EMR turnover tops 3 billion in 2008

Full year results submitted to Companies House at the end of last month reveal that the Warrington-based company increased its turnover by 38% – from £2.243 billion in 2007 to £3.099 billion in 2008 as it benefited from high metals prices and high levels of demand in the first half of 2008.

This was boosted by a contribution of £289 million from its acquisitions in both the UK and US. This included the purchase of Glasgow scrap metal merchants J&W Robinson, which the results reveal cost £569,000 in March 2008, and West London's
T Holloway, which cost the firm £23.3 million in June 2008.

However, with the recession causing both prices and demand for recovered metals to slump dramatically in late 2008, EMR acknowledged in the results that “the downturn in market conditions, whilst expected, was more severe than that anticipated by the board”.

And, it revealed that, as a result of reduced purchase and sale volumes, it had to take “corrective measures”, which included “reducing headcount” and temporarily “moth-balling” some sites and operations.

Profit 

The company, which is the UK's largest metal recycling firm, saw its operating profit slump by 47%, from £126.6 million in 2007 to £70.8 million in 2008, and its gross margins – the difference between sales and production costs – squeezed from 16.7% the previous year to 11.6%.

Despite this, the results reveal the company, which last year employed more than 1,700 people across more than 60 sites in the UK, is confident about the future, claiming that “the financial position of the Group remains strong”.

In particular, EMR said it had “significant” access to funding, including over £182 million of undrawn committed borrowing facilities, which it said had been increased since the start of the year by its decision to refinance its UK operations.

And, it claimed that the “corrective actions” it had taken meant that there was “a more streamlined group with access to significant liquidity which is well placed to deal with the weaker economic conditions, yet scaleable for the market recovery”.

Directors

The results also reveal that EMR's four directors – its chairman Philip Sheppard, his cousin Robin Sheppard and brother Clive Sheppard and managing director Colin Isles – were paid a total of £19.493 million in 2008 (along with £46,000 in pension costs), an increase of just 5% from the £18.520 million they received in 2007.

And, the company's highest paid director, believed to be chairman Philip Sheppard, was paid £8.909 million.

Figures

Commenting on the figures, one financial analyst told letsrecycle.com that EMR “look in very good shape with increased cash, turnover and reserves in spite of a difficult market and tight margins”.

It is thought that the company will particularly benefit this year from the recovery in scrap metal prices – albeit not to the high levels seen in early 2008 – and an increased throughput of end-of-life vehicles caused by the government's successful vehicle scrappage scheme.

And, EMR is also working with American plastics recycling company MBA Polymers to develop a UK facility to reprocess plastics from end-of-life vehicles.

It was revealed in February 2009 that the firms, who are working as a joint-venture on the project, aimed to build the 60,000 tonne-a-year capacity plant at a site in Worksop, Nottinghamshire (see letsrecycle.com story), and the results confirm that the facility is expected to become operational in early 2010.