This morning waste disposal business Tox Free Solutions Limited (ASX: TOX) posted a statutory net profit of $7.1 million on revenues of $255.3 million for the six-month period ending December 31 2017.
The adjusted net profit came in at $13.7 million up 14% on the prior corresponding half. The company will pay an interim dividend of 5 cents per share on adjusted (excluding one-off costs) earnings per share of 5.75 cents.
On a trailing basis the company now offers investors a trailing yield of 2.9% plus the tax effective benefits of franking credits.
Underlying or adjusted operating income (EBITDA) came in at $40.56 million which goes to show that this is a group that operates on low profit margins due to the relatively high costs in the waste management industry.
The group's net debt to equity ratio also worsened to 47% from 41% in the prior corresponding period. Total cash outflows for the half were $11.8 million after investment and interest costs, among others, which left cash on hand on $21.97 million. The group is forecasting second half capex of $6 million to take full year capex to $29 million.
The company splits its operations into four divisions; industrial services, environmental services, waste services, and health services. The industrial services sector that serves the resources and civil infrastructure industries is one of the largest segments and had a successful year growing revenue and EBITDA by 38% and 45%.
In December of this year Tox agreed to a takeover offer from Cleanaway Services at $3.45 per share and as such the share price is likely to hover around this mark until the deal is completed and the company de-listed from the exchange. The deal looks almost certain to go ahead with the institutional part of the offer now completed.
