The waste management company's parent, the Pennon Group, posted its unaudited results yesterday for the six months ending September 30, 2003. Group turnover rose 12.3% to 234.8 million, profits up 5.8% to 70.6 million. But, the group's debt increased by 48.3 million, taking its total debt just over the 1 billion mark.
Viridor's profit growth outperformed its sister company, South West Water, which posted an increase of just 4.4%. Viridor's operating profit before goodwill was up by 26% to 11.1 million. Pennon's waste arm had a turnover of 90.7 million for the half-year, an increase of 16.3 million in the equivalent period in 2002.
Commenting on the results, Pennon Group chairman Ken Harvey said: “These results demonstrate further profitable growth in the Group, affirming our strategy of concentraging on our two key businesses, South West Water and Viridor Waste.
He added: “As a result of its successful focused strategy, Viridor Waste has delivered continued strong growth in the trading year to date.”
Premium pricing
Landfill and power generation contributions to Viridor's profits were up by 10% and 78% respectively, the latter particularly affected by premium pricing benefits of Renewables Obligations Certificates.
Landfill disposal volumes increased by 9.2% to 1.8 million tonnes, with gate fees increasing by 8%, “well ahead” of cost increases. Viridor also benefited from planning approval for a 2.8 million cubic metre extension to its Pilsworth landfill in North Manchester. Viridor's total power generation capacity grew by 8% to 40MW during the half-year.
Acquisitions
However, much of Viridor's profit rise came through acquisitions – profit excluding acquisitions made since September 2002 grew by 9%. The company bought the waste recycling and transfer station business Churngold Holdings in June 2003 for 19.8 million. The Churngold business operates in the Bristol, Glasgow and Edinburgh areas.
Future prospects for the company are likely to include a 25-year PFI waste management contract with West Sussex County Council. The company is preferred bidder for the 100 million contract to run 11 civic amenity sites and recycling centres as well as providing new facilities including a materials recycling facility (see letsrecycle.com story).
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