Waste services business Tox Free Solutions Limited (ASX: TOX) this morning reported a net profit of $12.4 million on revenues of $496.1 million for the full year ending June 30, 2017. The revenue was up 26% for the year, while the net profit slipped 2%.
The company will also pay a final full franked dividend of 5 cents per share to take full year dividends to 9.5 cents per share on total earnings per share of 7.1 cents, versus 9.23 cents in earnings per share in the prior year. Total dividends for the year were up 6% on the prior year and on an adjusted basis total earnings per share were 13.8 cents per share.
The company also flagged that net profit after tax but before amortisation was up 14% to $28.6 million thanks in part to its acquisition of Daniels Health as Australia's largest provider of healthcare waste management services.
Other highlights included over $100 million in new contract wins as its services remained in demand on the east coast of Australia, although the group blamed the mining downturn for the softer results in Australia's west.
Its "Waste Services" operations that serve the mining and energy industries remain its largest contributor to EBITDA (operating income) at $38.6 million, although this division saw EBITDA fall 35% over the year due to less activity in the oil and gas sector.
Tox Free should also benefit over the long-term from the growing amount of waste Australia's expanding population produces and this is its best hope to produce consistent organic growth, with its household waste services operations likely to benefit from these kind of demographic trends.
Selling for $2.35 the shares offer a trailing yield of 4% plus the tax effective benefits of franking credits. Using adjusted metrics as a reference point it trades on around 17x trailing earnings.
