Council-owned companies post mixed financial results

Some of the LATCOs that have posted their results within the last month include Liverpool Streetscene Services, Cheshire West Recycling, Hounslow council’s Lampton Recycle 360, Carmarthenshire county council’s CWM Environmental, Cumbria Waste Management as well as Norse (see letsrecycle.com story).

Some councils choose to establish a LATCO as a way of bringing their services in-house and utilising the profit made from the provision of these.

Liverpool

Liverpool Streetscene Services, for example, was established by Liverpool city council in 2016 and collects the council’s waste and recycling as well as providing grounds maintenance, street cleansing and highways services.

The company’s financial results for 2021/22, published on 6 January, showed that it recorded a loss of £42,000. This is a marked improvement from the £1.4 million loss in the previous year (see letsrecycle.com story).

Despite the loss, the document said that “the directors are satisfied that the company has adequate resources, having received confirmation of support of its parent entity, for a period of at least twelve months from the date of approval of these financial statements to enable it to continue trading for the foreseeable future.”

The reduced loss will be particularly welcomed as the management of the company was brought into question by the government in 2021 (see letsrecycle.com story).

Carmarthenshire

Elsewhere, Wales-based CWM Environmental as well as Cumbria Waste Management have reported losses for the previous financial year.

CWM Environmental is owned by Carmarthenshire county council, trading as a waste disposal company with a number of local authority contracts as well as commercial contracts.

According to its latest financial results posted on 31 December, CWM Environmental made a loss of £1,090,040 in comparison to a profit of £260,708 in 2020/21. The document explained that a fire broke out at the materials recovery facility at the company’s Nantycaws site in April 2021, causing a total damage of £664,771, which has been recognised in the financial statements to March 2022.

“The ongoing day to day operations of the business have been disrupted by the fire, which has resulted in an increase in external processing costs from the prior year,” the accounts noted.

Cumbria

And, Cumbria Waste Management, wholly owned by Cumbria county council, made a loss of £3,497,000 in 2021/22 in comparison to a profit of £343,000 in 2020/21.

Posted on 5 January, the document said that this is in part due to increased costs for capping landfill sites and pensions schemes.

The company’s accounts also noted that in a bid to move up the waste hierarchy, it has invested in processes to separate glass, cans and plastic containers.

Hounslow

The two council-owned firms that recorded a profit in the 2021/22 financial year were Lampton Recycle 360 and Cheshire West Recycling.

Lampton Recycle 360 is the waste management arm of Hounslow council-owned company, Lampton 360 Limited.

While the company as a whole reported a loss, Lampton Recycle 360’s profit after taxation for 2021/22 amounted to £301,849 in comparison to a loss of £79,462 in the 2020/21 financial year.

Lampton Recycle 360 spokesperson told letsrecycle.com: “We operate one of the only kerbside-sort schemes in London, and our own materials handling facility, ensuring materials achieve the best possible prices even in a difficult market”

“Our facility generates millions for the council as we process high quality materials, guaranteeing a higher level of income than other local authorities who collect commingled, ensuring access to the markets even when there’s a market downturn as the materials are favoured.”

“We are supporting the council with its recycling and environment targets of 50% recycling rate,” they said, adding that the company has recently expanded a communal food collection scheme and launched a commercial collections service.”

Cheshire West

Cheshire West Recycling has, too, recorded a profit of £526,259 in comparison to a loss of £613,242 in 2020/21, its accounts showed. The company is owned by Cheshire West and Chester council, providing refuse, recycling and garden waste collections on behalf of the local authority.

The document explained that “the single largest positive impact to the company in the year was the significant upturn in the sale price of recovered materials amounting to £2 million. However, it added that “this source of revenue remains uncertain”, noting that in “just two years of operations, the company has seen both 10-year low and 10-year high positions in this market”.

Cheshire West Recycling then recounted some of the challenges it faced in the 2021/22 financial year, which included HGV driver shortage and a subsequent introduction of a retention incentive.

A spokesperson for the council told letsrecycle.com: “The situation we have faced has been similar to that of other organisations nationally. We recognised the emerging issue around driver recruitment in early 2021 and have taken active measures to address these issues. For example, a recruitment and retention scheme has enabled us to continue to provide a quality service uninterrupted for our residents.

The company also said it had to put an interim hire fleet and an internal haulage capacity in place. To mitigate any further risk, several new vehicles are planned to be acquired through 2022/23 and the materials recycling facility at Ellesmere Port will also undergo “a significant update” with the Leslie Road facility becoming a transfer station, the accounts stated.

The company also had to replace containers, the document continued, adding that the replacement costs amounted to £100,000, with fuel price increases costing around the same.

The spokesperson added: “Delivering on the council’s waste strategy through a transformation strategy has included a new fleet of vehicles, the changing of collection routes to improve efficiency and responsiveness, the introduction of larger recycling containers, and a new garden waste collection service.

“The impact of this has been improved recycling rates due to a cleaner and simpler system that residents understand and an increase in the capacity to which residents can recycle. The amount of waste going to landfill is also now at its lowest level ever.”