Waste management firm Shanks said trading for the interim period to 31 January 2012 is in line with company expectations despite, as expected, challenging conditions.
"The softening macro-economic environment and the fall in paper recyclate prices have impacted the Solid Waste business in all territories. Pricing pressure in the Netherlands has continued and overall volumes have softened. In addition, the Euro has weakened to 1.21 against the pound in recent months," Shanks explained in a company statement.
Despite these pressures, it now expects to deliver savings of around £10m for the full year as it continues to drive down costs.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The strategic programme and the continued strong performance of the Dutch Hazardous Waste business mean that we continue on track to achieve our expectations, it said.
Shanks said its investment programme remains on track and the first £100m phase is expected to achieve its targeted post tax returns on the completed and fully operational projects of 12% to 15% this year. The group said it is making good progress with the second £150m phase of the programme.
Its existing PFI contracts have continued to perform well and trading margin has remained at 9%.
Meanwhile progress continues on closing the Barnsley, Doncaster, Rotherham and Wakefield contracts and while it is disappointed not to proceed to preferred bidder on several recent bids, the UK municipal pipeline remains strong, it explained.
Chairman Adrian Auer commented, "We are pleased to have delivered an overall trading performance in line with our expectations, despite market conditions remaining challenging. Our ongoing focus on cost savings and implementation of our strategy of delivering sustainable alternatives to landfill and mass burn incineration continue to produce significant benefits."
"We remain on track to deliver our expectations for the full year."
