The group, which also owns South West Water, said that Viridor Waste’s operating profit rose by 16% from 13.1 million to 15.2 million, before goodwill amortisation of 300,000. Its operating margin, excluding landfill tax, was 17%. Earnings before interest, tax, depreciation and amortisation amounted to 32.1million.
The waste operation’s turnover rose by 18% from 106.1 million in 2000/01 to 125.3 million in 2001/02.
Of this, just under half came from existing trade, at 8.0 million. The bulk came from 5.0 million in the rise in landfill tax, and 6.2 million from acquisitions.
Capital expenditure for the year was 18.3 million, which was primarily invested in the landfill operations, up from 12.1 million the previous year.
Earnings per share rose by 31% to 54.3p, and the full year dividend is up by 4% to 37.5p.
Temporary
Pennon said that Viridor’s first half year performance had been particularly strong, bolstered by temporary contracts.
The increased profitability arose from volume and price increases in landfill, and from volume increases and cost savings in the waste collection operation, it added.
The group said that Viridor Waste worked to a two-pronged strategy, the first of which is to exploit fully its landfill assets.
This is based on the belief that the UK is facing an increasing shortage of landfill disposal capacity because of the reluctance of local authorities to give planning permission for more sites.
Landfill
Viridor has 73 million cubic metres of landfill capacity for which it already has planning consent, and so is well-placed to exploit this shortage, the group said.
The second element of the strategy is to pursue opportunities to help deliver the targets of the Government’s new waste and renewable energy strategies.
During 2001/02, Viridor acquired two waste businesses, Suffolk Waste Disposal and Lavelle & Sons for a total of 12.1m. Shortly after the year end, on 9 April, Viridor swallowed up St Helens-based glass reclamation specialist Richardson for 11.9m.
The company said that all three acquisitions reinforced its waste strategy by either adding landfill capacity or enhancing its materials transfer and recycling capability.
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