Transpacific Industries (TPI) Recommendation

Transpacific Industries (TPI) have a $14.40 share price target and an Outperform rating retained from Australian Stock Exchange analyst Macquarie Research Equities. Transpacific has been very active since listing in May 2005. A number of significant acquisitions have been completed over the last 12 months. A fortnight ago the company undertook a book build to raise $430m in ordinary equity to repay the debt used to purchase Cleanaway, representing 15% of issued capital. The placement was finalised at $13.00, and the stock has performed poorly since, despite the company’s dominant position in the Australian waste management market. Overnight, Chief Executive Officer, Howard Wilson, announced his resignation. The current CFO, Trevor Coonan, has been appointed CEO, effective 1 July 2007. Howard Wilson is to remain with Transpacific for up to six months to ensure a smooth transition. An executive search is being conducted to find a suitable replacement CFO. Although the resignation of Howard Wilson may be viewed negatively, the analyst believes Transpacific has strong divisional management in place to ensure operations continue to be managed effectively and that profit targets can be achieved. Trevor Coonan becomes the new CEO, after around two and a half years as Transpacific CFO. The founder and major shareholder of Transpacific Industries, Terry Peabody, continues as Executive Chairman. The new CEO has no direct operational management experience, but has been involved in all of the major acquisitions undertaken by Transpacific since listing in May 2005. In terms of operational management, reporting to the Executive Chairman and CEO will be Harold Grundell and Greg Campbell. Harold Grundell has been with Transpacific for over 17 years, and currently runs the Energy division. Going forward, Harold will be CEO, Transpacific Industries, which will comprise the Energy, Liquid Waste, Industrial Solutions, Commercial Vehicles and Manufacturing, and Biosolids and Recycling operations.
Greg Campbell joined Transpacific two years ago, and is currently the Managing Director of Transpacific New Zealand. He has overseen the achievement of delivering the forecast synergies and profit improvement’s from the Waste Management New Zealand acquisition. Going forward, Greg will become the CEO of Transpacific Solid Waste (which now includes the WNZ, Cleanaway, Baxter and Twigg businesses) and also all of the New Zealand operations. While the resignation of Howard Wilson may be viewed negatively by the market in the short term, Executive Chairman Terry Peabody has assembled a strong and deep management team over several years within Transpacific Industries (TPI). Transpacific has built a dominant position in the Australian waste management market from a small niche position in less than five years. There is potential for further acquisitions, with Transpacific having around $500m in surplus borrowing funding in place, which the analyst expect to be employed accretively.

Transpacific Industries Group Limited is listed on the Australian Stock Exchange (ASX) under stock code TPI. You can view their investor website here. TPI was listed on the ASX on 3 May, 2005. The company's principal activities are: liquid and hazardous waste management, industrial solutions and commercial vehicle importation and distribution. They provide integrated industrial cleaning and total waste management to customers across Australia and New Zealand, with particular focus on the liquid, solid and hazardous waste management markets. Transpacific is also a key player in the heavy-duty commercial vehicles industry in Australia and New Zealand and has niche operations in parts of Asia. The companies’ wide network of operations includes collection operations, transfer stations, waste-to-energy sites, composting facilities, and recycling plants. These assets enable Transpacific to offer a full range of environmental services to industrial, municipal, and commercial customers. Find out the meaning of the recommendations in this primer. Terry Peabody is the Chairman for Transpacific Industries and Howard Wilson is the CEO. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade TPI. Check your charts and good luck with your share trading!