Cleanaway FY26: earnings rise, dividend up, takeover bid in play

The Cleanaway Waste Management Ltd (ASX: CWY) share price is in focus today after the company reported a 13.5% rise in gross revenue to $4,371.3 million and a fully franked final dividend up 14.2% to 6.85 cents per share for FY26.

What did Cleanaway Waste Management report?

• Gross revenue lifted 13.5% to $4,371.3 million; net revenue up 13.1% to $3,736.7 million.
• Underlying EBIT rose 14.2% to $470.2 million, with EBIT margin increasing to 12.6%.
• Underlying net profit after tax (NPAT) up 13.6% to $223.1 million; statutory NPAT decreased 37.2% to $98.5 million due to significant items.
• Free cash flow climbed 63.7% to $213.8 million.
• Final fully franked dividend of 3.5 cents per share, taking the total FY26 dividend to 6.85 cents per share (up 14.2%).

What else do investors need to know?

Cleanaway’s FY26 result was powered by the strong performance of its Solid Waste Services segment and the integration of recent acquisitions, including Contract Resources and Citywide Waste. While the core business segments delivered growth, the company faced challenges in Health Services and Industrial Services, where lower earnings were offset by operational improvements and new recovery plans.

During the year, Cleanaway announced a non-binding, indicative takeover proposal from EQT Infrastructure. The $3.13 per share bid, reduced by the final dividend, implies a significant premium to Cleanaway’s recent trading price, but is still subject to due diligence and a binding agreement. The board has indicated support for the proposal in the absence of a superior offer and a favourable expert opinion.

What did Cleanaway Waste Management management say?

Cleanaway CEO & Managing Director Mark Schubert said:

FY26 was a demanding year for Cleanaway, but also one in which we delivered earnings growth, materially stronger free cash flow and improved returns. The strength of our core business remains clear. Solid Waste Services and Contract Resources performed strongly. Where we did not meet our expectations, the issues are concentrated in specific parts of the portfolio, we understand them and we are focused on improving performance.

The opportunity from here is to generate more growth from the platform we already have. In FY27 our focus is on recurring customer growth, price, productivity and utilisation, so that more of our earnings growth is organic, predictable and sustainable.

What’s next for Cleanaway Waste Management?

Looking ahead to FY27, Cleanaway expects underlying EBIT to be between $500 million and $530 million. The company will focus on growing its Collections business, driving improvements in Environmental & Technical Solutions, and leveraging investments in technology and efficiency initiatives. Management is also targeting stronger free cash flow and margin expansion as part of “Blueprint 2030 2.0”.

The outcome of the EQT Infrastructure proposal will be closely watched, as it could mean a significant change in ownership and deliver extra value to shareholders if completed.

Cleanaway Waste Management share price snapshot

Over the past 12 months, the Cleanaway Waste Management share price has underperformed the S&P/ASX 200 Index (ASX: XJO) with a decline of around 8%.

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The post Cleanaway FY26: earnings rise, dividend up, takeover bid in play appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.