EGL has given a strong update this morning with the headline being an over 30% increase in EBITDA vs FY21, well above their stated goal of 15% growth in EBITDA. The growth appears to be relatively widespread across their business units. Other recent announcements lend weight to the thesis that their growth is likely to continue and not just a one off. CEO Jason Dixon spoke to Strawman members last year and you'll find his preso on the Meetings page. This is one I'm happy to ride for the time being.
EGL announced they have secured a $17.8m contract in their TAPC business. It's a big deal given it represents almost 40% of the total revenue for EGL in FY21 alone - TAPC being just one of five divisions they run. Difficult to know what they'll make on it, although the current CEO has been at pains to emphasize bids going forward would be at higher margins than before he took over.
It was a pretty sweet announcement from EGL today that they've secured their first agreement under the Turmec agency agreement. The numbers themselves are quite large at over $50m but more importantly it represents validation that the technology has real value. The agreement seemed incredibly promising with 95% of all products being able to be diverted from landfill (a huge step change for the industry) but this announcement validates that it is also commercially viable. They did flag this contract in their half year presentation, suggesting they were very confident in it being awarded, but without detail around numbers. Tempering expectations slightly I don't think it's clear how much of the contract value EGL will see beyond the the $1.5m awarded to TAPC, nor timeframes or margins, but nevertheless it's still a welcome announcement.
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COMMERCIAL WATER TRIAL DEMONSTRATES SUCCESSFUL SEPARATION AND REMOVAL OF REGULATED PFAS FROM VARIOUS WASTE STREAMS [STOP SHOUTING]
- EGL’s foam fractionation technology has demonstrated outstanding results in commercial trials, successfully separating and removing PFAS from liquid waste streams up to 41.5ppb
- Consistent results demonstrated with regulated PFAS separated and removed to levels below detection limits in all high-volume low concentrate trials which represents a significant portion of the market
- At the highest concentrate trials (c. 40ppb total PFAS) regulated PFAS was removed over 99.4% on the first processing run with trials ongoing on these higher concentrate PFAS waste streams
- EGL’s technology has considerable advantages against other PFAS removal technologies including being simpler, safer, more versatile and more cost effective
- In order to advance commercialisation and support other business development opportunities EGL has received firm commitments for a $4.75m share placement (before costs) at $0.175 per share
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Seems like good results but who knows until they get firm commitments and we know what kind of margin they can make off this - assuming it works and is cost effective out in the field. The technology doesn't rely on filters or other more cost intensive apparatus so that seems like a positive.
The Capital Raise at the last traded price for just $4.75m (before costs) makes you wonder if it was really worth the effort - factor in costs and is debt a better option? No mention of a SPP so not favoring existing shareholders. Overall, it's not bad news but I'm not sure what it means to the company's value - will do more work on it over Xmas.
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