Significant signs of economic recovery in the waste management sector are not visible although overall conditions are more stable, according to the Shanks Group.
In its six-monthly review ending 30 September - Shanks has said that signs of an upturn are still to come.
Shanks Group chief executive Tom Drury said: The decline in revenue and earnings experienced in Q1 slowed in Q2 and we expect this improving trend to continue reflecting the full benefit of the cost reduction programme, returns from strategic investments and some continued improvement in recyclable material prices. While activity has stabilised, we do not anticipate any rapid pick up in underlying volumes. We expect overall performance for the year to be in line with our expectations.
In comparison to last years six-monthly financial results, Shanks Groups revenue dropped three per cent from £346M in 2008 to £335M this year. Profit after tax also dropped by 27 per cent. However, net debt also dropped largely due to the proceeds from a rights issue and the sale of the Avondale landfill site. Drury explained that the performance was in-line with expectations.
The sale of the Avondale site significantly impacted UK results, however continuing plans going forward are to develop an integrated recycling and organics business incorporating a bigger PFI portfolio. Already, Shanks has invested in Scottish anaerobic digestion technology and is constructing a recycling facility in Scotland with further recycling and organic facilities planned in England and Wales.