Shanks Group posts loss of £35.3 million
Waste management company Shanks Group plc, has today (16 May) released its results for the year ended 31 March 2013 and revealed that the company saw a pre-tax loss of £35.3 million for the year.
According to the group, the losses were due to ‘very difficult markets’ and ‘record lows’ in earning from the construction sector.
The results are the first to be released since the business restructure, following the appointment of new Group Chief Executive, Peter Dilnot in February 2012.
The business was reorganised into ‘market-facing segments’ of solid waste, hazardous waste, organics and UK municipal waste.
Profit performances for UK municipal waste were up 80 per cent, organics up seven per cent and hazardous waste were ‘unchanged, maintaining record prior year performance’.
However, solid waste was down 50 per cent, which was attributed to the ‘impact of recessionary markets and record construction lows’.
Commenting on the results, Peter Dilnot, Group Chief Executive of Shanks Group plc, said: “This has been a challenging and transformational year for Shanks. Against a backdrop of very difficult markets, we have reorganised the group into four market-facing segments to enable us to manage the business more effectively and create a platform for future growth.”
“This new structure is already delivering benefits and, while solid waste end markets are expected to remain challenging in the year ahead, Shanks is on track to emerge a leaner, more focused and stronger business for the future. As a sign of confidence in the group’s medium-term growth prospects, the Board is pleased to propose a maintained final dividend for the year.”
Despite the ‘very challenging solid waste markets’, Shanks said it was seeing ‘resilient performance’, adding that the year 2012/13 saw total cost savings of £17 million delivered, with £11m operational savings plus £6 million savings through the structural cost programme, including ‘headcount reduction’ of 310 full time employees.
The group added that the company had a ‘robust balance sheet’, with ‘lower than expected’ core net debt at £177.3 million, despite ‘non-trading and exceptional charges’ of £61.8 million ‘principally reflecting restructuring and impairment in solid waste’.
Overall, the structural cost programmes were said to be ‘on track’ to reduce costs by £20 million per annum by 2015/16, while the investment programme was said to ‘continue to deliver expected returns’ and have a ‘promising pipeline’.
The year beginning January 2013 has already seen Shanks expand its operations, with company kicking off the year by signing a 25-year private finance initiative (PFI) contract with Wakefield Council.
The deal, worth an estimated £750 million, will see Shanks construct a 230,000 tonne residual waste treatment facility in South Kirkby, Yorkshire.
Shanks has also recently opened a new 75,00 tonne mechanical biological treatment (MBT) facility at Southern Resource Park in Barrow, Cumbria and was last week awarded a five-year waste contract with Glasgow Airport.
Read Shanks Group plc’s annual results for the year 2012/13.