Recycling infrastructure outfit CDSA rattles the tin

afr.com:

Adelaide-headquartered recycling infrastructure business Container Deposit Systems is seeking fresh funds as it prepares for state governments to expand incentives for returning used plastic bottles, cans and the like.

Victoria is expected to start a container deposit scheme this year.  

The six-year-old business designs and builds recycling collection terminals that can detect, count and classify different container types – say, beer bottles from milk bottles – using optical recognition.

It has hired boutique adviser Equity Advisory to raise $16.8 million to expand its product range and geographical presence. Potential investors are being told Container Deposit Systems would prefer to bring in just one investor for the raise. It was open to the deal structure, listing debt, hybrid debt, and/or equity.

Potential investors were told Container Deposit Systems would benefit from the legislative tailwinds for its niche within recycling. As an example it cited Queensland’s expected expansion of the container list, and an upcoming Victorian Container Deposit Scheme extension. It is also looking to strike out into bulk terminals, capable of handling larger quantities of recycling.

It has grown revenue from $4.9 million in 2021 to $6.3 million in the year just gone. The flyer says its cash flow was recurring and secured by multi-year rental contracts, and claims the company has a 40 per cent margin.