Shanks Group said it was “confident”, despite “remaining cautious” for the economic year ahead, according to its interim management statement for the trading period to 31 January.
Predicting full-year underlying profit before tax to be strong and around “market consensus”, the waste management firm’s group chief executive Tom Drury is positive.
He said: “Despite remaining cautious about the macro-economic outlook for the financial year 2011/12, we are confident in our ability to continue to offset any adverse financial impact through a continuation of the management actions we have taken so far. The earnings from the investment programme have demonstrated that the business has the ability to grow, and this growth potential will be enhanced as market conditions improve.”
The UK showed a 0.5% shrink in GDP in the last quarter.
Shanks reported strong underlying cash flow, with year-end debt anticipated to be lower than market expectations. It added that severe weather conditions in December affected all its European-based businesses but that any impact on trading profit would be offset by lower financing costs. However, the report said underlying market conditions have remained difficult, with pricing conditions in Benelux described as “challenging”.
In addition, UK plans are on track, with the recent grant of planning permission for the Bicester anaerobic digestion facility.