Waste-to-product Shanks Group expects stronger underlying for second half of 2015

Source: Shanks Group plc

Milton Keynes, UK — The Shanks Group plc, the international waste-to-product business, has released its Annual Report 2015 entitled „Making more from waste“. In his introductury statement, the group`s chairman Adrian Auer underlined that the waste industry, in particular the solid waste market segment, has continued „to experience very challenging market conditions“, especially in the first half of the year. Volumes and prices remained under pressure and there has been further decline in the value of recyclate products. According to him, „these factors led to a difficult first half, but slight improvement in the markets combined with further benefits from our cost and investment programmes delivered a stronger underlying second half“.

And Peter Dilnot, Group Chief Executive, judged that – after a successful 2013/14 – „the 2014/15 financial year proved more challenging with a further downturn in our core Benelux Solid Waste markets“. And he added: „The short-term market conditions remain affected by continuing overcapacity, low recyclate prices and competition from both public and private waste management operations. The stabilisation of the Benelux economies and the return of some activity to the Dutch housing market are encouraging indicators of a future improvement in the market, but we do not expect a surge in waste volumes arising.“

At a divisional level, Shanks` Solid Waste Benelux Division experienced a particularly challenging year as a result of a further deterioration in its end markets during the first half. Revenues fell by 1 percent at constant currency to €379m, with trading profit declining by 35 percent at constant currency to €15.2m. Hazardous Waste trading profit fell by 11 percent at constant currency on broadly flat revenue, due to a weaker mix and operational issues in the first half. The Organics Division performed in line with our expectations, with revenue falling by 5 percent to €38.6m and trading profit by 8 percent to €4.4m due to the anticipated lower pricing from long-term contracts renewals and by increased North American bidding costs. The UK Municipal Division again performed well, with a 5 percent increase in revenues to £145m and a 9 percent increase in trading profit to £10.0m.

Peter Dilnot forecasts: “ Our business improvement programmes have resulted in a stronger underlying second half and have given us momentum going into 2015/16.“

The full report can be downloaded under shanks.co.uk.

Sorce: Shanks Group plc