26th Aug 2008 12:42
Augean PLC
Strategic review, market update and preliminary offer approaches
In October 2006 the Board of Augean announced a strategic review of the group's assets with the intention of setting a clear direction for the group's future. The review concluded that the hazardous waste sector provides significant opportunity for growth, both organically and by acquisition.
Subsequently Augean has developed its treatment division by bringing new locations and services to the market and then by developing those assets further in new markets. Augean's treatment division is performing well and is continuing to provide much potential for the future.
However, in our review we also concluded that the hazardous waste landfill business was going to take longer than anticipated to reach its full potential. This slower development has been driven by inconsistency in both regulatory approach and enforcement and also lack of clarity of key regulations. Whilst this has been frustrating for all concerned, we have maintained our belief in the long term strategic value of Augean's unique landfill assets as an important part of the solution for effective waste disposal in the UK.
The long term strategic development work which has been underway to secure new permissions to operate innovative and proven technologies is now being fulfilled as we move from the development phase to the construction and operation of our new facilities delivering services to new markets. This is evident in the current construction of key phases of the Waste Recovery Park at Port Clarence which we expect to become a centre of excellence within the industry. The completion of these key phases of works by the end of 2009 will provide new income and profit streams and signals the group's growth into new and profitable markets.
One example of this is the recent signing of an exclusive licence agreement with MECO Environmental, a US based technology provider and patent holder of a number of specialist thermal treatment technologies. The licence agreement provides Augean exclusive rights to the technologies in the UK and the purchase of 3 units has already been concluded. The plants will be installed at Avonmouth and the Recovery Park at Port Clarence by early 2009. The thermal treatment technologies utilise infra-red and propriety fuels to thermally recover organics from solid wastes and will provide a treatment and recovery solution which will bridge the gap between high temperature incineration and the export of waste from the UK.
All of the above actions have taken a great deal of time and effort on the part of our team and the Board is pleased to report that Augean is now, for the first time, starting to witness a considerable, sustained, upturn in activity at our landfill sites and a strong performance in our treatment operations. In addition, Augean has reached agreement with certain large customers which are expected to deliver strong second half volumes to the landfill division. At the same time, the treatment division is continuing to perform in line with expectations. As a result of the certainty of these revenue streams the Board is confident that current year market expectations will be achieved and, dependent on the outcome of further contracts currently under negotiation, could be exceeded.
In addition, the Board of Augean considers it appropriate to inform shareholders that it has received a number of preliminary approaches which may or may not lead to an offer for the company at a significant premium to the current share price. It is emphasised that all such discussions are at an early stage. A further announcement updating shareholders will be made when appropriate.
Augean's interim results for the six months ended 30th June 2008 are scheduled to be announced on Tuesday 23rd September 2008.
Augean currently has 65,488,892 ordinary 10p shares in issue (ISIN - GB00B02H2F76).
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Enquiries: Augean PLC |
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David Williams, Chairman |
020 7004 2700 |
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Paul Blackler, Chief Executive |
01937 844980 |
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Peter Southby, Finance Director |
01937 844980 |
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Landsbanki Securities (UK) Limited |
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James Wellesley Wesley |
020 7426 9000 |
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Rashmi Sinha |
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Financial Dynamics |
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Jonathon Brill |
020 7831 3113 |
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Billy Clegg |
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if any person is, or becomes, 'interested' (directly or indirectly) in 1 per cent. or more of any class of 'relevant securities' of Augean, all 'dealings' in any 'relevant securities' of that company (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by no later than 3.30pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which any offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the 'offer period' otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an 'interest' in 'relevant securities' of Augean, they will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant securities' of Augean by the offeror or Augean, or by any of their respective 'associates', must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk
'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Takeover Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a 'dealing' under Rule 8, you should consult the Panel.
Related Shares:
AUG.L