Shanks sees profits rise 3% for first half of year

Waste management firm Shanks Group has credited the strong performance of its hazardous and municipal waste businesses for a growth in profits for the first half of 2013/14.

The companys half year results covering April to September published today (November 7), show a 3% rise on pre-tax profits – rising to 18.3 million – despite what chief executive Peter Dilnot has described as difficult trading conditions, with waste volumes yet to significantly increase in the wake of the recession.

This follows a challenging 2012/13 period for the company, in which the company posted a pretax loss of 35.3 million, which lead to a restructuring of the business, including the sale of its commercial and industrial waste business to rival Biffa for 9.5 million last month (see letsrecycle.com story).

‘The market is still incredibly tough in terms of the volume of waste arising and there still hasnt been a big pick up in the amount generated across Northern Europe.’

Peter Dilnot, Shanks

Shanks has singled out the performance of its hazardous waste division, which saw underlying profits rise 5%, up to 11.1 million from 9.9 million for the same period in 2012/13, as a key area of success for the business.

Meanwhile, the company said that it is continuing to benefit from the role out of new contracts through its UK municipal arm, which saw profits leap increase from 4.4 million to 4.7 million. This includes the 750 million PFI contract, signed with Wakefield council in January (see letsrecycle.com story), for which works have started.

‘Headwinds’

Speaking to letsrecycle.com, Mr Dilnot said that the results had been achieved despite market headwinds that were continuing to challenge the waste industry.

He said: We have had a strong first half of the year, with revenue remaining relatively flat, but profit up. All of our core divisions have performed well and we are also investing heavily in the business, both in hazardous waste and UK municipal.

The market is still incredibly tough in terms of the volume of waste arising and there still hasnt been a big pick up in the amount generated across Northern Europe. As a result there is price pressure in terms of gate fees as people compete for that volume.

Recyclate prices also came off last year and my view is that they are unlikely to recover to the peak levels that they may have once reached. But, despite these market headwinds we are still achieving profit growth.

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.