Financial Summary
Strong performance in line with expectations
Underlying profit before tax up 3% at constant currency to £18.3m on flat revenue
Underlying EPS up 3% at constant currency to 3.4p per share
Robust balance sheet with core net debt at £182.2m and net debt:EBITDA ratio of 2.1x
Return on operating assets up by 60 basis points to 14.8% due to capital discipline and portfolio management
Loss from discontinued operations in first half of £27.2m, £23.1m non cash
Interim dividend maintained at 1.1p per share, reflecting confidence in medium term
Business Overview
Successful cost programme in Solid Waste Benelux delivers increased profit despite continued challenging markets
Hazardous Waste performed ahead of expectations, particularly in soil and water treatment
Organics Netherlands delivers growth, new assets being commissioned
UK Municipal growth in line with forecast, with good progress on construction of new facilities for BDR and Wakefield PFI projects
Significant investment in Hazardous Waste where we can generate attractive returns
Active portfolio management including the exit from UK Solid Waste will deliver £4m uplift in annualised profit before tax and £22m cash inflows for reinvestment in growth businesses, principally from exit of UK Solid Waste
Well positioned for future growth, with portfolio of strong businesses in attractive key markets
Commenting on the results, Peter Dilnot, Group Chief Executive of Shanks Group plc, said:
"In markets that remain challenging, Shanks delivered strong results for the first half, with underlying profit before tax and EPS up 3%. Hazardous Waste and UK Municipal performed particularly well and we have continued to invest in both of these growth businesses. Our self-help actions in Solid Waste Benelux are well on track, resulting in increased profits on lower revenues. Organics continued to perform steadily.
"Following the period end, we announced our exit from UK Solid Waste and the sale of the majority of those operations to Biffa. This exit and other portfolio actions will deliver a pro forma uplift of £4 million in annualised trading profit and £22m cash inflow for reinvestment in our growth divisions.
"Shanks is well positioned for the future with a portfolio of market leading businesses with clear opportunities for growth. The Board remains confident that the Group will deliver a trading result in line with its expectations for the full year and is pleased to maintain the Interim dividend."
