Sale of Augean Waste Network well advanced

And, by retaining some assets from the former business, the Group has established Augean Integrated Services (AIS) a hazardous waste disposal consultancy – which began operations on January 2.

In a pre-close trading update ahead of issuing its preliminary results, the Group, which until now has offered collection, storage, transfer, treatment, recovery and disposal of hazardous waste streams via the Waste Network, confirmed sites being sold as going concerns were continuing to trade while the sales process concludes.

However, the Network itself has now closed and the targeted 1 million per annum of overhead reductions have been included in the 2014 budget plan.

According to the interim market report, Augean saw its revenues rise by 13% to 47.8 million in 2013, driven by strong second half performances from the continuing operations of the Group.

Adjusted profit before tax for 2013 is expected to be in line with the revised expectations adopted following publication of the interim results.

Failure

The Waste Networks operating loss of 1.1 million, which was noted in the companys six-month interim financial results in September, was cited on the failure of its East Kent Waste Recovery Facility, which had suffered a series of mechanical failures across its solids handling systems (see letsrecycle.com story). At the time, Augean chief executive Stewart Davies also blamed challenging conditions and little growth within the hazardous waste market.

But, commenting on todays report, Dr Davies welcomed the update as encouraging despite the setbacks of the former waste business.

He said: “The performance of the Group in the second half was encouraging as trading improved in the businesses where we will have continuing operations during 2014. We have continued to benefit from our ability to provide an integrated offering to our customers and believe we are well positioned to strengthen our position in the growing specialist waste markets.”

In other divisions of the Group, Land Resources improved strongly during the last quarter after a quiet summer period, while the revenue generated from Low Level Waste (LLW) and Naturally Occurring Radioactive Material (NORM) disposal increased significantly over the previous year, with combined revenue from radioactive waste disposal totalling 1.6 million.

Future

Meanwhile, the Group continued to invest in assets during the year to support generation of future revenues and cash flows, strengthening its capabilities in the specialist waste markets around treatment of ash from energy from waste incinerators and North Sea oil & gas exploration.

However the investment, plus an anticipated delay in receiving proceeds from the sale of Waste Network division assets, has resulted in net debt at the end of the period rising to an estimated 8.5 million. Augean expects this to reduce over 2014.