Last checked at 23 Jul 2009 07:00
Annual General Meeting and Interim Management Statement - 23 July 2009
Shanks Group plc, Europe's largest listed independent sustainable waste management business, will hold its Annual General Meeting today. A statement will be made regarding its current trading and financial position, as required by the UK Listing Authority's Disclosure and Transparency Rules.
Summary for three months ended 30 June 2009:
Trading Performance
Overall, against a backdrop of challenging economic conditions, Group trading results for the first quarter are in line with our expectations.
NetherlandsActivity levels in the Dutch Solid waste business, whilst depressed, are in line with our expectations. The construction and demolition market remains difficult and this is expected to continue for the remainder of the financial year. In Hazardous Waste, the water treatment business has performed well and generally higher volumes and lower treatment costs have offset lower prices in the soil business. The cost reduction programmes implemented to mitigate the impact of the economic downturn are proceeding according to the original plan.
BelgiumIn Belgium, the business has experienced difficult trading conditions, particularly associated with some of the Foronex markets. Plans are in place to mitigate the impact. Landfill and Power are holding up well. The new Green Energy facility at Roeselare is now operating and will be fully commissioned in the coming weeks.
UKIn the UK, underlying trading is in line with our expectations and the cost reduction programmes are delivering the expected savings. In May we announced the disposal of the non-core landfill joint venture in Avondale for c£30m including debt. Although this will be dilutive the proceeds reduce net debt levels and increase the financial resources available to re-invest in targeted landfill diversion projects. We also announced the financial close of the PPP with Cumbria County Council worth around £720 million. This is performing well and contributing to our financial results, and we continue to actively pursue further PFI opportunities. The plan to launch Orgaworld in the UK is progressing well and we have identified several commercial and municipal opportunities.
Borrowings
The core net debt at 30 June 2009 was £217m, a reduction of £73m from 31 March 2009 principally due to the receipt of the Rights Issue funds, the Avondale proceeds and favourable exchange rates.
Commenting on the statement, Tom Drury, Group Chief Executive of Shanks Group plc said:
"We expect the current year to remain challenging and, given the unprecedented industry downturn, we have taken decisive action by reducing costs by £10m and tight management of capital expenditure and working capital. With strong market positions, proven technologies and a regulatory framework now accelerating the diversion of waste from landfill, once the economy picks up we will be well placed to deliver attractive earnings growth. We will continue to develop our three key principal growth areas of recycling, organic processing and UK PFI."
For further information please contact:
Shanks Group plc
Tom Drury, Group Chief Executive
Chris Surch, Group Finance Director
Telephone +44 (0)1908 650582
Tulchan Communications
Stephen Malthouse/Martin Robinson
Telephone +44 (0)207 353 4200