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Viridor reports strong ERF performance

Viridor ERF

Viridor’s parent company has reported strong performance from the waste firm, with its energy recovery facilities (ERFs) on track to meet targets.

Pennon’s latest trading update, ahead of its half-year results to be announced in November, says its eight ERFs are on track to deliver the target of around £100m of EBITDA in 2016-17.

The expectations are driven by additional ERF earnings as its Peterborough plant ramps up and as availability increases at Trident Park in Cardiff and Runcorn II in Greater Manchester.

The company says it expects to see better performance in the second half of the year in ERF results.

Another three facilities are under construction, including the Glasgow Recycling and Renewable Energy Centre, for which Viridor has received contractual compensation from its building contractor for delays against original expectations.

Construction at its Dunbar and Beddington (South London) facilities are progressing as planned and to budget, according to the statement.

The board will also decide this year on whether to invest in an additional ERF at Avonmouth, near Bristol.

Chris Loughlin, Pennon chief executive, said: “Pennon has made a good start to 2016-17, delivering a strong performance across both water and waste.

“The portfolio of energy recovery facilities is performing in line with expectations, and remains on track to contribute the targeted circa £100m of EBITDA this year.

“Our shared services review, which will result in cost savings, supports our strategy of working more closely as a group. With this clear strategy and our strong balance sheet, Pennon is well placed to continue to deliver for customers, communities and shareholders.”

It has closed two landfill sites this year with plans to close more of the remaining 13 until 2020.

No mention is made of Viridor chief executive Ian McAulay’s surprise departure this month.

Pennon says its cost reduction plans are progressing well, including the reorganisation, restructuring and streamlining of overheads at Viridor.

Specialist waste firm Augean also released its half-year update, with a £8.9m net debt increase due to its recent acquisition of Colt Holdings.

Chief executive Dr Stewart Davies said: “The group has performed well in the first half of 2016, with particularly strong performances from its energy, construction, industry and infrastructure businesses.

“The group is well placed to continue to take advantage of growth opportunities and to deliver profit growth for 2016, in particular due to additional air pollution control residue volumes secured in the first half and the integration of the Colt Holdings acquisition.

”Accordingly, the board remains confident of delivering full-year financial results in line with market expectations.”

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