UK drives profit growth at Shanks

The old adage that where's there's muck, there's brass held true at Shanks Group, as the waste management firm delivered profits ahead of expectations.

Underlying pre-tax profit in the year to March 31st increased by 10% (8% using constant exchange rates) from £35.2m to £38.8m, ahead of expectations of £37.65m, on revenues which rose by 5% from £717.3m to £750.1m. Excluding the positive effect of currency translation of £9m, revenue was 3% up on the prior year.

Earnings before interest, tax, depreciation and amortisation was up 4% (3% on a constant exchange rate basis) from £98.6m to £102.4m.

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Peter Dilnot, Group Chief Executive of Shanks, said: "Earnings growth has been driven by increasing returns from our strategic investment programme and focused management action to streamline operations. The strong performance from our UK, Organics and Hazardous Waste businesses has also offset difficult trading conditions in Benelux Solid Waste."

The Netherlands remains the group's major revenue earning, with revenue up 5% to £380m from £362m the year before, while trading profit in this region rose 3% to £38.2m from £37.2m the year before.

Belgium's revenue was flat at £172m while trading profit edged up to £11.0m from £10.8m while in the UK revenue rose £6m to £186m, while trading profit shot up 39% to £6.9m from £5.0m the year before.

"Our markets look set to remain challenging in the year ahead. To offset these macro headwinds we are taking action to deliver cost reductions and group synergies. We will also continue to generate further returns from our ongoing investment programme and through a renewed focus on operational performance," stated Dilnot.

Basic earnings per share rose 20%, from 5.5p to 6.7p, slightly below expectations of 7.37p. The firm increased its dividend payment for the year by 6% from 3.25p to 3.45p, ahead of forecasts of 3.43p.

Net debt at the end of the financial year stood at £206.2m, barely changed from £207.4m the year before.

The share price rose 3.68% to 85.85p by 10:16.

NR