Shanks has started the year “steadily”, despite challenging market conditions, and is continuing its restructuring programme, the company has announced in its report for the first quarter.
The group traded in line with expectations across its four divisions – solid waste, hazardous waste, organics and UK municipal waste – putting the company on track to meet year targets, according to Shanks’ chief executive Peter Dilnot.
“We have continued to deliver our cost reduction programme and to manage actively the group’s portfolio to focus on area where we have a strategic advantage,” he added.
In its annual results for 2012/13, Shanks reported a 29% decrease in underlying pretax profits and a 9% decline in revenue. The annual results showed weak performances in the solid waste businesses in the Benelux and the UK, where the combined profits fell by more than 50%.
The company started restructuring the business division last year. The cost cutting plan involves reducing treatment capacity, streamlining the organisation by removing overhead and operational headers, and implementing shared service centres.
Dilnot said Shanks is continuing its restructuring effort post-Q1, but market conditions, especially in the solid waste area, remain challenging.
Shanks’ net debt rose to £207m in Q1, in line with expectations given an injection of £11m additional funding in its Private Financial Initiative contract with Cumbria council in April and the ongoing funding of the cost reduction programme.
In the report, Shanks highlighted some of its achievements to date, including: starting the works for a site in South Kirby, West Yorkshire, part of a PFI contract with Wakefield council; commencing operations at an anaerobic digestion plant at Westcott Park; and being selected as a one the two final bidders for an organic waste management contract with Cardiff and Vale of Glamorgan councils.