Bingo had been at a 12-month high of $3.20 in August. Macquarie said it was concerned at how quickly things had deteriorated. "Our key concern is the pace at which the market has slowed given benign AGM commentary in November," Macquarie analyst Peter Steyn said.

Macquarie was the lead manager of the float, which raised $440 million.

Mr Tartak said on an investor call on Monday that Bingo had signalled some softening in the residential market at its annual meeting on November 14, "but what we've seen over December and January has indicated a faster rate of decline than we expected".

Smaller competitors had also been under-cutting prices to try to win work in a slowing market.

Squeeze on margins

Bingo said underlying earnings before interest, tax, depreciation and amortisation were now expected to be flat compared with last year. Bingo has previously forecast underlying EBITDA growth in the range of 15 to 20 per cent.

Mr Tartak said there had been a faster-than-anticipated softening in multi-dwelling residential construction activity across the group's main markets of Sydney and Melbourne.


While volumes were ahead of last year, the anticipated growth hadn't met internal forecasts, with the company also blaming extra competition in the building and collections market for a squeeze on margins after downward pressure on pricing.

Mr Tartak also said that Bingo had now decided not to implement price rises to customers until 2019-20202, in line with the softening residential market and delays in the introduction of a Queensland waste levy. This meant that Bingo would "absorb increased costs" for the whole of 2018-19, which included higher tipping and transport costs. That absorption of costs would have an impact of about $4 million.

Bingo also said it had reconfigured previous plans for a redevelopment of some of its recycling facilities in NSW and Victoria, which would cut capital spending by between $25 million and $30 million compared to an original plan but have a $4 million negative impact in 2018-19. But it would put much more pressure on margins with some facilities offline, and an additional negative impact on margins of between 250 and 300 basis points.

Mr Tartak also told investors on Monday that it had been advised by the Australian Competition and Consumer Commission that a final decision on the proposed $578 million acquisition of Dial-A-Dump was expected on February 28.

Under that deal, Dial A Dump founder Ian Malouf will hold a 12 per cent stake in the enlarged Bingo and join the Bingo board if the transaction wins approval from the ACCC.

Mr Malouf and a handful of minority shareholders will be paid $378 million in cash and be issued with $200 million in Bingo shares. Macquarie's Mr Steyn said there was now a lot riding on Bingo gaining approval for the deal, with the company more dependent on it to deliver "through the cycle" growth.

Bingo listed on the ASX in May 2017. Its shares were at $3.17 in early October 2018 before the global sharemarket sell-off. which extended for almost three months until the end of December, but at the close of trading on Friday had slipped to $2.30.