Waste Recycling Group reveals losses of 4.9m

The 4.9m losses also dragged profits down, with ordinary activities before tax revealing a slump of 51% from 2001 figures of 10.1m to 2002 figures of 4.9m.

The figures, revealed in the Group’s interim results for the last six months showed the Group had incurred the 4.9 losses, largely through “delay and uncertainty regarding the legislative framework governing the composting of waste and the application of waste-derived material to land, along with the long term nature of our research and development programme, had led the Group to provide against expenditure and trading debt associated with this activity incurred to date, totalling 3.5million”.

Figures also revealed a 7% increase in profit before tax, goodwill amortisation and exceptional costs. The 7% increase from 2001 figures of 20.2m to 2002 figures of 21.7m was partly said to be assisted “by a full six months contributions from Integrated Waste Management (IWM) which was purchased in the Autumn last year.” However, profits stripping out tax, goodwill and exceptionals actually revealed a 51% decline in profits for the Group.

Growth rate in earnings per share was also down on last year’s growth rate of 15% to just 11% for this year’s June 2002 figures. In June 2002, shares rose only by 11% to 12.9p, compared to June 2001 figures which showed increases by 15% to 11.6p a share.

Slowdown

The Group’s chairman James Newman said he thought the results were solid considering the slowdown in the marketplace. He said: “These are solid results, despite a slowdown in the market growth and a more prudent approach to costs and revenue recognition,” said Mr Newman. He added: “However increasing legislation and higher standards within the industry will continue to put pressure on margins.”

Mr Newman also revealed that despite winning a new contract with Bradford Council for 160,000 tonnes per annum, which started in July 2002, the loss of a Cambridge contract which delivered 165,000 tonnes per annum will affect trading performance in the second half of the year.

The Group admitted to making progress on improving the services it provides, “however increasing legislation and higher standards within the industry would continue to put pressure on margins”.