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Waste firm 'addressing issues' after profit warning shock

Infrastructure and outsourcing firm May Gurney has said it is addressing problems raised in last month’s profit warning as it announced an extension to its Somerset waste contract.

May Gurney

In a first-half trading performance update the firm, which provides waste management services to around 20 local authorities, said trading was in line with expectations.

In September the firm’s shares fell 46% to £120.25 after it said it would “significantly under-perform its original expectations” for the year, and that chief executive Philip Fellowes-Prynne would leave “with immediate effect”.

The company, which also provides outsources rail, road, and maintenance work, blamed the profit warning on problems with its loss-making kerbside sort collection contracts in Bristol and Chester.

The firm said today it had won a seven year extension to its contract with the Somerset Waste Partnership for recycling and waste collection services - valued at up to £100m.

The firm said in the first five months of the year it had won a total of £126m of new work and £150m of contract extensions. Its order book stands at £1.5bn.

As of 30 September, the group had gross cash of £20m and borrowings of £23m, with total borrowing facilities of £48m, comprising a £15m overdraft facility and a revolving facility of £33m. The group had obligations under contract-backed finance leases of £74m.   

Willie MacDiarmid, May Gurney

Willie MacDiarmid, interim chief executive, said: “Plans are in place to address the issues we highlighted in September and we are taking steps to reinforce the good work already started to give a clear focus on commercial disciplines.

“With robust operational improvements and efficiencies being driven forward, May Gurney is focused on delivering a solid future performance.”

The firm’s interim results for the six months to 30 September 2012 will be announced on 4 December 2012.

Readers' comments (1)

  • I suspect that this Construction Company seriously overstated their potential savings on these very highly labour and vehicle intensive contracts, so no surprise here

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