Write-downs muddy Tox Free result

Waste management company Tox Free Solutions has lifted its dividend payout after releasing a mixed set of annual results that included weak earnings from its Western Australian and Queensland operations, but solid growth elsewhere on the east coast.

The Osborne Park-based company reported a 41 per cent slide in net profit after tax to $13.1 million for the year to June 2016.

This reflected $10.2 million (net) of one-off expenses, including $4.7 million of acquisition and integration costs, $4.4 million on redundancies and restructuring, and a $2.6 million impairment in the value of its Port Hedland wastewater treatment facility.

The company said it had been able to downsize the Port Hedland operation and reduce costs by diverting more waste to its Karratha facility.

Annual revenue was down 3 per cent to $393 million, while underlying profit after tax was up 1 per cent to $23.2 million.

The full-year dividend was increased by 6 per cent to 9 cents per share.

Managing director Stephen Gostlow said the 2016 financial year had been very positive for Tox Free, with growth in the east coast markets largely offsetting the decline in resource related activity in WA and Queensland.

“Our focus remains firmly on our strategy of continuing to expand our business into new markets, new geographic regions and new technologies,” he said.

Mr Gostlow predicted underlying earnings (Ebitda) would grow by between 5 per cent and 10 per cent in the current financial year, after being little changed in FY16.

The FY17 result would include a full-year contribution from recently-acquired east coast recycling business Worth Corporation, while revenue from resources-related construction activity was forecast to make a minor contribution.

He said the company’s cash flows and balance sheet were strong and was confident it would continue to deliver shareholder returns.