Pre-close trading update

26th January 2011

Augean plc

("Augean" or "the Group")

Pre-close trading update

Augean, one of the UK's leading hazardous waste businesses today updates the market prior to going into its close period ahead of the publication of its 2010 full year results on 29th March 2011.

The Board is pleased to announce that despite the impact of the challenging weather conditions in December 2010 profit before tax and exceptional costs for the year is likely to be slightly ahead of expectations.

The Board also anticipates a further reduction in net debt following continued positive cash generation across the Group.

Strategic opportunities

We have continued to develop our key strategic opportunities during the second half of the year with a focus on enhancing the Group's return on capital employed.

Low Level Waste

The planning appeal on the Low Level Waste ("LLW") application was conducted during October and the planning inspector will submit his report to the Secretary of State for Communities and Rural Affairs in February 2011, after which we anticipate a decision will be issued by 24th May 2011.

The Board is pleased to report that approval has been granted by the European Commission in accordance with Article 37 of the Euratom Treaty confirming that the disposal of LLW at our East Northants Resource Management Facility does not pose any risk to member states of the European Union. This is an important milestone and we now look forward to the release of the final permit from the Environment Agency.

Indirect Thermal Desorption

We have completed the upgrade to the Indirect Thermal Desorption plant at our Port Clarence Waste Recovery Park, increasing throughput capacity to 28,000 tonnes per annum. The plant is now operational and throughput will increase throughout the first quarter, treating and recovering waste streams from the offshore and refinery markets.

Minerals

We have continued to develop our capabilities to extract minerals from our site at Cooks Hole near Peterborough and expect approval during the summer of 2011. We have also installed the plant to generate electricity from landfill gas at Port Clarence with royalty income expected during the year.

Divisional update

In the Landfill division the land remediation market has shown signs of recovery, demonstrated by an 18% year on year uplift in landfill volumes to 303,261 tonnes (2009: 257,938 tonnes), although competitive pressure continues on prices and margins.

The Treatment division has delivered improvements in profitability over 2009 with the majority of sites making positive profit contributions.

We are currently dealing with the impact of a safety incident at our Cannock site which has temporarily shut down the local process operation. The Health & Safety Executive are conducting an ongoing investigation into the causes and we are also undertaking our own internal review. The Group has insurance in place for incidents of this nature and we are working with our insurers to progress a claim and the reinstatement the plant. The Board remains committed to the highest standards of health & safety and environmental compliance.

Tax

In December 2010 HM Revenue & Customs announced its intention to replace the existing 'Landfill Tax (Qualify Material) Order 1996' by 1st April 2011, which has the potential to change treatment of lower rate landfill tax. The Board routinely monitors all landfill tax liabilities and the Group continues to carry provisions on its balance sheet following recent Landfill Tax rebates. We are in discussions with our auditors over the most appropriate provisions to carry forward into 2011.

Outlook

The Board remains cautiously optimistic over the outlook for the year ahead. Trading has started positively in the early weeks, particularly in the Landfill division where we anticipate capital cell engineering at all three of our sites during the year. With forecasts of modest growth in industrial outputs, North Sea exploration and land remediation projects we expect that the Group's broad service offering to our customers and strong asset base, coupled with the delivery of our strategic opportunities, will lead to improvements in profitability during 2011. The Group will give a further update when it announces its results in March 2011.

Ends

For further information, call: