Shanks says challenging markets continue

Waste management group Shanks said it has continued to trade robustly in end markets which remain very challenging.

Waste management group Shanks said it has continued to trade robustly in end markets which remain very challenging.

The group, which sorts and reprocesses waste generated in industry, particularly construction, said notwithstanding the ongoing tough market conditions, it expects results for the year ending March 31st 2013 to be broadly in line with its current expectations.

"Although the Board remains confident in the medium term prospects of the group, it is now expected that the further deterioration in core markets experienced over recent months will impact the rate of growth in the next financial year," it said in a company statement.

Across its divisions, Shanks said Benelux Solid Waste continues to experience very tough end markets, with falling waste volumes resulting in severe price pressure across the industry and low recyclate prices also adding pressure to margins. Shanks is highly exposed to the Benelux region.

UK Solid Waste also continued to experience tough end markets, especially in Scotland where, despite active cost reduction measures, increasing offtake costs will continue to put increased pressure on profitability, it explained.

The Hazardous Waste division continued to trade in line with expectations, with its Reym industrial cleaning business performing strongly.

Elsewhere its Organics Division performed steadily. It has secured a three year extension to its flagship contract with Albert Heijn in the Netherlands, for the conversion of food waste into electricity.

Chief Executive Peter Dilnot commented: "The group has continued to trade robustly in end markets which remain very challenging, particularly in Solid Waste where we are making good progress with our cost reduction programme."

"Despite the very challenging market conditions, which will impact the rate of growth in the next financial year, we remain confident in the group's medium term prospects."

CJ

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