Shanks delivers robust performance in 2013/14

Waste management firm Shanks Group increased pre-tax profits by 14% in the 12 months to March 31, following its exit from the UK solid waste sector, it was announced today (March 15).

The companys full year results for 2013/14, published this morning, show that underlying profit before tax stood at 30.2 million for the year, an increase on the 26.5 million reported during the previous 12 months.

Following a challenging 2012/13, Shanks oversaw a major restructuring of its operations including the sale of its commercial and industrial waste business to rival Biffa for 9.5 million (see letsrecycle.com story).

The company also closed materials recycling facilities (MRFs) at Blocharin and Kettering selling the Blochairn facility to Glasgow city council and selling on assets from the Kettering site in a move that has generated around 15 million for the business.

Despite the sale of these assets, Shanks has reported that its UK Municipal Division has performed strongly, with a growth in revenue of 19%, up to 137 million, driven by the first full year of its residual waste treatment contract with Wakefield council.

The 25-year Wakefield deal, signed in early 2013 (see letsrecycle.com story), is believed to be worth a total of 750 million to the firm over its lifetime, and involves the construction and operation of a 230,000 tonnes per year capacity energy from waste plant at South Kirkby in West Yorkshire. The site is expected to begin commissioning in the summer 2015.

Shanks has also said that it is in negotiations to secure financial close on the Derby PFI contract following a ruling in the companys favour over its plans to build a gasification facility at Sinfin Lane (see letsrecycle.com story).

Robust

Speaking to letsrecycle.com, Peter Dilnot, Shanks group chief executive, said: Overall it is a really robust set of results. In terms of growth, in our hazardous waste business we have a strong market position and in UK municipal we have 200 million worth of projects being built and those will come on stream in the next few years.

Referring to the challenges faced by the business in recent years, and the subsequent restructuring, Mr Dilnot, said: I think we are not out of it quite yet. At the moment we are at the bottom of the cycle. We have done the vast majority in terms of facilities closures and we are now merging some back office and support functions. That takes time, you cant turn one process off and then switch on another one.

And, commenting on Shanks main focus in the UK, since the sale of its solid waste business, he added: Or business is centred on a good number of PFI assts. Those assets are the core to what we do. We are investing in those very significantly and we can see the municipal business doubling its profits in years to come.

Looking forward, Shanks has said that it will seek to broaden the scope of its hazardous waste business by investing in more treatment capacity as well as seeking to grow in the UK PFI market with over 200 million of capital committed to projects currently in construction.

Based in Milton Keynes, Shanks has three core business activities: hazardous waste; organics and UK municipal (PFI/PP), having exited the solid waste market. The Group operates in the Netherlands, Belgium, UK and Canada.