Construction firm to buy two county waste contracts

Subject to legal agreements from the county councils concerned, Merseyside firm Environmental Waste Controls Ltd will hand over the contracts, valued at a combined £5 million per year.

EWC said the move would allow it to focus on a five-year contract it has won with Warrington borough council.

Norwich-based May Gurney achieved revenues of £215 million for the year up to September 2007, and is already involved in waste management through construction projects including landfill engineering. The company is part of the SRM consortium currently seeking a PFI waste contract with Norfolk county council (see letsrecycle.com story).

And, it had already been involved in the operation of the Norfolk sites after securing a 50% investment in the contract from April 2007.

Payment

May Gurney said its acquisition of the household waste recycling contracts would involve a £3.2 million cash payment, as well as taking on £1.7 million of debt.

A further £6 million could be paid out to EWC depending on the contracts' future performance.

Both the Norfolk and Gloucestershire contracts have more than five years left to run, the company said. It pledged to bring the quality of the counties' household waste recycling centres “up to a level that also encourages recycling of household waste brought directly by members of the public”.

In its latest financial results statement, the company said it was eager to make further acquisitions in the waste management market, which it saw as “highly fragmented”.

David Sterry, chief executive of May Gurney, said: “The issue of waste, and, in particular its treatment and disposal is growing in significance on an almost daily basis.

“I am delighted to announce this acquisition, which enhances our waste services capabilities in the local government market and we look forward to expanding our presence in this area of growing challenge for our customers,” Mr Sterry said.

EWC

EWC chairman Bill Edwards insisted the selling of the household waste recycling centre contracts would ultimately help his company to provide a better service to its customers.

He said: “This transaction will ultimately develop a better financial status for the company and has significantly strengthened our balance sheet which will in turn help EWC give a better service to our customers, and further improve contract performance.”

The five-year Warrington contract begins in February 2008. EWC revealed it was also seeking a number of other contracts with county councils.

The company said it had restructured its senior management team following the cash injection from the sale of its contracts. This included Peter Cooke being appointed managing director, David Leah appointed finance director and Joe Major operations manager. Steve Dodds was appointed commercial director for Scotland, Ireland and the Isle of Man.