DGL Group Limited services include chemical formulation and manufacturing, warehousing and distribution, and waste management and recycling.
Website
Due to list Monday 24-May.
[ Not to be confused with DGL - Delegat Group ]
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DGL Group Limited services include chemical formulation and manufacturing, warehousing and distribution, and waste management and recycling.
Website
Due to list Monday 24-May.
[ Not to be confused with DGL - Delegat Group ]
Looks like the founder going from 100% to 57%, market cap 257m.
If there's one good thing about the current high valuation environment, it's that we have been getting more new listings which is great.
No mention of dividend policy which is surprising and how I imagine it would be valued. Maybe they have eyes on more acquisitions.
If so it's instructive to look at the Chem Pack acquisition. Looks like they paid about 5-8 x EBIT for Chem Pack - that's including 24m of goodwill.
And DGC is starting out at about 16 x trailing EV/EBIT.
DGL was founded in 1999 by Simon Henry and is an integrated, trans-Tasman end-to-end specialty chemicals and dangerous goods business. The Company’s service offering includes chemical formulation and manufacturing, warehousing and distribution, and waste management and recycling. The Company’s vision is to leverage its asset base, customer relationships, and trusted brand to further expand services offered across the full chemical lifecycle and, ultimately, develop itself as a ‘one stop shop’ for its customers.
https://www.dglgroup.com/about-us
Who's here put in there $$ for the IPO?
Looks very promising.
Expected Commencement of
Trading on the NZX Main Board:
Monday, 24 May 2021, 12:30pm (NZT)
Snow Leopard has already started a thread for this. Is it possible to merge them?
Nuplex did well for me and I'd probably still be a holder if they didn't disappear, so will watch this one.
Yes not only did I already start one:
https://www.sharetrader.co.nz/showth...&highlight=Dgl
It has the exact same thread title.
I could sue for plagiarism. Using a different capitalisation is no defence against creating a total rip-off :mad ;:
seems a good sign when the founder and managing director, who happens to also be the largest shareholder, doesn't sell any shares as part of the IPO.
Bit of a contrast to some other recent IPOs. It will be interesting to see how liquid this gets in the first couple of weeks.
The action is happening on the ASX where it is trading under the code of DGL:
Attachment 12535
See the Herald reporting it was up 10% on the nzx today at 1.10. They don't seem to realize it was priced at AUD $1.
A quick summary of the prospectus:
- The issue is for new shares to fund expansion (acquisition of Chem Pack + capex) and repay debt
- Founder will own 57% post-float
- Forecast Dividends = nil in the short term (cash used for acquisitions yet to be identified?)
- Droughts in Australia will impact negatively on revenues
- Top 10 customers are 57% of revenues
- Strong Balance Sheet with debt/equity at 26-28% before retirement of debts from surplus cash not used for acquisitions
- At a forward PE of 24.6 this is a slow burn unless they can come up with some meaty acquisitions
- Challenge for 2022 will be restoring environmental solutions revenues which have been in decline since at least 2019 (~32% of total revenues)
Financials below:
DGL/DGC 2020 2021 2022 Revenues $180,050 $189,916 $209,657 Growth 10% 5% 10% Gross Margin 31.0% 35.0% 34.5% NPAT $4,833 $9,497 $10,447 EPS $0.019 $0.037 $0.041 PE Ratio 53.2 27.1 24.6 NTA $153,750 $162,395 $172,046 NTA/Share* $0.60 $0.63 $0.67 FCF -$15,822 $1,296 $8,480 FCF/Share -$0.062 $0.005 $0.033
Note: 2020 and 2021 assume inclusion of Chem Pack over the full periods.
*The NTA for 2021 and 2022 is my projection of the the tangible assets based on forecast profitability, although the actual values may drop by 4c per share depending on the treatment of pre-acquisition payments.
EDIT: all values quoted are $A per the prospectus and the PE ratio and other metrics are based on the issue price of A$1 per share.
Well, no complaints from me so far, based on ASX trading:
Up 24.5% on IPO price
Up between 14.7% and 33.2% on Monday (listing day) trading.
Attachment 12551
10 Adorable Snow Leopard Photos with Intriguing Facts
For Whatsup.
DGL announces strategic acquisition of Labels Connect
Quote:
...a small but strategic acquisition...
You gotta love this company, [ whilst it is going the right way ]Quote:
...What we are often finding is that the production of labels doesn’t always align with our distribution times, and this slows the delivery timetable...
DGL expands into North Queensland
Announcements coming thick and fast from this company, was another three days ago.
So this one is about a facility in Townsville, where our Shane won both the Supercar races last weekend and hopefully will do well in the three races this weekend.
Go DGL Group.
Go Shane
Attachment 12747
Autosport
You have done well out of this Snow Leopard.
https://nz.finance.yahoo.com/quote/D...chart?p=DGC.NZ
Growth had to come from acquisitions and restoring environmental solutions revenues. Good to see they are pursuing growth via expansion and and acquisitions with 4 announcements in the past month.
https://www.nzx.com/companies/DGC/announcements
Whilst one would expect the investments to be EPS accretive, it's hard to say by how much.
Todays biggest NZX riser ( at the time of posting ), going the same direction on the ASX.
Wonder what is going on ;)
I bought in yesterday and am enjoying the ride. No patience required 🤪
Mad spending spree continues, buying up in Western Oz this time, but issuing a few new shares as the cream on the top of the cake.
Probably about time they put the wallet away.
Now about that cake:
Attachment 12805
https://iambaker.net/red-velvet-cake...whipped-cream/
What did they raise the money for?
Not a bad day for DGC 😋
Was 2.04 at one stage on asx.
Been enjoyable having this share see how far we can go while they keep throwing cheque book around every few weeks
Moving at express train speed in the right direction 😁
Often there is significant discrepancy between ths ASX & NZX market prices.
There is sufficient volume that I am mildly surprised by this.
Maybe gaining abit of popularity be interesting with price coming back to 2.09 whether it'll hang around there or dip back more tomorrow had quick rise last couple weeks
Well this is getting abit dry. Must be approaching a PE of 70 or so.
Its a fine company that listed on sound multiples, with a good growth strategy and use for raised funds. But with the share price more than doubling (almost tripling!) it is turning into a bit of a meme stock with its share price in my viewing detached from any basis of fundamental support. Nice for holders for now, but a bit of a shame as likely to fall and wipeout recent purchasers equity and leave a sour taste. Not advice, DYOR so you can prove me wrong!
PE's are unimportant, but I do find the current SP somewhat bafflingly high.
Disc: The VGL SP baffled me for years and for years it stayed baffling and then, eventually, the SP dropped, a lot.
The other day I compiled a list of the top holdings of a handful of asx microcap fund managers and noticed that quite a few hold this stock, I haven't looked any deeper at it though.
Reports next Tuesday....
Are the people speculating FOMO or sense/smell from inside leak before the reports?
Or just be wise to wait for the report then make decision?
I'm a happy holder, having bought in at $1.55 (recently). The fundamentals of this company are difficult to establish considering their recent listing and acquisitions. I would sit on the sideline as the facts are likely to be less rosy than the expectations. DYOR, but these are my 2 cents.
Looks like a good result - better than forecast....
FY21 results exceeds prospectus forecast
31/8/2021, 8:30 amGENERALASX RELEASE
31 August 2021
Strong earnings growth
FY21 results exceed prospectus forecasts
DGL Group (DGL) (ASXGL, NSXGC), today announced its results for the year ended 30 June 2021. Pro-forma net profit after tax was $11.3 million, an increase of 134.6% on the prior year, and ahead of prospectus forecasts. Statutory net profit after tax was $47.2 million. Please refer to the appendix for a reconciliation of proforma net profit after tax and statutory net profit after tax.
• Successful completion of Initial Public Offering on 24 May 2021, raising $100.0 million.
• Strong growth in revenue, EBITDA, EBIT and NPAT, with results also exceeding prospectus forecasts:
o Pro-forma sales revenue of $196 million up 9% on pcp and 3% greater than prospectus forecast.
o Pro-forma EBITDA of $28.1 million up 47% on pcp and 8% greater than prospectus forecast.
o Pro-forma EBIT of $16.8 million up 124% on pcp and 9% greater than prospectus forecast.
o Pro-forma NPAT of $11.3 million up 135% on pcp and 19% greater than prospectus forecast.
• Solid revenue growth across all three divisions compared to FY20:
o Chemical Manufacturing division increased 3% to $97.3 million1.
o Warehousing and Distribution division increased 48% to $40.9 million1.
o Environmental Solutions division increased 2% to $63.4 million1.
• Strong balance sheet, with net cash of $43.8 million.
• Successful integration of the Chem Pack manufacturing business, acquired in January 2021, to expand the Chemical Manufacturing division’s manufacturing capabilities.
• Delivered on strategic initiatives outlined in prospectus including integration, expansion of services, cross selling between divisions.
• Announced several successful business and property acquisitions since listing. Expect to exceed prospectus forecast for FY22 of pro-forma NPAT of $10.4 million and pro-forma EBITDA of $29 million, which does not include the revenue and profit contribution from recently acquired businesses, Label’s Connect and Opal Australasia and favourable trading conditions experienced to date.
Note 1: The divisional revenue numbers include intercompany revenue of $3.7 million in FY20 and $4.9 million in FY21.
DGL Group (DGL) (ASXGL, NSXGC), today announced its results for the year ending 30 June 2021. Pro-forma net profit after tax was $11.3 million, an increase of 134.6% on the prior year, and ahead of prospectus forecasts. Statutory net profit after tax was $47.2 million. See appendix for reconciliation of proforma net profit after tax and statutory net profit after tax.
Commenting on the performance, DGL Founder and CEO, Simon Henry, said:
“This year has been a transformative year for DGL, listing on the ASX and welcoming new shareholders to our business, while raising $100 million to fund growth initiatives into the future.
“I am very pleased we have been able to deliver on our initial promises, as set out in the prospectus, both at an operational level and financial level. Pro-forma net profit after tax was 19.4% higher than we had originally estimated in our prospectus.
“The outstanding results were a result of the successful integration of Chem Pack, greater demand for our products from the agriculture sector, as well as the commissioning, ahead of schedule, of our lead smelter plant in Victoria.
“I’d like to recognise each and every one of our employees for their contribution to delivering these great financial and operational results.
“We are steadfast in executing our strategy to become the leading, full service, chemicals business in the region. This includes having a broad geographic spread, with proximity to key sectors that we service. Since IPO, we have acquired a number of sites and facilities in New Zealand and Australia providing development opportunities that will bolster our warehousing, distribution and chemicals manufacturing capabilities in FY22 so that we can meet the growing capacity the industry requires.
“We will continue to use funds from the IPO, as well as the strong cash generation of our business, to pursue growth opportunities. The business is well supported by a strong balance sheet and an experienced and highly motivated management team with a shared commitment to growth.
“The diverse industries we service - agriculture, mining, construction and infrastructure – have positive long-term outlooks. We are an essential business serving these critical sectors.”
Please click on the PDF file on the bottom of this page for the complete media release concerning the FY21 results.
Bought a few. Hopefully the earning EPS will continue.
I didn't know what to make of the result, but the market does!!!
total share number : 257,000,000
total assets 195,270,000
so share value is 0.7598. Current share price 2.90.
Is their EPS calculation correct?
Basic earnings per share (cents) 78 cents
My calculation is 47165000 ÷ 257000000 = 0.18 = 18 cents
The real EPS is about 4.1c and the NTA near 62cps.
The headline result has a massive $40M one-off in it.
Disc: based on quick glance at presentation, eps on 275M shares at FY (not weighted)
PS numbers are in $AU.
Hi SL, can you say a bit more about the $40m one-off in the presentation? I am thinking of buying, even after the big run-up from the listing price. They seem to have a reasonable moat around their business and have a lot of things gong for them that indicate they have good growth potential. I also like that they are on both the NZX and ASX and have operations in both countries. Maybe they will be another Mainfreight?
Preliminary Final Report Note 2 Footnote 1 (on Page 8).
Going from strength to strength
I confess I hold shares in this company,after deciding not to,.?
A friend just kept emailling "I told you".
I finally relented and bought into DGC.
However I bought DGL in Aussie as they were trading at au S2.30 compared with over $2.90 here.
Not sure of the financials,but their story is very good.
Hi percy, just curious, if dual-listing, why do you buy in ASX instead of in NZX, tax advantage even after currency exchange?
Currency.
Today S1 NZ converts to 97 cents Aussie.
Was about that when I bought, so NZ $2.90 converted to $2.813 so the $2.30 I paid was a good buy.
NZ share price is currently $2.92 which converts to Aussie $2.834,so with last sale at $2.78 in Aussie it is still a bit cheaper there.
The share price in both countries bounces around, so opportunities are there for us..lol
Thanks Percy. Here is my thinking: eventually I will convert AUD to NZD for spending here. If I buy in ASX( which I did ), then I need to convert NZD to ASX to buy and sell there. Then I convert them back NZD, having not considered taxation, maybe too complicated and too much exchange fees for a small amount of the trade. But good for you to exploit that:).
I always buy to hang on for ever.
Therefore I was looking at the cheapest entry to DGC/DGL.
I guess traders will take advantage of arbitrage opportunities as they arise.
My income stocks are NZ, where I get imputation credits ,while my aggressive portfolio is mainly small cap Australian companies,which I think have excellent growth potential..
In NZ I have large holdings in a few companies,while in Australia I have small holdings in a number of companies.
A very upbeat and positive annual report
Another good bolt on.
https://www.nzx.com/announcements/379527
What a wonderful company/share, tripling since listing 4 1/2 months ago, WONDERFUL !!!!
It is a wonderful company for sure. Good listing, solid use of new capital, etc. it deserves to perform well.
But sadly, after tripling its SP in just a few months, it has become a meme stock, with its price moving soley on account of momentum and enthusiasm and completely untethered to reality or fundamentals.
Enjoy it while you can.
Another acquisition profill in Western aussie definitely not afraid of growing
No property with this one though just leases. Maybe buying freeholds next?
Again!!!!!
I hope he's as good at juggling the management of all these companies as he is at buying them. Or has some system worked out to simplify it.
Seems to have had an excellent strategy getting the business built up to list,and I would expect he has been planning these bolt ons for some time.
I guess it would be like us planning to selling a rental property in a year's time, and figuring out what shares we are going to buy with the funds.
I keep thinking that:
a) they must have run out of money for acquisitions and;
b) they must be flat out dealing with their new purchases.
But no, they buy something else.
I guess they have more headroom on the credit cards than me :sleep:
Good article on DGC in this morning,s NZ Herald.
DGC are an interesting outfit but the results of their acquisition drive have yet to be seen. So far everything has been a bolt-on addition. Also having more than 50% ownership in one set of hands is risky IMHO
I love the conviction of this man, the execution of the float and post float acquisitions, and space the business is in. But personally I would be wary of investing into the business at these levels. The market hasn't got a clue how it is pricing the business and I bet you no one has done the maths to figure out what the proforma earnings of the business is and its capital structure (proforma for the organic business plus the earnings from all the acquisitions, and capital structure being the balance sheet post year end, less all the cash spent, plus any debt incurred, and use of shares as script). Over the next few days I might do a back of the envelope guess (as I don't think its possible to do anything overly scientific as their just isnt enough information) but whatever the guess I will wager the implied multiples are staggeringly high. Once statutory accounts start trickling out I think the share price will come back as investors realise the implied multiples are sky high and implied dividend yield miniscule.
Just my own thoughts. Not advice. Will give a crack at an actual spreadsheet and share it when I have a chance.
Buying Moar.........
DGL target sustainable vehicle market with Austech Chemical - NZX, New Zealand’s Exchange
DGL targets sustainable vehicle market with Austech Chemicals
Melbourne, Australia - DGL Group Limited (ASX:DGL) (NZX:DGC), (“DGL” or the “Company”), a specialist chemicals business that manufactures, transports, stores and processes chemicals and hazardous waste, today announced the strategic acquisition of Austech Chemicals Pty Ltd (“Austech”).
Over the last 20 years, Austech has successfully developed unique intellectual property for chemical formulations used in the automotive industry. Austech specialises in the manufacturing of non-oil automotive chemicals, such as coolant, brake fluids, solvents, flammables and aerosols. It is widely recognised that as Australia moves into more sustainable vehicles that more advanced fluids will be required, as such DGL sees this as a unique opportunity to access the sustainable vehicle market.
Founder and CEO of DGL, Simon Henry, said: “With the acquisition of Austech, DGL will now have a network of 51 facilities stretching from Darwin to Christchurch with a throughput of over 1.5 million MT per annum and servicing over 2,000 regular customers.”
Austech adds to the already established Trans-Tasman presence of 30 chemical manufacturing sites across Australia and New Zealand. Austech formulates over 12,000 MT of specialty chemicals per annum for its strong customer base, including major oil and retail blue chips. DGL will work to enhance these relationships to develop a strong network capable of delivering the chemicals of the future.
Austech further enhances the capabilities of DGL’s Chemical Manufacturing division reinforcing the company as the leading full-service chemical management company in Australia and New Zealand. Aligned with DGl’s cross-sell strategy, there are significant opportunities to attain additional business within the group.
The acquisition price consists of:
(a) a cash payment of $13M; and
(b) the issue of 5,306,122 fully paid ordinary shares in the capital of DGL. At the time the parties negotiated the conditional commercial terms in August 2021, the consideration represented a valuation of 5.2 x FY21 normalised EBITDA and based on the current market price of DGL shares, a valuation of 5.6 x FY21 normalised EBITDA.
Staff and management will be retained to continue to drive growth in the Austech business, as part of the broader DGL Group.
- ENDS -
This is looking like a company with good prospects but the market don't seem to be too excited by the latest acquisition and the share dilution
This company is a little outside my expertise but I like what I am seeing so far. I am watch listing this for possible investment
Here is an interesting interview with Simon Henry by UoA Bus Dev department
https://www.youtube.com/watch?v=njtQEj6cchY
Gettin a kickin these last few days. No news that I'm aware of.
It was inevitable and probably more to come over the next 12 months. The stock just massively bid up by momentum traders aided by the constant drip feed of acquisitions. Buyers just had no concept of the fundamentals they were buying into and the market still doesnt - no one has a clue what proforma PE or EBITDA multiples are and they still dont. Once statutory accounts start getting released people will realise its trading on massive multiples and even after the full year contribution from all the acquisitions kick in (in over a year) people will finally understand the true financial profile of the business and at current share prices it wont look pretty. Don't get me wrong great business, like the drive of management, and love the acquisition story - but market just got a bit loopy and it turned into a meme stock. Not advice - just my opinion
Yes, DGL has gone on a total feeding frenzy since the IPO.
Successfully assimilating all these acquisitions into group will take a laser-like focus from the board & snr management. Certainly not impossible, but they certainly have their work cut out for a while!
DGC results are out
http://nzx-prod-s7fsd7f98s.s3-websit...033/360920.pdf
I'm still trying to understand the impact of acquisitions on the increase in revenue and EBIT
I'm really impressed by Simon Henry in tangos link. My sorta guy. No nonsense, results orientated and obviously very driven.
Seems as though punters on NZX are happy to pay 2.65 while on ASX its at AU 2.46 or NZ 2.56. Better bargain on ASX.
(ASX: DGL) Buy Hold Sell: 3 of 2021's hottest IPOs: https://www.livewiremarkets.com/wire...ook-forward-to
Disclaimer: Please do your own research before investing.This is for informational purposes only.
The more research I do the worse the outcome.😂
Something interesting I came across today which sort of resonated...
Delink analysis from decision-making. Because you have spent a hundred hours on something, you don’t need to act. Keep doing your work of identifying good investment opportunities, but if the prices are not right, and there is no margin of safety, don’t act. Least of it, don’t act just because you have done the hard work. Stocks do not bother about your hard work. But when the time is right – and you are ready with your idea and capital – act.
:t_up:
Yeah seems more Aussie small cap and midcap funds interested in this stock generating more volumes on ASX...
• Bell Potter have maintained their BUY rating on chemical manufacturing company DGL Group (ASX: DGL) and have decreased their price target from $3.05 to $3, after the company held its AGM. DGL last closed at $2.40, implying 25% share price growth in a year.
Courtesy of poster on HC y'day...
"AFR today (wonder if the price of the remaining stock will increase?):
Australia’s diesel engines could be crippled in six weeks
"Australia’s diesel-powered trucks can’t operate without an additive called AdBlue. Simon Henry’s company supplies 60 per cent of the market. He will run out in six weeks."
Simon Henry said DGL had about six weeks’ stock left in its warehouses, but demand had risen so sharply that the group had about 1000 unfilled orders on its books as trucking companies and other customers scrambled for supplies.
I'm also in for the long haul, I hope I am proved wrong and the prices rise over the summer!!:)
Yes, yesterday the trading was very low trading on the NZX and rose towards the end on both NZX & ASX and I was wondering what was up ...:mellow:
"The price of AdBlue had also been rising sharply as shortages emerged."
Interesting article. Thanks for that!!:t_up: . The price rise of AdBlue stock should help DGL stock rise a bit :D
Good that Simon picked up AusBlue when he did and I suspect Simon will somehow capitalize on this 'opportunity' in the midst of adversity...
Seems AdBlue supplies in Australia at some service stations are being rationed to 50 Litres.
https://www.farmonline.com.au/story/...vice-stations/
Aus govt seem to be planning to get some supply from Indonesia and urea supply from Middle East..
https://www.abc.net.au/news/2021-12-...lies/100695094
There seemed to be accumulation of DGL at $2.67-$2.70 on the ASX today ...
Simon Henry, the chief executive of DGL Group, which makes about 60 per cent of Australia’s AdBlue from a plant in Queensland, said a global bidding war had begun for the limited stocks of high-grade urea being sought after by manufacturers in many countries. “We’re effectively in a bidding war on an hourly basis,” Mr Henry said.He said his company was working on all options to increase supply, and investigating flying stock in via cargo planes, with shipping lanes extremely slow because of the global supply chain disruption which had hit many industries.
Autobarn and Autopro stores expect AdBlue to sell out in the next week.
https://www.afr.com/companies/manufa...0211213-p59h3j
Australia's largest AdBlue manufacturer, AUSblue, says it is racing to secure urea supply or even formulated AdBlue from overseas in a bid to keep the haulage industry moving through the summer.
Simon Henry, the chief executive of AUSblue's parent company DGL Group, told the ABC the company had heavy-lift charter planes standing by to bring in 250 tonnes of urea each per flight from the Middle East and Asia.
"We worked all through the weekend up to midnight, we have pulled out all stops to get dribs and drabs of material out of plants around the world. We are having some success," Mr Henry said. "We have got various air charter companies on stand-by if we need to to fly in urea."We've also got some producers overseas that will probably supply us with some formulated AdBlue. It is significantly more expensive but critical, it will keep things moving through the summer."
Already, the prices for AdBlue have quadrupled in parts of the country, prompting the Australian Competition and Consumer Commission (ACCC) to investigate "whether an authorisation is needed to allow diesel exhaust fluid producers to share information".Mr Henry said although AdBlue was not a dangerous chemical, maintenance work at multiple urea plants, COVID-related shipping constraints, and rising diesel consumption had created a "perfect storm" for a shortage to occur.
https://www.abc.net.au/news/2021-12-...isis/100699832
Indeed...Indeed... $3:t_up:
I am selling off my holdings and exiting my positions in DGL for now.. there might be more news driven upside, but it has run up quite a bit from $2.5 and will pick it up later on dips next year if I can...
Happy Holidays sb9!!:cool: Hope to meet you again on the board of another winner stock :t_up: