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Envirowaste lifts 2015 profit 50 per cent

NZ NewswireNZ Newswire 16/06/2016 Paul McBeth

Envirowaste Services, New Zealand's second-biggest waste management firm, boosted annual profit 50 per cent as its Mastagard acquisition and a growing population helped lift sales.

Net profit rose to $8.9 million in calendar 2015 from $5.9m a year earlier, financial statements lodged with the Companies Office show. Revenue rose 12 per cent to $226m in the year, which chief financial officer Jason Miles said was a combination of the first full year of Mastagard contributing to sales and the increased demand for waste management that comes with a growing population.

"Part of that growth was our acquisition of Mastagard in Christchurch in early to mid-2014," Miles told BusinessDesk. "We've got the flow-through of full-year revenue of that business, and it's enabled us to further invest in a Christchurch transfer station on top of that."

Envirowaste bought Mastagard for $21.1m in May 2014, just over a year after the Auckland-based waste management firm was itself purchased by Hong Kong billionaire Li Ka-shing's Cheung Kong Infrastructure Holdings for $492m.

Since 2013, the company's workforce has climbed to about 800 from 600 at the time of the takeover.

Miles said the Mastagard acquisition turned Envirowaste into "a pretty large player" in Christchurch, which has needed major waste management services since a series of earthquakes through 2010 and 2011 levelled the city and led to a major reconstruction phase.

The waste management firm's 2015 revenue was bolstered by increased building activity in Auckland, Tauranga and Hamilton, he said.

"The population growth in that area that creates more households and more waste from households," Miles said. "The last couple of years have seen very strong and robust economic growth."

Envirowaste's 2016 revenue growth is tracking at roughly the same pace as last year: "It's almost going to be a similar level around that 10 to 12 per cent by the looks of it."

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