Specialist waste manager Augean has reported increased revenue and profit before tax on the back of strong performance of its North Sea, energy and construction activities.
Augean’s preliminary results for 2015 show revenue up by 11% to £61m (2014: £55m). Profit before tax increased by 12% to £6m (2014: £5.4m).
On the down side, there has been concern about the performance of the company’s principal organic waste treatment centre at Avonmouth which has hit the industry and infrastructure division.
The company’s strategic report, released along with the results, says “a key strategic objective” in the energy-from-waste (EfW) sector will be to grow the volume of business in air pollution control residues (APCR).
Stewart Davies Augean
Dr Stewart Davies, chief executive officer, said: ”2015 had been a year of significant progress with double-digit growth in revenue, operating cash flow and ebitda.
“The results were driven by a strong performance across a number of the group’s businesses in which we have built sustainable market positions. The portfolio effect of maintaining five businesses in diverse markets and the continued focus of the group on further increasing returns on its investments means that the board remains confident of maintaining its track record of year-on-year increases in profitability in 2016,” he said.
The top performing unit was Augean North Sea Services and the company’s strategic report says it exceeded expectations, “despite increasingly challenging conditions in the North Sea oil and gas market which have been evident since the latter part of 2014”.
It put this success down to deals made directly with oil and gas operators and ”tier-1 customers”, noting several contract wins including those serviced by a new site in Great Yarmouth.
But disappointing returns from the industry and infrastructure business unit are said to be due to poor performance of the company’s organic waste operation at Avonmouth.
“Measures have been taken at Avonmouth to improve the performance of the site. This has included the appointment of management to oversee improvements in order to execute an agreed plan to return the site to profitability during 2016. Avonmouth trading in 2016 to date is in line with management plans,” the report says.
The principal activity of the energy & construction unit is the disposal of APCRs, incinerator bottom ash, asbestos and other contaminated waste materials and soils, mainly from the EfW, biomass energy and construction sectors.
The total volume of waste disposed by the business increased by 31% to 434,000 tonnes in 2015, from 332,000 tonnes in 2014, with APCR volumes decreasing by 11% from 85,000 tonnes to 75,000 tonnes and other waste streams increasing by 45% from 247,000 tonnes to 359,000 tonnes.
The company’s strategic report says APCR volumes in the second half of 2015 were similar to those seen in the first half.
“An increase in the volume of APCR treated by the group remains a key strategic objective in the short and medium term, with the business well-positioned to utilise its additional investment in treatment capacity.”
Davies told MRW that the growth expected in the EfW sector until 2020 meant there would be “increased momentum” in the company’s APCR activity, aided by regulatory changes which would produce more material from each facility.
The report noted that Augean had benefitted from “high levels of activity” in the preparation of construction sites in 2015. However, Davies said the year was an “outlier” that had surprised the industry and he expected 2016 to be more typical.