Waste Management's Ellis takes swipe at 'greedy' market

Waste Management chief executive Kim Ellis has taken a swipe at investors who ignored the rubbish company's 29 per cent profit rise announced on Monday and dumped its shares 10 per cent.

"The market is so greedy for performance," Mr Ellis told NZPA.

"Twenty-nine per cent is obviously not enough so bob's your uncle."

Waste Management forecast a similar proportioned rise for the annual result despite expecting a challenging Australian market.

The good news failed to satisfy investors who sent the stock down 19c yesterday and 23c today, to $6.36. The stock has risen 14 per cent this year and has risen from a price of $2.45 in October 2001.

Analysts generally agreed that while there were "some issues on the margins", generally it was a very strong result.

UBS broker Richard Leggat said Waste Management's predicament was typical of a sharemarket which was considered fully priced.

Unless companies had positive surprises to announce, their stock was likely to be sold after the result.

"We think they have been dealt with pretty harshly. They have increased their capex a bit but they have also had a hell of a run the last few months," Mr Leggat said.

Mr Ellis also detailed aggressive plans for Australian expansion.

"The key challenge is building a business from here -- how do we transform our company in Australia to be a much bigger business."

He predicts consolidation in the waste management industry in Australia and he wants to be part of that, if not initiating it.

Catalyst for the shake-up has been the listing of Terry Peabody's liquid and hazardous waste company Transpacific Industries Group Ltd (TPI) in May.

"He's a mover and shaker," Mr Ellis said. "People have been sitting on their chuffs over there just running their businesses and getting low margins for their far-off owners and now you have someone who's prepared to do something."

He said the first cab off the rank appeared to be New South Wales' waste services -- landfills and transfer stations -- which he described as a "big opportunity".

"We think they are going to be putting up all their dry waste assets for sale some time in the next 12 months.

"Everyone will be looking at it. It's a good piece of business. That's a big opportunity."

Mr Ellis said the NSW businesses would be worth anywhere between $1 million and $250m.

"I wouldn't know what it is worth the business is changing so much. It's hard to pin the value down."

Waste Management gets 20 per cent of its Ebitda out of Australia.

Mr Ellis has been hoping to raise that proportion, but the problem has been than New Zealand has performed better than expected and "keeps raising the bar".

- nzpa