Shanks Group has revealed a rise of 11% in revenue and a growth of 20% in underlying profit before tax in its results for the six months to 30 September 2011.
Revenue went up from £348m in 2010 to £398m in 2011. Underlying profit before tax rose to £20.8m from £16.8m in 2010.
On areas of opportunity in the UK, Shanks UK managing director Ian Goodfellow told MRW: “In the near term we have clear opportunity in PFI and organics. Then, in the medium term, as regulatory and tax pressure comes to the fore, the C&I market will soon catch up.”
He added that energy was also on its agenda: “As we develop the business, we will be looking much closer at the gas and electricity market which we are becoming more and more closely aligned to.”
Acting group chief executive Chris Surch said: “These are good results which demonstrate our ability to deliver continued growth of revenues and profits against a challenging macro-economic background. They reflect the success of our strategic focus on recycling and reprocessing, which has helped us to increase our overall recycling rate to 80% of all waste handled.
“Overall we achieved strong growth in the UK and Canada…while our strategic investment programme in recycling and organics continues to deliver its targeted returns. At the same time, we have increased margins on existing municipal contracts and strengthened our pipeline of potential future contracts.”
The results statement revealed that “overall, market pressures have been more than offset by increasing recyclate prices, a continued focus on cost saving and returns from our investment programme and municipal strategy”.
It added that the company’s “clear strategy of delivering sustainable alternatives to landfill and mass-burn incineration means we are well positioned to capitalise on market conditions as and when they improve”.
For UK operations, the company reported that profitability of its existing PFI portfolio had continued to improve, with the PFI market remaining “active” and its bid pipeline “strong”. It is currently preferred bidder on three contracts and remains one of the final two bidders for seven other bids, which represent 1.1 million tonnes of waste a year.
But the company added that “reduced volumes and pricing pressures have resulted in a lower performance at our Landfill and Power joint venture” and there had been increased central overhead costs. Its UK business anticipates that improvements from recent investments in recycling and organics facilities and strong performance from its municipal business will “compensate for any further decline in overall volumes”.
As reported earlier by MRW, Shanks has just announced the appointment of new chief executive Peter Dilnot.