Final Results

22 March 2016

Augean plc ("Augean" or "the Group")

Final results for the year ended 31 December 2015

Augean, one of the UK's leading specialist waste management businesses, announces its preliminary results for the year ended 31 December 2015.

Financial highlights

From continuing operations and excluding exceptional items

· Revenue increased by 11% to £61.0m (2014: £55.0m)

· Profit before tax increased by 12% to £6.0m (2014: £5.4m)

· Net operating cash flows increased by 45% to £11.1m (2014: £7.7m)

· Return on capital employed (1) increased to 11.4%, from 10.7% in 2014

· EBITDA(2) increased by 20% to £12.1m (2014: £10.0m)

· Basic earnings per share increased by 13% to 4.65p (2014: 4.13p)

· Net debt decreased by £1.4m to £4.3m (2014: £5.7m)

· Proposed dividend per share of 0.65 pence, an increase of 30% (2014: 0.50 pence)

· £20m Bank facility renewed on 21 March 2016 with extra £10m specifically to fund acquisitions

Operational highlights

· Strong performance from Energy & Construction driven primarily by high level of construction soils activity during the year

· Positive revenue and margin performance in Radioactive Waste Services ("RWS") despite lower volumes of waste received

· Turnaround plan underway within Industry & Infrastructure focused on extending the range of services and increasing market penetration

· Very strong results from Augean North Sea Services ("ANSS") with a number of significant contract wins with oil & gas operators and tier-1 customers

· Purchase of the remaining 19% of shares in ANSS from the minority shareholder, for a cash consideration of £1.05 million

· Further progress within Augean Integrated Services with additional total waste management contracts secured with blue-chip customers

Outlook

· Encouraging start to 2016 with a number of contracts secured with Tier-1 customers across the Group's businesses

· Continued emphasis on moving Group revenues to long-term contracts and frameworks

· Board focused on further improving the returns from capital employed across the Group

· Group as a whole is trading in line with market expectations.

Commenting on the Results, Dr Stewart Davies, Chief Executive Officer, said:

"2015 was a year of significant progress for the Group resulting in double digit growth in revenue, operating cash flow and EBITDA. The results were driven by a strong performance across a number of the Group's businesses in which we have built sustainable market positions. Our ability to work closely with customers to provide specialist services focused on hazardous waste throughout the supply chain was reflected in a number of strategically important contract wins during the year.

The Group remains focused on the execution of its strategy to deliver shareholder value and further direct contracts with tier-1 producers have been secured, improving forward visibility of earnings. The portfolio effect of maintaining five businesses in diverse markets and the continued focus of the Group on further increasing returns on its investments means that the Board remains confident of maintaining its track record of year-on-year increases in profitability in 2016."

There will be a meeting for analysts at 9.30am today at the offices of FTI Consulting, 9th Floor, 200 Aldersgate, Aldersgate Street, London, EC1A 4HD. For further information please call 020 3727 1614.

For further information, please call:

Augean plc

Dr Stewart Davies, Chief Executive 01937 844 980

Richard Laker, Group Finance Director

N+1 Singer

Shaun Dobson 020 7496 3000

Richard Lindley

Jennifer Boorer

FTI Consulting

Oliver Winters 020 3727 1000

Adam Cubbage

Fiona Walker

(1) Return on capital employed is defined as operating profit divided by average capital employed, where capital employed is net assets excluding net debt

(2) EBITDA means earnings before interest, taxation, depreciation and amortisation

Chairman's statement

2015 was another encouraging year for the Group, with year-on-year increases in revenue, profit, operating cash flows and return on capital employed, compared to 2014. The Group is currently trading in line with expectations in 2016.

The strategy for growth, developed and implemented by Stewart Davies and his team, is delivering tangible results with further evidence of traction across several areas of the business both commercially and in financial terms.

Total revenue, from continuing operations, increased to £61.0m (2014: £55.0m). Profit before tax from continuing operations and before exceptional items increased by 12% to £6.0m (2014: £5.4m), with an increase in basic earnings per share on the same basis of 13% to 4.65 pence (2014: 4.13 pence).

Operating cash flows, before exceptional items, increased from £7.7m to £11.1m. The Board continues to support reinvestment in strategic business growth, including £1.1m paid to purchase the remaining 19% of shares in Augean North Sea Services in March 2015. The Group has successfully refinanced its bank facility on improved commercial terms, increasing the available debt funding to £20m, with the option of a further £10m exclusively to fund potential acquisitions. All investments are made with the expectation of increasing levels of return and acceptable EBITDA1 payback periods. Our return on capital employed2 for the year increased to 11.4% (2014: 10.7%) and our total net debt fell by £1.4m during the year to £4.3m, after total capital expenditure of £7.5m.

Our Energy and Construction business had a strong year, with levels of material into landfill above initially anticipated input volumes. In 2016 we anticipate a more normalised level of inputs, subject to activity in the construction market. The impact of the revised Landfill Tax excise notice issued by HMRC in December 2015 on volumes of waste sent to landfill in England and Wales is not yet fully apparent. However the level of construction soils received by the business in 2016 to date has been in line with management expectations. Air pollution control residues ("APCR") arising from the Energy-from-waste sector volumes were lower than last year, however significant volumes of other waste streams contributed strongly to the growth in profit of that business as well as the significant operating cash flow generation of the Group in the year. There remains clear management focus on growing contracted APCR volumes into the business, as maintaining our share of this growth market is a key strategic imperative in the short and medium term. We continue to actively tender for APCR contracts, as they arise, with both existing and new customers.

The Radioactive Waste Services business saw a reduction in volumes in 2015 but was able to optimise pricing and deliver a pleasing increase in revenue and profit. Through 2015 and early 2016 we have seen reductions in the level of customer expenditure to treat the waste, in part due to UK Government spending reviews and we expect this theme to continue in 2016. However, the Group's site at East Northants remains a key element of national infrastructure for the disposal of low-level radioactive waste in the medium term. The Group remains actively engaged with customers to obtain further clarity regarding their predictions of output for the year.

The Industry & Infrastructure business suffered a setback in the performance of its Avonmouth site during 2015, however a turnaround plan is underway to return it to profitability in 2016.

The second year of trading for the Augean Integrated Services business saw further progress, with increased revenues and a number of three year total waste management contracts won with blue-chip customers, the benefits of which will be seen in future years. This contributed to the growth seen in the contracted business which increased 44% over the prior year. The high temperature incinerator at the Group's East Kent site provided further unexpected challenges during the first half of 2015, which was frustrating. However, equipment replacement was undertaken in the second half of 2015 and subsequent management actions have been taken to improve the operational uptime of this asset, which remains of high strategic importance to the Group as more contracts are secured.

Augean North Sea Services (ANSS) responded positively to changes in its market by securing several new contract wins during 2015 and early 2016. This evidences the continued execution of the strategy to diversify this business away from exploration drilling waste management, on which the business was originally built, to an increased proportion of revenue generated from production waste management and onshore industrial services, while maintaining the high proportion of total revenues generated directly from major oil & gas operators. Subsequent to the year end, a strategic investment was made in a site at Great Yarmouth to support a new contract with a major operator. This represents a new location for the Group and opens up further potential commercial prospects from the southern North Sea. As previously anticipated, the Board expects 2016 to be a more challenging year for the ANSS business than 2015, particularly in light of further reductions in oil prices during 2015 and reducing drilling activity, but notes that management is broadening the service offering to customers and focus on cost control in the current conditions. The strategic move by ANSS to generate a lesser proportion of its revenues from exploration drilling waste management has led the Board to conclude that a write down of certain thermal treatment assets on Teesside was necessary, based on our view of drill cuttings to be processed by those assets in the short to medium term. As previously announced, a non-cash impairment loss of £2.9m has been reflected as an exceptional item in our income statement for the 2015 financial year.

Health and safety continues to remain the highest priority for the Board, management and employees across the Group. Total accident levels remained at the same low level in 2015 as in 2014, underpinned by further improvement in positive indicators of safe behaviour. The Board continues to recognise the risks faced by our people, who work in environments moving, treating and disposing of hazardous wastes. In November 2015, the Group celebrated the achievement by ANSS of its tenth anniversary without a lost time incident in its offshore activities.

Protecting the environment is not only a matter of compliance with permits, but encompasses our broader responsibilities to society and future generations. The Group diligently monitors its performance in this regard, the results of which are regularly reported to the Board. All sites in England are ranked by the Environment Agency as Category A or B and the Scottish Environmental Protection Agency rates all of the Group's sites in Scotland as Excellent.

The Board recognises that our business success is dependent on the quality, diligence and hard work of all Augean's employees and I would like to take this opportunity on behalf of the Board to thank everyone who has contributed to the Group's continued progress during the year.

As in previous years, I was pleased to note the addition of new shareholders to our register during the year and again I am thankful for the continued support from all of our investors.

The Board welcomed John Grant as a non-executive director in August 2015. I am pleased to see the Group benefitting from the extensive experience that John has brought. Rory Macnamara has declared his intention to step down from the Board at this year's AGM. I would like to thank Rory for his contribution to the Board over a period of almost ten years and for his diligent Chairmanship of the Audit Committee. In advance of Rory's departure, I also look forward to welcoming Rod Holdsworth to the Board on 23 March 2016. Rod will also assume the Chairmanship of the Audit Committee, upon Rory's departure, and I am confident that he will also add further qualities to the Board as a whole, given his current and past executive experience.

The Group's balance sheet and operating cash flow remain robust and the Board has proposed a 30% increase in the dividend payment to 0.65p per share. This reflects confidence in the prospects of the Group and the Board's ongoing commitment to pay a progressive dividend to its shareholders, with the dividend being covered3 7.2 times (2014: 8.3 times).

The Board continues to remain focused on improving the returns from capital employed for the Group as a whole whilst being prepared to invest in opportunities for the future, to build on the progress delivered to date. I look forward to another year of profitable growth for the Group.

Jim Meredith

Non-Executive Chairman

21 March 2016

1 EBITDA means earnings before interest, tax and depreciation

2 Return on capital employed (ROCE) is defined as operating profit divided by average capital employed, where capital employed is net assets excluding net debt

3 Dividend cover based on earnings per share from continuing operations and excluding exceptional items

Strategic report

Marketplace

Augean operates in market sectors that have distinct strategic drivers and this is the rationale for the focus of the five business units of the Group to develop the customer focus relevant to each sector. There are certain regulatory matters that are common for all of the units, relating to hazardous waste. The primary market sectors are:

· Hazardous waste

· Energy-from-Waste and Biomass Energy

· Construction waste

· Nuclear decommissioning

· Oil recovery from waste

· North Sea Oil & Gas

Our Strategy

The strategy of the Group set out in March 2014 is focused on growing shareholder value by developing sustainable market positions. Augean builds competitive advantage by working with customers to provide solutions whereby Augean delivers specialist services focused on hazardous waste. The three core elements of the strategy are:

· Develop sustainable market positions

· Grow through client-focused solutions

· Grow shareholder value

Further information in respect to the Group's market and strategy can be found in the Group's Annual Report.

Operating review

Introduction

The Group delivered a strong set of financial results in 2015.

The results of the Group, from continuing operations and excluding exceptional items, show that:

· Total revenue increased by 11% to £61.0m;

· Profit before taxation increased 12% to £6.0m;

· Net operating cash flows increased by 45% to £11.1m;

· Basic earnings per share increased by 13% to 4.65 pence; and

· Return on capital employed increased from 10.7% to 11.4%.

During 2015, the Group operated through five business units.

The operating cash flow of the Group was used to fund the future growth of the Group, with total capital expenditure investment of £7.5m. This comprised £5.5m of maintenance capital expenditure to lengthen the productive life of existing assets (including £1.3m on landfill cell engineering and £0.2m of cell capping) and £1.8m of development capital expenditure for targeted future growth, along with a £0.2m deferred consideration payment relating to the purchase of the East Kent site.

The Group remains committed to growth in all of its businesses and markets, through both organic and acquisitive means, where appropriate. Aside from its strong operating cash flows, the Group also had a £13.25m bank facility in place as at 31 December 2015, compared to net debt of £4.3m, equivalent to 0.4 times EBITDA1, from continuing operations and before exceptional items. The Group has successfully completed the refinancing of its bank loan facility in March 2016, at an increased level of £20m, plus a further optional £10m facility increase exclusively to fund acquisitions. This facility leaves the Group well placed to take advantage of investment opportunities that accelerate the strategy and are value enhancing for shareholders.

As previously announced, during 2015 the Board took the strategic opportunity to purchase the remaining 19% of shares in the Augean North Sea Services business from the minority shareholder, for a cash consideration of £1.05 million. This is equivalent to 2.7 times 2015 EBITDA and the transaction was accretive to earnings per share in the year. The business has performed well, despite challenging conditions in the North Sea oil & gas market. The Board continues to monitor this market very closely but remains confident that the market positioning of that business, including the on-going execution of its diversification strategy, leave the business well placed in the medium to long term.

The Group employed an average of 345 staff (2014: 300) over the course of the year. The number of employees in the Group has increased during 2015 as the Group has continued to invest in high-quality employees who remain key to the future growth plans and continuing execution of the strategy of the Group.

Business performance

The Group operated through five business units during 2015 and 2014 (Energy & Construction, Radioactive Waste Services, Industry & Infrastructure, Augean Integrated Services and Augean North Sea Services). The performance of each of the five business units in 2015 is set out below.

Energy & Construction (E&C)

The principal activity of this business unit is the disposal of air pollution control residues (APCR), incinerator bottom ash (IBA), asbestos and other contaminated waste materials and soils, mainly from the Energy-from-Waste, biomass energy and construction sectors. This is primarily achieved through treatment and ultimate landfill in permitted hazardous and non-hazardous sites at Port Clarence, a permitted hazardous site at East Northants Resource Management Facility (ENRMF) and a permitted non-hazardous site at Thornhaugh, near Peterborough.

Revenues, excluding landfill tax and intra-group trading, increased by 29% to £20.2m (2014: £15.6m), with the significant increase primarily due to high volumes of construction soils, which continued through the second half of the financial year, and compensated for a reduction in the volumes of APCR treated in 2015 compared to 2014.

The total volume of waste disposed by the E&C business increased by 31% to 434,000 tonnes in 2015, from 332,000 tonnes in 2014, with APCR volumes decreasing by 11% from 85,000 tonnes to 75,000 tonnes and other waste streams increasing by 45% from 247,000 tonnes to 359,000 tonnes. Average gate fees on APCR streams increased by 8% and decreased by 1% on soils and other waste streams with an overall decrease in APCR revenue of 5% and increase in other waste revenue of 42%, as a result of the changes in volumes on those waste streams, compared to 2014. Non-waste revenue streams, from mineral extraction royalties and energy generation from landfill gas, totalled £0.7m in the year (2014: £0.7m).

The higher volumes of lower margin contaminated soils received by the business unit caused the operating profit and EBITDA of the business unit to grow at a lower rate than revenue, with EBITDA increasing by 15% to £9.5m (2014: £8.3m), against the 29% increase in revenue and this EBITDA growth contributing to the strong operating cash flow of the Group as a whole during 2015. Operating profit before exceptional items improved by 3% to £6.5m (2014: £6.3m), with depreciation in this business unit primarily driven by the input volume and thus the rate of engineered landfill cell capacity consumption, rather than the passage of time.

The high level of construction soils activity during the year was attributed to high levels of activity in the preparation of construction sites. It is not anticipated that volumes of construction soils will be as high in 2016 and beyond. In December 2015 HM Revenue & Customs issued a revised excise notice in respect of landfill tax, updating the landfill tax treatment of various waste streams, which could potentially impact the amount of landfill tax arising on the disposal of certain waste materials, including construction soils, and, in turn, the disposal or treatment route selected by the customer for those materials. The impact of the revised excise notice on customer behaviour in the market is not yet fully apparent. The early part of 2016 has seen a reduced level of construction soils received by Augean sites, albeit that the reduction is from the unusually high level of 2015, back to a more normalised level which, accordingly, is in line with management expectations.

APCR volumes in the second half of 2015 were similar to those seen in the first half (1% higher). An increase in the volume of APCR treated by the Group remains a key strategic objective in the short and medium term, with the business well-positioned to utilise its additional investment in treatment capacity to service the growth in Energy from Waste and biomass capacity in the areas of the UK served by our sites.

Total capital investment in the E&C business was £3.8m in the year (2014: £2.3m), of which £2.8m was in respect of lengthening the productive life of existing assets (maintenance capital expenditure) and £1.0m was investment in the targeted future growth of the business (development capital expenditure). The maintenance capital expenditure included £1.3m in respect of landfill cell engineering and £0.2m in respect of the capping of full landfill cells. Excluding landfill cell-related capital expenditure, total capital spend was lower than 2014, due to certain one-off site infrastructure projects occurring in 2014.

Radioactive Waste Services (RWS)

The principal activity of this business unit is the treatment and disposal of low level radioactive waste generated from the UK nuclear estate. The disposal of the waste is facilitated by the Nuclear Decommissioning Authority (NDA) as the waste is generated primarily from the decommissioning of redundant power plants and research facilities, with the RWS business bidding to dispose of the waste through a framework with Low Level Waste Repository Limited (LLWR).

The total revenue from the disposal and treatment of low level radioactive waste, excluding landfill tax and intra-group trading, increased by 5% to £1.9m (2014: £1.8m). Operating profit increased by 9% to £1.1m (2014: £1.0m) and EBITDA increased 13% to £1.2m (2014: £1.1m). This was generated from a total volume of 3,186 tonnes, a decrease of 26% compared to 4,323 tonnes in 2014.

The revenue generated by RWS has historically been dominated by waste related to nuclear decommissioning, with revenues steadily increasing as activity on the Government-owned sites increased. In the final quarter of 2015, LLWR issued a revised projection, which indicated a 43% reduction in waste volumes for disposal to the market during the Government fiscal year 2015-16 (April 2015 to March 2016). This significant reduction was due to two main issues, being the latest status of individual decommissioning projects, including delays caused by changes in management companies for various NDA-controlled sites as previously communicated, and the outcome of the UK Government Spending Review. In line with those predictions, Augean has seen significantly lower volumes of waste from the NDA estate since May 2015 and this is now expected to continue during the first quarter of the Group's 2016 financial year.

Throughout 2015, RWS has strategically sought to reduce its dependence upon the disposal of waste from LLWR, with actions taken including increasing the average price per tonne for waste into Augean facilities, diversification of its customer base, with 49% of revenue in 2015 generated from customers other than LLWR, compared to 31% in 2014; and widening the range of treatment options, with the first radioactive wastes received for thermal processing in late 2015.

LLWR predicts that volumes for the 2016-17 Government fiscal year (April 2016 to March 2017) will be 42% higher than the current 2015-16 forecasts, and should, therefore, lead to an increase in volumes in the second half of 2016 and early 2017, compared to late 2015 and early 2016.

Based on the forecast activity of the RWS business, taking into account the timing of the increase in volumes between late 2016 and early 2017, as well as the reduced activity seen in the first quarter of 2016 to date, it is now considered that this business unit will trade significantly below management expectations for the year ended 31 December 2016.

Focus remains on the medium-term growth strategy for this business, whilst continuing discussions with key stakeholders within Government organisations, in an effort to obtain greater predictability and consistency in waste volumes for the Group, which operates a number of essential assets for the delivery of the Government's strategy for dealing with radioactive waste.

Industry & Infrastructure (I&I)

The principal activity of this business unit is the recovery and recycling of oil and solvents and the generation of secondary liquid and solid fuels from waste, as well as the provision of specialist industrial cleaning and other waste management services to a range of markets, including chemical processing & manufacturing, port & shipping operations, water treatment & supply and onshore demolition & clean up. This includes the treatment of drill cuttings from the North Sea oil & gas market, which are supplied through the Augean North Sea Services business, with oil and gas operators the end customer of the Group. The business primarily operates from sites in Avonmouth and Paisley, as well as operating the Port Clarence Waste Recovery Park (PCWRP) on Teesside and providing industrial services on client sites.

I&I total revenue, excluding inter-segment sales, fell by 6% to £11.7m in 2015 (2014: £12.5m) and the business unit made an operating loss of £0.7m, compared to a £0.6m operating loss in 2014, although the performance of the business unit improved in the second half of the year with an operating loss of £0.2m, compared to a first half operating loss of £0.5m. The business generated a positive EBITDA of £0.4m, compared to a positive EBITDA of £0.5m in 2014, with the second half of 2015 generating a positive EBITDA of £0.5m compared to a negative EBITDA of £0.1m in the first half.

The disappointing overall outcome for the I&I business unit is primarily due to performance issues at the Avonmouth site, with the other areas of the business performing in line with management expectations for 2015. As noted in the interim results, measures have been taken at Avonmouth to improve the performance of the site. This has included the appointment of management to oversee improvements at the site, in order to execute an agreed plan to return the site to profitability during 2016. Avonmouth trading in 2016 to date is in line with management plans.

The PCWRP site includes certain thermal treatment and recovery assets that have been substantially used for the treatment of drill cuttings from the North Sea in recent years. As explained below, the diversification strategy of Augean North Sea Services means that there is now an expectation of reduced activity by those assets on Teesside. Accordingly, the recoverable value of the relevant assets was determined to be lower than their carrying value and, as previously announced, an impairment loss of £2.9m has been recognised as an exceptional item in the consolidated income statement of the Group in 2015.

Industrial Services has been a service line of increasing importance to the I&I business, with a number of term contracts secured with customers, providing opportunities to leverage the Group's specialist waste knowledge with support services, in line with Company strategy. With an increasing scope of opportunity, the optimum means of resourcing the growth of this part of the business has been under active consideration during 2015, resulting in additional targeted sales resource, restructuring parts of the business to position it for growth in this specific area and modest capital investment in the business to increase scope and capability. Focus has been on broadening the range of services and increasing market penetration through new and existing customers using downstream I&I and other Augean-wide assets to support and provide end-to-end supply chain security. Several term contracts have been secured in the Infrastructure sector.

A total of £0.6m of capital investment was undertaken in the I&I business, of which c. £0.4m represented maintenance capital expenditure and £0.2m related to development capital expenditure.

Augean Integrated Services (AIS)

This business unit operates from a site in Cannock and a high temperature incinerator (HTI) in Sandwich, East Kent. It offers a total waste management (TWM) service, through a team of highly knowledgeable experts, who work with customers on a consultative basis to address their waste management and compliance needs, as well as leveraging the specialist HTI asset in East Kent, which is designed to incinerate high-value, low volume goods, such as pharmaceutical or other specialist waste. The Group purchased the East Kent HTI in 2014, for a total of £1.9m. The purchase price included a deferred element of £0.4m, of which £0.2m was paid in 2015 and the remaining £0.2m was paid in early 2016.

Total revenue, excluding inter-segment sales, grew by 44% to £6.0m (2014: £4.2m). This included £3.9m from total waste management (2014: £2.5m), of which £2.3m was from contracted business (2014: £1.6m). The business reduced its operating loss by 22% to £0.6m (2014: £0.7m), and cut its negative EBITDA by 56% to negative £0.2m (2014: negative £0.4m).

The below-expectation profitability of this business unit was primarily due to the performance at the East Kent HTI which realised an operating loss of £0.3m (2014: loss of £0.5m). The disappointing performance of the HTI resulted from unplanned operational downtime, particularly in the first half of the financial year, which led to higher operating costs and a temporary reduction in processing capacity. Equipment replacement was carried out, during planned shutdowns in August 2015 and December 2015. This, along with an improved schedule of planned, preventative maintenance and the appointment of a new, experienced general manager at the plant in February 2016, will enable the HTI to deal with the increased commercial pipeline arising from new contract wins. The Board remains confident in the long-term strategic value of this asset to the Group.

As previously noted, the AIS business has built a commercial team with sector-specific expertise, which has enabled the wider AIS business to secure further TWM contracts with high-value customers in 2015, the full year impact of which is expected to occur in 2016 and beyond. A number of TWM contracts have been extended to run until 2019 and all contracts won in 2015 were at least three years in length, with potential for further in-life revenue growth. The AIS business excluding East Kent made an operating loss of £0.3m (2014: £0.2m) as it continues to invest for growth.

Other than payments to purchase the HTI, a total of £0.8m of capital expenditure was undertaken in the AIS business in 2015, most of which related to the East Kent site, to address the plant reliability issues referred to above.

Augean North Sea Services (ANSS)

The ANSS business unit operates in the North Sea oil & gas market, primarily from four sites in Aberdeen, a site at Lerwick, in the Shetland Islands and, since February 2016, from a site in Great Yarmouth. The primary revenue streams are from drilling waste management, which includes drill cuttings management and the rental of offshore engineers and equipment to customers, with a diversification strategy underway, leading to growth in production waste management, onshore & marine industrial services and water treatment. Throughout 2014 and early 2015, the Augean Group owned 81% of the shares in ANSS. As previously announced, the Group purchased the remaining 19% of shares in March 2015 such that ANSS became a wholly-owned subsidiary of the Group from that date.

ANSS revenue grew by 2% to £14.8m (2014: £14.5m) and saw an increase in operating profit of 32% to £1.3m (2014: £1.0m) and an increase in EBITDA of 34% to £2.0m (2014: £1.5m). The operating profit margin increased from 7% to 9% due to adverse weather conditions in 2014 which adversely impacted the margin at that time.

During 2015, ANSS outperformed expectations, despite increasingly challenging conditions in the North Sea Oil & Gas market which have been evident since the latter part of 2014. Key to this successful performance has been the continued strategic traction of the business in moving up the supply chain and dealing directly with oil & gas operators and tier-1 customers in this market, which increases the potential for the business to widen its service scope directly with those customers. 89% of total ANSS revenues were directly generated from those customers during 2015, compared to 75% in 2014. During 2015, the business maintained incumbency on an average of 4.6 rigs, compared to 4.3 in 2014.

During 2015 and the early part of 2016, ANSS has achieved the following noteworthy contract wins:

· As previously announced, in June and July 2015 ANSS was successful in winning three new contracts, with terms of between three and five years, all of which are with operators and tier-1 customers. Those contracts include production platform waste management, onshore waste management and decommissioning work, the latter of which includes NORM wastes and is delivered in conjunction with the Radioactive Waste Services business;

· As previously announced, in January 2016 ANSS entered into a contract to provide production waste management and onshore industrial services to a major oil & gas operator. This represents both further progress on the strategy of diversification and also a significant entry-point for the Group to the market which exists in the southern part of the North Sea. The contract, which is directly with the operator, is for a period of three years, with the customer having the option for further annual extensions, up to a maximum period of seven years. Linked to this contract, in February 2016, the Group purchased certain freehold land and assets in Great Yarmouth for £0.5m, plus associated taxes and fees. The site, which has been purchased from a waste management company, and already holds relevant planning and environmental permits, will enable the Group to supplement those services already provided to customers in the Northern and Central North Sea, which will continue to be mainly delivered from Aberdeen.

· In February 2016, ANSS entered into a new contract to provide onshore waste management and industrial cleaning services to a major oil & gas operator, in the North West of England. The contract is for a period of three years, with the option of further annual extensions, up to a maximum period of five years.

All of the above contract wins are strategically important in diversifying the ANSS business away from dependence on exploration drilling and further underpin existing management expectations for 2016 revenues and profits from this business. Going forward, it is expected that an increasing proportion of revenues will be generated from onshore and offshore waste-related industrial services work, rather than exploration drilling waste management.

Despite these strategic successes during 2015 and the early part of 2016, the Board remains mindful of the prevailing conditions in the North Sea oil & gas market. As previously stated, management continues to monitor events closely and ensure that costs are tightly controlled to match industry demands for cost efficiencies, whilst sufficient investment is made to allow the business to pursue its growth strategy and take advantage of the opportunities that continue to emerge, even in the current challenging environment. Capital expenditure totalled £1.6m during 2015 (2014: £1.6m).

ANSS is a support service business, with 2015 operating expenses comprising 68% of variable costs, 5% depreciation and 27% other fixed costs.

The low proportion of fixed operating expenses gives the business the agility to effectively adjust its cost base should a reduction in current activity levels occur or commercial opportunities not come to fruition. The cost base of this business is monitored closely by management, alongside the continuous improvement in safety and service delivery performance that has continued to earn the business increasing recognition from operators and tier-1 customers in the sector, which has been key to the successful award of the contracts referred to above.

The Board remains confident that the ANSS business has the capability and credibility in its core market to maintain high levels of operational efficiency in the short term and to position the business for continued profitable growth in the medium and long term but the Board continues to monitor events in the North Sea oil & gas market, given their potential impact on the ANSS business.

Long Term Contracts

The Group aims to increase the proportion of its customer base which is served through a formalised agreement, consisting of either a contract or framework agreement. In 2015, the top-20 customers of the Group made up 47% of total Group revenue (2014: 50%), of which 95% was through a formalised agreement (2014: 80%).

Transactions

On 10 March 2015, the Group purchased the 19% of shares in Augean North Sea Services Limited not already held by the Group, thereby making the company a wholly-owned subsidiary of the Group at that date. The consideration paid for the shares was £1,050,000, excluding applicable stamp duty and fees, which was paid in cash on the same date.

On 2 July 2015, the Group purchased the entire issued share capital of ASB Environmental Limited (ASB) for a total consideration of £40,000, which was paid in cash on the same date, along with an acquired overdraft of £51,000. The acquisition of ASB does not have a material impact on the results of the Group.

Legislative environment

Regulation underpins the demand for Augean's services and accordingly the business follows closely the development of legislation and guidance and engages proactively with policy makers and regulators. Of particular interest to the business in 2015 have been changes to the landfill tax regime, the revised classification of waste, WM3, and developments on the derogations for landfill acceptance criteria. The Finance Act 2015 introduced requirements for determining the landfill tax rate of screened wastes. From 1 June 2015, Augean smoothly implemented the transition to using the Global Harmonised System for classification of chemicals and the Environment Agency guidance WM3, which requires a change in the way we classify waste. DEFRA has recently circulated a discussion paper regarding the removal of derogations from the landfill acceptance criteria. A decision will be made later this year but the removal is considered unlikely until late 2017.

DEFRA is consulting on its review of its 2010 Hazardous Waste Strategy for England. Augean was directly involved in its formulation and has monitored its implementation since 2010. In general, Augean considers that, whilst the Strategy is fit for purpose, there are concerns now apparent regarding the implementation and application of the Strategy, particularly in respect of persistent and toxic pollutants, which need addressing urgently. The application of the strategy does not appear to substantially consider whether the Best Overall Environmental Outcome (BOEO) will be achieved, despite it being a requirement of the Strategy. Clear policy guidance is being sought from DEFRA to help direct investment in the sector.

On 16 December 2015, HM Revenue & Customs issued a revised excise notice in respect of landfill tax, updating the landfill tax treatment of various waste streams. This update potentially impacts the market served by the Energy & Construction business unit, as explained above.

Planning and permitting

The securing of planning permission and maintenance of appropriate environmental permits at the Group's sites is an essential part of the on-going operation and future development of the business. During 2015, we gained planning permissions and subsequently made permit applications for the extension of the landfill sites at Thornhaugh and Port Clarence. The application for Thornhaugh enables Augean to re-engineer part of the landfill site and remove historic liabilities while creating new void and prolonging the life of the site to 2034. At Port Clarence, the previous consent was due to terminate in 2016 and has now been extended for the remaining life of the site so we have secured planning permission for the landfill site for a future period estimated to exceed 50 years. In May 2014, the business acquired the East Kent HTI, with additional contiguous land known as Bloody Point. We immediately sought, and obtained from Kent County Council, planning permission to develop the asset for waste use. In parallel, we varied the Environmental Permits for the incinerator so that our hazardous and radioactive waste storage activities can be extended to Bloody Point.

In July 2013, the Secretary of State for Communities and Local Government granted a Development Consent Order (DCO) for the extension of the landfill site at ENRMF. This site provides treatment and disposal services for a range of remediated soils and building rubble, APCR and low activity radioactive wastes and is the principal hazardous waste landfill site in the South of England. To fully exploit the DCO it is necessary to vary the permits for LLW and hazardous wastes. Extensive technical work was undertaken including environmental impact and risk assessments to ensure that the on-going development would not cause harm to human health or pollution of the environment. Permits for the treatment and disposal of hazardous waste were granted in 2015 while the radioactive waste permit is expected to be issued during the first half of 2016. The business has continued to actively engage with local communities resulting in general acceptance of its proposals and no objections.

Corporate Social Responsibility (CSR) performance

The Board recognises the important role played by the Group in the environment and communities within which it operates. The health & safety of our employees and compliance with regulations are two of the top three business priorities (financial performance being the third). Augean is committed to conducting its business operations in an open and responsible manner and we recognise the need to continually improve our operations where practical to do so, in order to reduce our impact on the environment, to continuously improve assets and processes to ensure the safety and welfare of our employees and to act as a good neighbour, minimising the impact of our operations on the wider community.

The Group has a commitment to mitigating any adverse effects of its operations and this is explained further in the detailed CSR report, which will be published alongside the Annual Report & Accounts.

The environment

All operating sites and activities are strictly regulated by environmental authorities through a range of regulations set out in the permits for each site. In the context of hazardous waste, the principal instruments driving standards are the Waste Framework Directive and the Industrial Emissions Directive, which provide an integrated approach to pollution control to prevent emissions into air, land or water. The standards expect the techniques and procedures adopted by the Group to represent the Best Available Technique (BAT). BAT requires a review of each activity and the implementation of the highest standards to minimise emissions, be energy efficient, reduce waste and consumption of raw materials, manage noise, vibration and heat loss and ensure accident prevention is in place.

The Group continues to deliver the objectives of BAT through its operations and works closely with the regulators to ensure that Augean is a leader in compliance in the sector. Activities are delivered subject to well-developed environmental controls and compliance systems (as defined in the Integrated Management System), involving suitably competent people in the management of all aspects of its operations. Environmental reports are prepared and monitored within the Group and supplemented by information from regulators. This includes the Environment Agency's own review of companies operating in the waste sector which are subject to their account management regime, of which Augean is one. The information available for 2015 indicates that the Group's operations do not result in a significant impact on the local environment and in general our environmental performance has improved significantly over the past five years. Scores received from the Environment Agency (EA) in England and the Scottish Environmental Protection Agency (SEPA) in Scotland and demonstrate sustained high standards and low environmental impact.

As part of our commitment to implement the elements of the waste hierarchy relevant to the hazardous sector, the Group continues to take a strong role in the development of regulation and policy for hazardous waste. By engaging with Government departments, local authorities and regulators, we promote the industry and modernisation of the sector, seeking to establish a positive regulatory and policy framework for the business. In previous years, representatives from the Group took a high profile role in the development of the National Policy Statement for hazardous waste (NPS), directly engaging with Government departments and giving evidence at the Parliamentary Select Committee inquiry. In 2015, we engaged actively and extensively in policy development in a wide range of areas affecting the business including Landfill Tax, landfill acceptance criteria, the development of strategic BAT for metallic low level wastes and the review of low level waste strategy.

Employees

The Group's employees are vital to its success and during the year made a significant contribution to the performance improvements outlined in this report. However, no general pay increase was awarded to staff or directors in 2016, in view of general inflationary conditions approximating to zero in the UK.

The Group is committed to the principle of equal opportunity in employment and to creating a harmonious working environment which is free from harassment and bullying and in which every employee is treated with respect and dignity. Accordingly, well established policies are in place to ensure that recruitment, selection, training, development and promotion procedures result in no job applicant or employee receiving less favourable treatment on the grounds of race, colour, nationality, ethnic or national origin, religion or belief, disability, trade union membership or non-membership, sex, sexual orientation, marital status, age or status as a part-time or fixed-term employee. The Group's objective is to ensure that individuals are selected, promoted and otherwise treated solely on the basis of their relevant aptitudes, skills and abilities.

These equal opportunity policies are set out in the Group's Employee Handbook, a copy of which is provided to each employee on joining the Group and made available electronically. The Handbook is updated periodically for changes in policy and regulations. The Group also operates a clear whistle-blowing policy, providing every employee the opportunity to raise concerns directly with a nominated director, without the intervention of line management. Once an issue is reported the nominated director is required to undertake a thorough investigation and make recommendations.

In order to provide a formal, recorded, regular review of an individual's performance, and a plan for future development, all staff undertake an annual or bi-annual Performance Appraisal with their line manager. Appraisals assist in the development of individuals and establish individual training needs, improve organisational performance, and feed into business planning. Where appropriate the appraisal process establishes specific training plans for each individual.

Training and development activity during the year built on the progress made during 2014 and investment was made to ensure that all employees had the knowledge, qualifications and skills to operate safely and compliantly within their specific role and in the broader waste management sector. A competency framework developed for each role is used in the induction of new employees and also as the basis of a rolling training programme.

Safety

To support commitment to health and safety improvements, reporting of near miss incidents continued to be a key part of the health and safety programme during the year, supplemented with safe act reporting designed to applaud and encourage safe working practice. Over 2,000 near misses and 540 safe acts were reported during 2015 (achieving the target of one report per operational employee per month) and at the same time we maintained a low level of accidents causing injury to a person or damage to property.

The community

Augean recognises the important role that it has within local communities and aims to maintain an open dialogue with its neighbours about its activities and plans. This is achieved through regular liaison committees, newsletters and open days. The establishment of new businesses, changes in the waste streams managed and active planning processes during the year led to a high level of interaction with local communities in some areas. As in previous years the Group maintained a programme of consultation in these localities to ensure that its plans were well known and understood. This included attending liaison meetings and hosting public exhibitions, in addition to the more formal submissions to planning authorities.

The Group continued to contribute to the communities around its landfill sites through the Landfill Tax Credit Scheme and the Low Level Waste Fund. A total of £0.4m (2014: £0.4m) was contributed through these schemes during the year, providing funds for community projects including a sports centre and a wildlife reserve. Charitable donations made during the year included on-going support for the Underground Youth Club at Kings Cliffe, the Stockton Sea Cadets, local sports teams and local events.

Financial performance

Group overview

A summary of the Group's financial performance, from continuing operations and excluding exceptional items, is as follows:

Exceptional items are detailed below.

On a statutory basis for continuing operations, operating profit was £3.3m (2014: £6.7m), profit before tax was £2.5m (2014: £5.9m), profit after tax was £1.7m (2014: £4.8m), basic earnings per share were 1.60 pence (2014: 4.64 pence) and net operating cash flows were £10.5m (2014: £8.4m).

Trading, operating profit and EBITDA

Net revenue from continuing operations for the year ended 31 December 2015 increased by 11% to £61.0m (2014: £55.0m).

Operating profit before exceptional items from continuing operations increased by 11% to £6.8m (2014: £6.1m) and profit before tax increased by 12% to £6.0m (2014: £5.4m), on the same basis.

Earnings before interest, taxation, depreciation and amortisation (EBITDA), from continuing operations and before exceptional items, is determined as follows:

Exceptional items

Exceptional items in 2015 totalled a net charge of £3.5m before taxation, of which £2.9m related to the non-cash impairment of certain property, plant and equipment, as explained below, £0.5m related to restructuring charges and £0.1m related to business acquisition and other costs.

In 2014, exceptional items from continuing operations totalled a net credit of £0.5m and comprised an amount from the settlement of litigation, with the previous owners of an acquired subsidiary of the Group, of £1.6m less associated professional fees of £0.7m, restructuring costs of £0.2m and other costs totalling £0.2m.

Finance costs

Total finance charges were £0.8m (2014: £0.8m) and include the payment of interest on bank debt and other financial liabilities, totalling. They also included non-cash unwinding of discounts on provisions totalling £0.1m (2014: £0.1m).

Taxation

The Group recognised an accounting tax charge of £0.8m (2014: £1.1m) for its continuing operations and a tax credit of £nil (2014: £0.6m) in respect of discontinued operations. This includes a credit of £0.4m (2014: £nil) in respect of exceptional items.

The accounting tax charge of £1.2m for continuing operations and excluding exceptional items (2014: £1.1m) represents 20.3% of profit before taxation on the same basis (2014: 20.4%). This compares against the headline rate of corporation tax of 20.25% for 2015 (2014: 21.5%).

The Group paid corporate tax of £1.1m during the year (2014: £0.8m), of which £0.4m was in respect of 2015 liabilities and £0.7m in respect of previous years. A current tax liability of £0.9m (2014: £0.6m) remains in the balance sheet at the year end.

A deferred tax asset of £2.3m (2014: £1.7m) is recognised in the balance sheet, which reflects the probability that the Board believes that the assets will be recovered in the short to medium term. A deferred tax asset of £0.8m is unrecognised (2014: £0.9m) as the expected usage is not sufficiently predictable. This asset is expected to eventually be recovered in the ordinary course of business and will, therefore, be re-recognised when its recovery is probable.

Earnings per share

Basic earnings per share (EPS), from continuing operations and excluding exceptional items, increased by 13% to 4.65 pence (2014: 4.13 pence).

Statutory basic EPS, from continuing and discontinued operations was 1.60 pence (2014: 4.92 pence).

The Group made a profit after taxation, from continuing operations and excluding exceptional items, of £4.8m (2014: £4.3m), of which £4.8m (2014: £4.1m) was attributable to equity shareholders.

The total number of ordinary shares in issue increased during the year from 101,991,380 to 102,249,083 with the weighted average number of shares in issue increasing from 100,053,156 to 102,139,647 for the purposes of basic EPS.

Dividend

The Board has recommended a dividend of 0.65p per share (2014: 0.50p), payable on or after 10 June 2016, following an ex-dividend date of 2 June 2016 and a record date of 3 June 2016, subject to shareholder approval at the Annual General Meeting. The dividend per share has increased by 30% from the previous year, which continues to reflect increased confidence over future prospects and maintains the Board's commitment to pay a progressive dividend to shareholders. The proposed dividend is covered 7.2 times (2014: 8.3 times) from the continuing operations of the group, before exceptional items.

Cash flow and net debt

The cash flow of the Group is summarised as follows:

Post-maintenance free cash flow, as set out in the table above, represents the underlying cash generation of the Group, before any investment in future growth or the payment of dividends to shareholders.

The post-maintenance free cash flow of the Group, from continuing operations and excluding exceptional items, increased by 12% to £5.6m (2014: £5.0m), after excluding net operating cash flows from exceptional items and discontinued operations, of £0.6m outflow (2014: £0.4m inflow).

Underlying net operating underlying cash flows were generated from continuing trading as follows:

Underlying net operating cash flow as a percentage of EBITDA was 92% in 2015 (2014: 77%).

The Group announced in March 2015 that it had purchased the remaining 19% of shares in Augean North Sea Services, not already held by the Group, for a total consideration of £1.05m.

The Group purchased the assets and site at the East Kent Waste Recovery Facility during the 2014 for a total consideration of £1.9m, with £1.5m paid in 2014 and £0.2m paid in each of January 2015 and January 2016.

During 2014, the Group sold certain residual assets from the closure of the Waste Network business, for net proceeds of £1.2m.

Capital investment in property, plant and equipment and intangible assets made by the Group totalled £7.3m (2014: £5.4m), excluding the payments to acquire East Kent, and is shown in the table below. This is split between maintenance investment, focused on upgrading existing facilities and development investment on new activities, with planning investment to secure permissions to operate split between maintenance and development, dependent upon the specific nature of that capital expenditure:

During the year, the Group received a total of £0.1m (2014: £0.8m) of equity proceeds from the exercise of share options by current and former employees.

As a result of the above net cash generation, net debt, defined as total borrowings less cash and cash equivalents, fell to £4.3m at 31 December 2015, from £5.7m at 31 December 2014. This represented gearing, defined as net debt divided by net assets, of 7.8% (2014: 10.6%). The ratio of net debt to EBITDA, from continuing operations and before exceptional items, was 0.4 times (2014: 0.6 times).

Financing

The activities of the Group are substantially funded by a bank facility, comprising a revolving credit facility and bank overdraft. That facility was renewed on improved commercial terms on 21 March 2016 with HSBC Bank plc at a level of £20m with the option of a further £10m exclusively to fund acquisitions. The maturity of the facility is October 2020 and the overdraft is reviewed annually. This facility, along with the underlying cash generation of the Group, is expected to provide the required funds to support further growth of the business over that period.

During 2015, the activities of the Group were substantially funded by a bank facility, comprising an amortising term loan, revolving credit faci6lity and bank overdraft. That facility had amortised, in the ordinary course of business, to £13.25m by 31 December 2015 from an initial level of £15m. As at 31 December 2015, the undrawn funds available to the Group totalled £5.5m, plus cash of £3.6m.

Both of the above facilities include the following two financial covenants, which are tested on a quarterly basis:

Ratio of net debt to EBITDA: not more than 2.5 times

Ratio of operating profit to cash interest costs (interest cover): not less than 3.0 times

As at 31 December 2015, the Group was in compliance with both covenants, with significant headroom.

Balance sheet and return on capital employed

Consolidated net assets were £54.4m on 31 December 2015 (2014: £53.8m) and net tangible assets, excluding goodwill and other intangible assets, were £34.4m (2014: £33.9m), of which £nil (2014: £1.0m) was not attributable to equity shareholders of the Group. Net assets and net tangible assets as at 31 December 2015 are both stated after the recognition of a £2.9m impairment loss, as explained further below.

Return on capital employed, from continuing operations and excluding exceptional items, defined as operating profit divided by average capital employed, where capital employed is net assets excluding net debt, increased to 11.4% in 2015 (2014: 10.7%). This outcome is not impacted by the £2.9m impairment loss recognised by the Group, which is recognised as at 31 December 2015 but does not form part of the calculation of average capital employed for 2015.

Impairment reviews

In accordance with IAS36 'Impairment of Assets', an annual impairment review was carried out for each cash-generating unit (CGU) to which significant goodwill is allocated and also any other CGU where management believed there may have been an indication of potential impairment to the carrying values of assets in those CGUs.

For the continuing operations of the Group, this exercise was completed for the Energy & Construction and Industry & Infrastructure CGUs, which both contain significant levels of goodwill, as well as the Augean Integrated Services High Temperature Incinerator, as a result of performance levels, the Augean North Sea Services business, as a result of the declining macroeconomic conditions seen in the North Sea Oil & Gas market in late 2014 and during 2015, and the Indirect Thermal Desorption (ITD) unit at Port Clarence Waste Recovery Park, due to the high proportion of revenues that it generates from the thermal treatment of North Sea drilling muds and the consequent material impact on its expected future activity as a result of on-going challenges in the North Sea Oil & Gas market. Those detailed reviews indicated that an impairment loss of £2.9m was to be recognised in respect of the ITD CGU as at 31 December 2015 and that no change was required to the carrying value of the goodwill, nor were any other impairment losses to be recognised in the consolidated balance sheet, in respect of the continuing operations of the Group, at 31 December 2015.

Events since the end of the financial year

On 21 March 2016, the Group completed the refinancing of its bank loan facilities. Subsequent to this, the Group has a facility in place to provide a total level of funding of £20m with the option of a further £10m exclusively to fund acquisitions, maturing in October 2020.

Board appointment

Rod Holdsworth will join the Board on 23 March 2016 as a non-executive director.

Outlook

Trading in the early part 2016 has started positively for the Group with the exception of Radioactive Waste Services, where the reduced volumes sent from the Nuclear Decommissioning Authority for disposal, seen in the second half of 2015, has continued into early 2016. Accordingly, the Group as a whole is trading in line with market expectations.

The Group remains focussed on the execution of its strategy to deliver shareholder value and further direct contracts with tier-1 producers have been secured improving forward visibility of earnings. The portfolio effect of maintaining five businesses in diverse markets and the continued focus of the Group on increased returns on its investments means that the Board remains confident of maintaining its track record of year on year increases in profitability in 2016.

By order of the Board

Dr Stewart Davies

Chief Executive

21 March 2016

Key Performance Indicators

The Augean plc Board of Directors, Group Management Board and local management teams regularly review the performance of the Group as a whole along with the performance of individual business units. This includes the use of a balanced scorecard for applicable key performance indicators (KPIs) to monitor progress towards delivery of the Group's principal targets.

The focus of the Group is in three priority areas.

1. Health & safety: monitored through near miss incidents and the number of accidents incurred;

2. Compliance with regulations, in particular Environment Agency and Scottish Environment Protection Agency audit results; and

3. Financial performance.

Certain KPIs are set out in the table below for continuing operations, each relating to these priorities and showing the equivalent result for the previous year. An explanation as to why these KPIs are important to the Group is also included and where appropriate, KPIs are linked to the core areas of the Group's strategy, using the key shown underneath the following table:

Strategic key

SMP Develop sustainable market positions

CFS Grow through client-focused solutions

GSV Grow shareholder value

(1) The number of total reported accidents, including those resulting in damage to plant or equipment. This is an absolute figure which

has not been normalised for changes in employee numbers. The RWS business uses the assets of other businesses in the Group

and, therefore, separate site results are not applicable for RWS.

(2) The total number of incidents reported which could have resulted in an accident or injury or damage to property. The RWS business

uses the assets of other businesses in the Group and, therefore, separate site results are not applicable for RWS. Result excludes

corporate near misses reported.

(3) The average of audit scores notified during the year by the Environment Agency (EA) in England or the Scottish Environment Protection

Agency (SEPA) in Scotland. The EA notifies results on the scale A-F and SEPA notifies on the scale Excellent-Very Poor

(4) Group profit before taxation, from continuing operations and excluding exceptional items

(5) Net operating cash flows, from continuing operations and excluding exceptional items, less maintenance capital expenditure

(6) Calculated as operating profit, from continuing operations and excluding exceptional items, divided by average capital employed,

where capital employed is the consolidated net assets of the Group excluding net debt

(7) Total revenue from top 20 customers, arising from commercial arrangements under contract or other framework agreement, divided

by the total revenue of those customers in the year.

Managing risk

The performance of the business is linked to economic activity in the waste markets it serves, including the manufacturing, construction, nuclear decommissioning, Energy-from-waste and oil & gas sectors. Fluctuations in the UK economy in general and these sectors in particular affect Group performance, as do inflationary and other cost pressures. Risks are mitigated by diversifying the customer base as far as possible and by linking gate fees and other customer charges, wherever possible, to prevailing operating costs and commodity prices, including the costs of waste disposal outside of the Group. In addition to this general economic risk, there are a number of risks specific to the markets served by the Group which may have a material impact on activities and results.

The Group uses a range of resources to manage and mitigate its risks, including the adoption of a broad range of internal controls, the use of risk registers and regular reporting, monitoring and feedback of risks through the business.

Environmental legislation

Regulation is a key driver of the hazardous waste market. Changes in legislation (including tax legislation with environmental goals) or its interpretation can have a significant and far reaching impact on waste markets. The Group endeavours to mitigate this risk by employing high quality technical management to interpret the evolving legislative framework and its potential and current impact on the Group's operations. In addition, the Group maintains a presence on a number of industry groups to influence the shaping of policy and liaises regularly with relevant regulators and legislative bodies, including the Environment Agency, the Scottish Environment Protection Agency (SEPA), the Department for Environment, Food & Rural Affairs (DEFRA) and the Department of Energy & Climate Change (DECC).

The simplistic application of the waste hierarchy to the markets in which the Group operates, with its focus on reducing the volume of waste disposed to landfill, could be perceived as a threat to the business in the long term. The Group is mitigating this threat by developing treatment solutions for customers which utilise landfill when this is the most appropriate commercial and environmental solution, but provide alternative approaches whenever they are suitable. In addition, the importance of Best Overall Environmental Outcome (BOEO) in moderating the simplistic application of the waste hierarchy is being highlighted to policymakers.

Environmental compliance

All operating sites and activities are regulated by environmental authorities in line with the requirements set out within licences and permits. These licences and permits are required to carry on the business of the Group and compliance with their terms is essential to its success. Withdrawal or temporary suspension could have a significant impact on the Group's ability to operate. Adherence to the highest environmental standards is also important to ensure the maintenance of good relations with local communities and to satisfy customers that the techniques, practices and procedures adopted by the Group are consistent with those of a responsible business. The Group mitigates this risk through the employment of technical experts, by working to well-established policies and procedures described in its Integrated Management System, through the provision of training to develop the knowledge and competence of its staff and through regular monitoring and review of compliance performance. Further details of how the Group monitors and controls environmental compliance are set out in the Group's corporate social responsibility (CSR) report.

Health and safety

The activities of the Group involve a range of health and safety risks, from offshore operations to the handling of hazardous wastes. Health and safety is the first priority for all directors, managers and employees across the Group and investments in relevant assets and resources are made on an on-going basis to ensure that the highest health and safety standards are applied. Health and safety performance is constantly monitored and reviewed, including formal reviews at each Augean plc Board meeting and in depth quarterly reviews by the Group's Management Board. These mechanisms also include detailed reviews of any relevant incidents, which allow the lessons learnt from such incidents to be fed back to local teams, in order to reduce the likelihood of recurrence.

Price risk

Price pressure remains a key feature of the hazardous waste market, where customers often have a range of options for the ultimate disposal of their wastes and access to several companies competing to service their needs. The Group reviews its pricing policies on an on-going basis to ensure that it influences and stabilises the market, whilst responding to emerging trends and customer needs. As part of the Group's established sales infrastructure, specialist roles exist to assess and price waste consignments in line with market rates and available disposal solutions. All services are kept under review to ensure that price changes in the market do not lead to uneconomic activities being undertaken by the Group.

Economic growth

The Group relies on economic activity in the UK, which in turn leads to production of the hazardous wastes which form the basis of its sales revenues. Any downturn in the UK economy may restrict the volume of hazardous wastes produced and therefore constrain the Group's revenues. Such macro-economic risks are mitigated, in part, by following a strategy of developing positions in a range of markets requiring specialist waste management capabilities and which have high barriers to entry. The Group also continues to identify and invest in the techniques, assets and resources to provide a broad range of services to customers, diversifying the revenue base of the Group.

Technological factors

Technological risk factors may cause treatment technology in use to become obsolete or too costly to maintain. The Group monitors the development and application of the waste hierarchy, invests selectively in development, and employs strategic planning to make timely investments in existing and new equipment. Full evaluation of operational costs and market environment is made before investment.

North Sea oil and gas investment

With a well-established business focused on providing waste management services to North Sea oil and gas operators, the Group has some exposure to any fall in investment for oil and gas exploration activity in the North Sea, such as those announced by certain major oil companies in early 2015. This may in turn reduce the volume of waste available for management by Augean North Sea Services (ANSS). To mitigate this risk, the ANSS business maintains a comparatively low level of operational gearing, with the business therefore able to adjust its significant direct cost base in the event of a significant and permanent reduction in revenues. Our North Sea activities are also diversified across a number of revenue-generating streams, with services provided to production customers offshore and onshore. The future growth of North Sea decommissioning volumes may provide new market opportunities for ANSS that would be a further mitigation.

Transport disruption

The Group relies on the delivery of wastes to its sites to secure revenues and any disruption to local or national networks, for example in severe weather conditions, can cause delays or lost revenue for the Group. Mitigation is provided as far as possible by the outsourcing of the majority of their haulage requirement, augmented with the use of the Group's own fleet where appropriate. The Group have the ability to accept wastes into sites in different geographical locations before onward transfer to their final treatment or disposal destinations.

Tax legislation

The use of tax legislation to drive environmental objectives, particularly the diversion of wastes away from landfill disposal and towards greater treatment and recycling, represents a long term risk. The standard rate of landfill tax rose to £82.60 per tonne on 1 April 2015 and will continue to rise in line with the retail price index. Whilst European and national legislation encourages "zero landfill" solutions for a range of waste streams, disposal in properly engineered and permitted landfills continues to be the most appropriate waste management solution for many hazardous wastes. To mitigate the risk that the Group will suffer a decline of landfill volumes as environmental taxes rise the Group has developed a range of waste treatment solutions for customers and also broadened its capabilities to ensure its landfill sites are able to accept all those wastes which do require landfill disposal.

Consolidated statement of comprehensive income

for the year ended 31 December 2015

Group Statement of financial position

As at 31 December 2015

Consolidated statement of cash flow

For the year ended 31 December 2015

Statement of changes in shareholders' equity

for the year ended 31 December 2015

During the year, the Group acquired the remaining 19% of the share capital of Augean North Sea Services Limited. As at 31 December 2015, the Group has no non-controlling interest.

The Special profit reserve was created in June 2012 upon a Court order which ordered the cancellation of the share premium account at that time and the creation of the Special Profit reserve, to which part of the Share Premium account was transferred. The Special Profit reserve was determined to be non-distributable until all liabilities of the Company that existed as at the date of the court order had been extinguished. The board determined that this condition was met and the reserve was deemed distributable at 31 December 2014. Accordingly, the balance on this reserve was transferred to Retainedearnings.

1 Basis of preparation

The financial information set out in this announcement does not constitute statutory accounts within the meaning of s495(2) or s495(3) of the Companies Act 2006. Statutory accounts for the year ended 31 December 2015 will be dispatched to shareholders by 25 April 2016 for approval at the Annual General Meeting to be held on 2 June 2016. The statutory accounts contain an unqualified audit report, which did not include a statement under s498(2) or s498(3) of the Companies Act 2006, and will be delivered to the Registrar of Companies.

The statutory accounts for the year ended 31 December 2014, which have been delivered to the Registrar of Companies, contained an unqualified audit report and did not include a statement under s498(2) or s498(3) of the Companies Act 2006.

2 Operating segments

The Group has five reportable segments which are the Group's strategic business units. In 2014, a sixth business segment was shown as discontinued. These business units are monitored and strategic decisions are made on the basis of each business unit's operating performance. The Group's business units provide different services to their customers and are managed separately as they are subject to different risks and returns. The Group's internal organisation and management structure and its system of internal financial reporting are based primarily on these operating business units. For each of the business units, the Group's Chief Executive Officer (CEO) (the chief operating decision-maker) reviews internal management reports on at least a monthly basis. The following summary describes the operations of each of the Group's reportable segments:

· Energy and Construction: Augean operates three modern hazardous and non-hazardous landfill operating sites based at East Northants Resource Management Facility (ENRMF), Thornhaugh in Northamptonshire and Port Clarence on Teesside, providing waste remediation, treatment and disposal services to its customers. The business unit includes a site at Cooks Hole in Northamptonshire where minerals are extracted and also generates energy as electricity from closed landfill cells.

· Radioactive Waste Services: Augean provides waste disposal services of low level radioactive wastes and naturally occurring radioactive material produced in the UK.

· Augean Integrated Services (AIS): Augean operates a High Temperature Incinerator at Sandwich, East Kent and a site in Cannock focused on Total Waste Management solutions.

· Augean North Sea Services: An 81% owned subsidiary company which became a 100% owned subsidiary during the current year; this business unit provides waste management and waste processing services to offshore oil and gas operators in the North Sea.

· Industry and Infrastructure: Augean operates three waste processing sites across the UK, with activities focused on the management of oil-contaminated waste. The business unit also provides specialist industrial cleaning services.

Information regarding the results of each reportable segment is included below. Performance is measured based on the segment operating profit, as included in the internal management reports that are reviewed by the Group's CEO. This profit measure for each business unit is used to measure performance as management believes that such information is the most relevant in evaluating the results of each of the business units relative to other entities that operate within these sectors.

All activities arise solely within the United Kingdom. Inter-segment trading is undertaken on normal commercial terms.

3 Exceptional items

The following pre-tax items have been charged/(credited) to operating profit:

4 Taxation

Tax reconciliation

The main rate of corporation tax in the UK was 21% from 1 January 2015 and fell to 20% on 1 April 2015, such that the weighted average headline rate for 2015 was 20.25%.

5 Dividends

At the forthcoming Annual General Meeting, the Board will recommend to shareholders that a resolution is passed to approve payment of a dividend for the year ended 31 December 2015. This has not been included as a liability in these financial statements.

6 Earnings per share

The calculation of basic earnings per share (EPS) is based on the profit attributable to ordinary shareholders of £1,635,000 (2014: £4,921,000) and a weighted average number of ordinary shares outstanding of 102,139,647 (2014: 100,053,156), calculated as follows:

The exceptional items have been adjusted, in the adjusted earnings per share, to better reflect the underlying performance of the business, when presenting the basic and diluted earnings per share.

7 Reconciliation of operating profit to net cash generated from operating activities

The above EBITDA includes a total net cash outflow of £620,000 relating to exceptional items and discontinued operations (2014: inflow of £201,000).

The above net cash generated from operating activities includes a net cash outflow of £620,000 relating to exceptional items and discontinued operations (2014: inflow of £416,000).

8 Analysis of changes in net debt

The table below presents the net debt of the Group at the balance sheet date.

9 Event after the balance sheet date

On 21 March 2016, the Group completed the refinancing of its bank loan facilities. Subsequent to this, the Group has a facility in place to provide a total level of funding of £20m, maturing in October 2020.

10 Contingent liabilities

In accordance with Pollution, Prevention and Control (PPC) permitting, the Group has to make such financial provision as is deemed adequate by the Environment Agency to discharge its obligations under the relevant site permits for its landfill sites. Consequently guarantees have been provided, by certain subsidiaries of the company, in favour of the Environment Agency in respect of the Group's landfill sites. Total guarantees outstanding at the year-end were £8.2m (2014: £8.4m).

The Group is involved in a commercial dispute with a customer, which has arisen in the normal course of business and relates, in part, to events which took place in 2015. The customer has indicated that it intends to bring a legal claim against the Group in relation to this matter, although no such claim has yet been received. It is possible that an obligation may eventually arise in respect of this matter. However, given that no legal claim has been received, it is not possible to reliably estimate the likelihood or value of any future cash outflows in respect of this issue.

11 Annual Report & Accounts

The Annual Report will be sent to shareholders on or around 25 April 2016 and will be available on the Company's website www.augeanplc.com from that date. The Annual General Meeting will be held at 10am on 2 June 2016 at FTI Consulting, 200 Aldersgate, London EC1A 4HD.