Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of MRW, please enable cookies in your browser

We'll assume we have your consent to use cookies, so you won't need to log in each time you visit our site.
Learn more

Shanks looks to cut as profits slump

Shanks Group CEO Peter Dilnot is considering closing facilities and cutting jobs after reporting a sharp fall in profits.

The firm said its solid waste operations had been hit by the economic downturn and declining business waste arisings, as predicted last month. The UK firm, which also operates in Netherlands, Belgium and Canada, said trading profit for the six months to September fell 15% to £21.7m from £28.1m .

Peter Dilnot

CEO Peter Dilnot, told MRW the results were in line with the firm’s revised expectations following a shock profit warning in October.

He acknowledged that Shanks’ solid waste businesses in the Benelux and UK, handling mostly commercial and construction waste and contributing around 30% of the Group’s profits, were “very challenged”. But he said the firm’s organics, UK municipal, and hazardous were performing “very well and in-line with expectations”.

Dilnot said he was taking “decisive action to restructure the business” taking “tough and difficult decisions”. The firm, he said, was looking at mothballing and closing some of its UK solid waste facilities and cutting jobs.

While the continuing pressure on gate fees and recyclate prices had levelled off, the business solid waste market would not recover in the short term, he added.

He said the fact the company had maintained the interim share dividend showed the board’s confidence for the future, and predicted uplift in the second half from cost reductions already made.

Shanks invested over £300m in infrastructure over the past four years, throughout the recession, Dilnot added, and would continue to do so in the future, continuing to generate incremental profit and tackling problems with the firm’s “legacy business”.

Key figures from the report:

 20122011Change % - constant currency
Revenue£339.6m£397.7m-8%
EBITDA£43.6m£53.7m-11%
Trading profit£21.7m£28.1m-15%
Underlying free cash flow£10.2m£18.3m-34%
Underlying profit before tax£14.3m£20.2m-22%
Profit before tax (statutory basis)£7.0m£17.3m-54%
Underlying EPS2.7p3.8p-21%
Basic EPS (statutory basis)1.6p4.3p-56%
Dividend per share1.1p1.1p-

See MRW’s Big Interview with Peter Dilnot.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.