Shanks Group has reported a 4% increase in revenue and cut losses after tax by 20% in its latest set of full year results. The company said that the disposal of its loss-making commercial and industrial solid waste business in the UK was one of the major drivers of growth.
For the full year ending 31 March, the company saw revenue rise from £614.6m in 2013 to £636.4m while losses after tax fell from £35.2m to £28.2m. Underlying profit before tax was up 14%, which the group said was due to it exiting the UK solid waste market.
Shanks sold its commercial and industrial solid waste disposal business to Biffa in October last year for £9.5m as part of a group-wide plan to cut loss-making operations. The sale of the solid waste business, which was completed by the end of 2013, has already seen total overhead costs reduced by an annualised £2m.
Shanks has concentrated on its UK municipal operations, which saw a “good year” in which all targets were met. Revenue for the division was up 19% to £137.5m from £115m but there was an expected decrease in trading profit to £9.2m from £9.6m.
Highlights in the sector included final planning permission being granted for a new gasification facility in Derby and progress in the new builds at Barnsley Doncaster and Rotherham (BDR) and Wakefield. Looking forward, Shanks said its operational contracts were expected to continue to perform “robustly” while future growth is predicted come from new assets to be commissioned by 2017.
The Solid Waste Benelux division, the group’s largest by revenue, saw trading profit grow 16% to £19.7m - the first time in five years that the division has posted profit growth. This was attributed to cost reduction plans announced in 2012 and Shanks predictes the arm will “deliver a broadly similar performance” over the coming year.
Chief executive Peter Dilnot (pictured) said that improving the profitability of Solid Waste Benelux was one of the “core pillars” of Shanks Group’s consistent growth strategy and that the company is “focused on returning this business to previous profitability levels”.
“Longer term, the growth drivers in our business remain attractive,” he said. “There is a clear and growing need for cost-effective and sustainable waste management which Shanks is uniquely placed to meet.”