Interim Results 2016/17

Shanks Interim Results 2016/17

Business overview*

  • Good Group trading performance, with revenue and underlying profit growth at constant currency in line with our expectations and ahead of our expectations at reported currency given weakness of sterling
  • Commercial Waste Division performed strongly, with trading profit up 20%* to £11.1m. Both the Netherlands and Belgium performed well, with volume growth in the Dutch construction, commercial and organics market segments
  • Hazardous Waste Division performed well, with trading profit up 38%* to £11.4m primarily due to improved soil processing and water volumes
  • Ongoing market and operational challenges in the Municipal Division, as previously reported, resulted in a significant reduction in trading profit to £1.1m.  Corrective action programmes being taken expected to deliver improved operational performance from the second half
  • Commissioning of Derby PPP project delayed by six months, as previously reported, due to a contractor insolvency resulting in a £1.7m charge for liquidated damages
  • Continued good progress with Group self-help initiatives to improve margins
  • Pre-tax returns on investment portfolio increased to 21.1% (March 2016:19.5%)

Financial summary

  • Revenue up 7% at constant currency to £348.4m (up 17% at reported rates)
  • Underlying profit before tax up 23% at constant currency to £15.4m (up 44% at reported rates)
  • Exceptional and non-trading items of £16.3m, £10.2m of which related to the proposed merger, resulting in a statutory loss before tax of £0.9m
  • Underlying EPS1 up 23% at constant currency to 2.7p per share (up 43% at actual rates)
  • Core net debt in line with management expectations at constant currency; reported core net debt of £244m reflects adverse currency movement  
  • Interim dividend maintained at 0.95p per share adjusting for the bonus factor within the recent rights issue

1In accordance with IAS33 as the rights issue has been completed prior to this date the average number of shares used in the EPS calculation for both periods has been adjusted for the bonus factor.

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