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Mixed returns for specialist Augean

Hazardous waste management company Augean has reported higher revenue and profits during the first half of 2015 but weaker performance in two waste management divisions.

The group’s report said there was a strong overall performance in the first six months, and the full-year performance is anticipated to be in line with management expectations.

Revenue increased by 27% to £31.3m and profit before tax increased by 29% to £3.1m. Net debt fell to £3m from £5.7m in December 2014.

Augean’s Industry & Infrastructure unit, which recovers and recycles oil and solvents among specialist industrial cleaning and other waste management services, was adversely affected by fluctuations in the oil price at its Avonmouth site. The company says measures are being taken to optimise the site’s performance.

“In view of the time for this to take effect, and the separate and significant impact of reduced drilling activity in the North Sea on the processing of drill cuttings at the Port Clarence Waste Recovery Park on Teesside, it is anticipated that the 2015 second-half trading performance will be below management expectations,” the report says.

Augean Integrated Services, which operates from a site in Cannock and a high-temperature incinerator in Sandwich, Kent, made a loss of £400,000. The report says that operational issues at the latter mean the business unit will fall short of management expectations for 2015.

But it adds: “The number of contract wins, and the increased quality of revenue associated with them, combined with the reliability improvements expected from the further key equipment replacement in the second half of 2015, give the board increased confidence regarding the performance of the business exiting the current financial year and beyond.”

There was a brighter note for the Augean North Sea Services unit, which became a wholly owned subsidiary in March 2015, as it reported revenue growth of 39% and an increase in operating profit of 246%.

“This performance was despite the worsening market conditions in the oil and gas sector seen since late 2014, and significantly exceeded management expectations,” the report said.

Chief executive Dr Stewart Davies said he was pleased with delivering double-digit growth in group revenue and pre-tax profit.

“We have seen the benefit of the group’s portfolio approach of maintaining five businesses in diverse markets, enabling us to optimise the performance in certain areas while continuing to deliver strong growth at a group level.

“The board remains confident in the group delivering its expectations for 2015 while continuing to deliver sustainable market positions and grow shareholder value.”

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