Announcing its financial results for the year ended 31 March 2016 today (19 May) Shanks reported that it had seen revenue and profit grow in ‘tough markets’ – with the commercial and hazardous divisions delivering ‘robust’ performances with profit growth of 18% and 1% respectively.
A downturn in profits in the municipal division was pre-empted by the company in a trading update last month, when it revealed that its contract with Cumbria county council had become ‘onerous’ – resulting in an exceptional charge of £5 million (see letsrecycle.com story).
The company also warned of a ‘market dip’ in February, when the company cited weakening commodities as a factor in falling profits for the municipal division.
However, today Shanks did report that it had successfully commissioned two flagship PFI facilities for “long-term profit and cash generation” – with its Barnsely, Doncaster & Rotherham (BDR) and Wakefield contracts entering full service in 2015.
Revenue
The company reported that overall, its revenue increased 7%, with ‘underlying growth’ in all divisions, trading profit rose 4% to £33.4 million, while underlying profit before tax also rose by 4% to £21 million. Overall revenue stood at £614.8 million, while operating profit stood at £9.8 million.
Shanks added that despite the ‘current macro-economic environment’, it is ‘well positioned’ to make progress and meet expectations for 2016/17. The company reported that it is coming to the end of a period of high capital investment in the coming year, with more focus likely to fall on delivering returns from existing assets.
In the longer term, the company has targets improvements in its operational performance and overall growth.
Commenting on the results, Peter Dilnot, Group chief executive, said: “We have delivered revenue and profit growth in 2015/16 despite tough macro markets. Our Commercial Waste Division returned to strong profit growth, our Hazardous Waste Division delivered a robust performance and our Municipal Division experienced market headwinds but commissioned two flagship assets.
“Overall we remain well positioned to make progress and meet our expectations for 2016/17.”
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