Waste management firm suffers 15% share price dive
The price of Augean shares dropped dramatically yesterday after it indicated that profits would be at the lower end of expectations due to cost cutting exercises and the poor performance of new acquisition Colt.
In a drop of 15.87%, the price of its shares declined by 10.0p, closing at 53.0p.
Yesterday a statement by the Wetherby waste management group said that a recent cost reduction programme was underway which was expected to generate savings of £2m from August.
However this would incur £700,000 in costs and help push profitability towards the lower end of market expectations, it said.
Augean also said that the performance of Colt, which it acquired in May 2016, was “disappointing” due to losses on one major legacy contract, pulling the industry and infrastructure division down with it.
However the performance its radioactive waste business improved after two combined £4m contracts, and its North Sea division will be profitable, it said, compared to a £300,000 loss in the same period last year.
In May 2017, Augean announced that it had seen double digit growth in 2016, with pre-tax profits reaching £7.0m, even after having paid out £1.2m after a customer dispute. The company warned then of a lacklustre performance from Colt, but it had broken even.
