Financial Summary
Performance in line with trading statement issued on 26 September 2014
Revenue down 1% at constant currency to £304.8m
EBITDA down 11% at constant currency to £38.5m
Underlying profit before tax down 35% at constant currency to £11.2m
Underlying EPS down 33% at constant currency to 2.1p per share
Exceptional and non-trading items of £19.8m, £11.1m being non-cash impairment of historic goodwill in relation to Netherlands Solid Waste
Balance sheet remains robust, with core net debt of £150m and Net Debt:EBITDA ratio of 2.1x
Interim dividend maintained at 1.1p per share, reflecting confidence in medium term
Business Overview
Increasingly challenging markets in Solid Waste Benelux have outweighed positive impact from continuing delivery of business improvement initiatives
Dutch solid waste market fundamentals are showing some signs of improvement although the timing of the benefit is uncertain
Robust underlying performance from Hazardous Waste, albeit impacted in first half by commissioning of new equipment and associated temporary shutdown
Good progress with Hazardous Waste investment programme to increase capacity and range of treatment capability
Organics performing well and in line with our expectations, with encouraging progress in Canadian bid funnel
Strong performance from UK Municipal with increased profits, good progress with major build programmes and financial close achieved to build and operate £145m facility for 27-year Derby PPP contract
Group is well positioned for future profitable growth with portfolio of market leading businesses in all key target segments
Continued focus on managing our business portfolio to increase returns and accelerate growth through acquisitions and disposals
Outlook
The increasingly challenging market conditions in Solid Waste Benelux and non-recurring operational disruptions in Hazardous Waste have significantly impacted our first half performance. With increased capacity in Hazardous Waste and improvement actions expected to stabilise profitability in Solid Waste, the Board is confident that the Group will meet its revised expectations for the full year ending 31 March 2015.
Longer term, Shanks' growth drivers remain attractive. There is a growing need for cost-effective and sustainable waste-to-product technologies which Shanks is uniquely placed to meet. We have a clear strategy to deliver profitable growth and attractive returns in each division. This is based on continued investment in new infrastructure that will generate increased high-quality earnings in our growth divisions, together with building competitive strength and capability in Solid Waste, so that we are well positioned to benefit as markets recover.
