BIN ASX shares drop 40%, Australian loses $100 million in a day

On Sunday, Daniel Tartak was worth more than $220 million.

But by Monday afternoon, $100 million had been wiped off his staggering fortune over just a few short hours.

That’s because Mr Tartak — and his family’s skip bin empire, Bingo Industries — has become the latest, unexpected victim of Australia’s housing downturn.

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Yesterday, the company and its bosses alike experienced a share market horror show after shares in the company plummeted by nearly 50 per cent.

That plunge demolished an eye-watering $658 million from Bingo Industries’ market value, with stock closing at $1.17 — a huge 49.1 per cent drop from the last session.

It was a stunning fall for Mr Tartak, 33, who made his Financial Review Young Rich List debut in 2017, coming in at number 16 with a $130 million fortune.

He pulled off that impressive feat after overseeing “one of the biggest ASX floats” of 2017 after his family’s waste-management and recycling business listed in May that year.

In 2015, at the age of just 29, Mr Tartak took over as CEO of the whole company — and just two years later in 2017, the company was worth more than $700 million.

That result was all the more impressive considering it had been purchased for a comparably paltry $1 million 12 years prior, when it was “just a small skip-bin collection company with four trucks, 100 bins and six employees”.

It was also an impressive rise for Mr Tartak himself, who drove trucks across Sydney for six months, waking up at 5am each day, during Bingo’s early days.

The ownership of company shares was split across the Tartak family, with Mr Tartak claiming a 17 per cent stake, accounting for his $100 million loss yesterday.

It came after he informed investors Bingo Industries had become a victim of the housing downturn, which had slashed demand for the company’s construction and demolition services.

According to Reuters, Bingo’s newly revised underlying earnings guidance is now $92 to $96 million, down from an earlier forecast of up to $112 million.

In a conference call with analysts, Mr Tartak said competition had seen pricing “actually going backwards” as well as a drop in residential construction activity in NSW and Victoria, which are crucial markets for the Sydney-based business.

It has been affected by the softening housing market thanks to its position as the top waste collection company servicing the building industry, with Bingo enlisted for jobs including the demolition and construction of residential, commercial and public infrastructure projects.

But Mr Tartak remained positive about Bingo’s future.

“While we have seen some headwinds in some of our key markets in financial year 2019, we expect construction to remain strong, with overall volumes of construction activity in NSW and Victoria of over $130 million,” Fairfax reported the Bingo boss as saying.

“We remain committed to our five-year strategy and our focus for the coming year will continue to be on optimising our network of waste assets.”

According to property experts, increased lending restrictions, higher taxes on foreign buyers and a well-publicised apartment glut have affected prices and seen construction approvals drop.

“I think what Bingo is telling us is that overall the property cycle is weak and it’s going to remain weak,” Blue Ocean Equity market portfolio strategist Mathan Somasundaram said.

Just three months ago, Bingo told investors the construction slowdown wouldn’t affect profits.

Now, the company’s profit forecast has been slashed by as much as 20 per cent.

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Source link Finance News Australia

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