WasteCo Group is raising $2 million through a share placement at $0.007 per share to finance a comprehensive turnaround and expansion plan amid ongoing financial challenges and a leadership overhaul.
- New $2 million share offer at $0.007 per share
- Nine-year $40 million Ashburton kerbside contract secured
- New Chair Sean Joyce and CEO Brian Cohalan appointed
- Turnaround plan targets $5 million cost cuts and asset sales
- FY 2026 loss of $12.35 million despite revenue growth to $70.3 million
Capital Raising to Support Turnaround and Growth
WasteCo Group Limited (NZX:WCO) has launched a $2 million share placement priced at $0.007 per share, aiming to bolster its balance sheet and fund a turnaround plan after a challenging financial period. The offer represents 285.7 million new ordinary shares, with the option to accept an additional $1 million in oversubscriptions. Proceeds will primarily support a new nine-year, $40 million kerbside collection contract with Ashburton District Council starting September 2026, alongside funding operational improvements and growth initiatives.
Leadership Overhaul and Strategic Reset
Earlier this year, WasteCo appointed Sean Joyce as Chair and Brian Cohalan as permanent CEO, marking a decisive shift in governance and operational leadership. Joyce, with a background in capital markets and corporate law, has taken a hands-on approach since July 2026 to aggressively execute the company's turnaround plan. Cohalan brings 17 years of Australian waste industry experience, including senior roles at Sita and Cleanaway, and commenced his role on 31 August 2026. Their leadership aims to address longstanding issues of high debt, inefficient operations, and underperforming business divisions.
Turnaround Plan Targets Cost Cuts and Asset Divestments
The turnaround plan focuses on reducing WasteCo’s annual cost base by approximately $5 million through structural rationalisation, contract exits, and reduced reliance on external advisors. The company also plans to divest non-core and under-utilised assets, targeting $10-12 million in sale proceeds to reduce debt. These measures come after WasteCo reported a net loss of $12.35 million for FY 2026, despite a revenue increase from $19 million in FY 2022 to $70.3 million in FY 2026. The loss was driven by rising interest rates, high debt servicing costs, labour and fuel price inflation, and operational inefficiencies.
Operational Improvements and Contract Wins
WasteCo has undertaken a significant restructure of its senior leadership and commercial operations, including replacing specialised vehicles to improve margins and launching a new Medical and Quarantine waste transfer facility in Cromwell. The company’s geographic footprint now spans all of New Zealand, including recent expansion into the North Island through the Civic Waste acquisition. This broad presence supports WasteCo’s strategy to consolidate the fragmented waste services market through organic growth and acquisitions.
Securing the Ashburton District Council kerbside contract underlines WasteCo’s ability to win long-term, stable revenue streams. The company anticipates revenues to continue growing, targeting $85 million by FY 2028, with a focus on improving profitability through enhanced labour and asset utilisation.
Debt Profile and Financial Outlook
As of 31 March 2026, WasteCo’s debt stood at around NZ$40.1 million, including asset finance and convertible notes, with finance costs of NZ$5.5 million. The company repaid NZ$7.3 million of principal in FY 2026 and has access to a $10 million working capital facility from Pacific Invoice Finance to support liquidity and growth. WasteCo is actively managing creditor relationships and exploring refinancing options for its senior debt and convertible notes.
For FY 2027, WasteCo expects to reduce losses by $2.5 million to $4 million through cost savings and divestments, aiming for operating EBITDA similar to FY 2026 while cost efficiencies take effect. By FY 2028, the company forecasts significant revenue growth, $5-6 million in annual cost reductions, improved asset utilisation, and a marked increase in operating EBITDA.
Industry Position and Growth Strategy
WasteCo is New Zealand’s only listed waste solutions company, operating a diverse range of services including household, commercial, industrial, and government waste management, as well as medical and quarantine waste treatment. The company’s national footprint and long-term contracts provide a recurring revenue base, while its acquisition strategy targets small to medium-sized enterprises in the fragmented waste sector.
The board emphasises the importance of restoring shareholder confidence and operational discipline, with a commitment to transparent communication and aggressive implementation of the turnaround plan. WasteCo’s success hinges on executing multiple initiatives simultaneously, from cost control and asset sales to operational improvements and strategic acquisitions.
Bottom Line?
WasteCo’s $2 million capital raise and leadership overhaul mark a critical juncture; execution of its turnaround plan will be pivotal to reversing losses and unlocking growth potential.
Questions in the middle?
- Will WasteCo secure further equity investment to strengthen its balance sheet beyond this placement?
- How quickly can operational efficiencies and cost reductions translate into improved profitability?
- What impact will the planned divestments have on WasteCo’s service capabilities and market position?