5th Nov 2015 09:23
LONDON (Alliance News) - Waste-to-product company Shanks Group PLC on Thursday said it turned to a profit in the first half thanks to lower one-off costs, and while revenue took a hit from the weak euro, the group said it remains confident on its outlook as signs of improvement are showing in its markets.
Shanks said its pretax profit for the six months to the end of September was GBP2.6 million, compared to a GBP8.6 million loss a year earlier. The loss the year earlier was driven by the company booking exceptional costs of GBP19.8 million, which more than halved to GBP8.1 million for this year. Stripping out the one-off effects, the group's pretax profit fell to GBP10.7 million from GBP11.2 million.
Revenue fell to GBP296.0 million from GBP304.8 million, in line with expectations and due to the company taking a hit from the weak euro. In constant currencies, revenue rose 5.0%.
Shanks said its commercial waste division is performing well thanks to a recovery in its markets and self-help measures the group has taken, with trading profit for its business in the Netherlands rising 78% in the first half in constant currencies. Its Hazardous waste arm is trading on track, despite some challenges from the slowdown in the oil and gas industry, while its municipal division has also been solid.
The group said it will pay a flat interim dividend of 1.1 pence per share.
"We have delivered revenue and profit growth in constant currency in the first half, underpinned by an encouraging improvement in our core Commercial Waste division in the Netherlands," said Chief Executive Peter Dilnot.
"Our expectations for 2015/16 are unchanged and the longer term growth drivers for Shanks remain attractive. We continue to focus on implementing our strategy of driving margin expansion, investing in new infrastructure, and actively managing the portfolio," Dilnot added.
Separately, Shanks also announced on Wednesday that Chairman Adrian Auer will step down once a successor is appointed. The process of finding a replacement has started, Shanks said.
Shanks shares were down 3.8% to 94.555 pence on Thursday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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