is the local Australian distributor and agent for Ireland-based Turmec, and Paul Gaskett is the man there at EGL to contact for all Turmec-related enquiries. Paul and Jason had the Turmec agency before they joined EGL, which was awarded to them (on the basis of what they had achieved with Toxfree Solutions) when Turmec took all of their local staff back to Ireland at the start of the pandemic. Paul and Jason bought the Turmec agency agreement with them to EGL because they felt it would work better from within an engineering company like EGL who have a focus on environmentally-sustainable solutions and improving environmental impacts.
Where there are additional engineering services or other serves provided by EGL, my understanding is that yes, that is invoiced separately and all revenue goes to EGL. The 2% margin on Turmec gear, parts and consumables was the number Jason gave us in October.
Disclosure: I hold EGL shares.
Strawman
Looks like a bunch of volume went through EGL at around the time our meeting started, pushing the price up 20% or so.
So I just wanted to add some words of restraint.
Some of these companies have relatively thin market depth, ie sometimes there's not much volume available from sellers, and it doesnt take much buying to push up the price.
If you place a 'market order' (which just says buy at the best available price), you could end up paying well above the last traded price as you chew through the available sell orders. It's usually pretty counter-productive and just leaves you paying a higher price than had you just set a 'limit order' (which sets a maximum buy price) and tried to build the position slowly.
Spectur is a good case in point. Shares jumped up significantly straight after our first meeting, but have more or less settled back to where they were. Anyone who piled in at the time is (so far at least) sitting on a decent loss.
It's true to say that long term holders probably shouldnt be too fussy in their buy price (you only have to get it roughly right on a great company), but by the same token it also means you can take your time to build a position. As a group, we will just shoot ourselves in the foot by being overly eager.
This kind of thing can also put off guests, as they may need to answer a "please explain" from the ASX.
I'd also suggest that we should be mindful of the infectious nature of our guests enthusiasm. It's easy to get excited about a business when someone presents a good story, but to my mind that should always be backed up by some objective due dilligence. You'll never find a CEO who is going to be negative about their business' prospects. (That's not to suggest most are disingenuous, but it's useful to bear in mind given we all have a tendancy to be attracted by good stories)
Anyway, hope you enjoyed the meeting (and apologies for some technical difficulties at the start -- we'll trim that out for the recording).
Cheers
Andrew