EMR denies rumours of financial difficulties

EUROPEAN METAL RECYCLING, the Warrington-based scrap metal giant, has denied “unfounded” market rumours that the company is suffering financial problems and is for sale.

The group issued a statement last week, responding to rumours it said had grown “more fanciful and wild” – a highly unusual move for a private, family-owned company.

The statement clarified several points: that the group is not for sale; that US subsidiary Southern Recycling has not filed for bankruptcy protection and has a strong balance sheet; that UK suppliers have not had credit insurance declined for EMR; that the group had no financial exposure to Lehman Brothers; and that Colin Iles has not walked out on the business and remains as group managing director and chief executive of US operations.

“Despite unprecedented market conditions, EMR finds itself in a strong position going into the last quarter of its financial year. Market conditions favoured the industry in the first half of the year and EMR were well placed to take advantage on the back of a strong prior year performance,” the group said in its statement.

The remarkable announcement came the day before the release of EMR’s full year accounts to the end of December 2007, which show a 14.7% increase in pre-tax profits to £119.3m, from £104m in 2006. Turnover was £2.24bn, up from £1.69bn the previous year.

In the UK the group strengthened its position in Scotland with the September 2007 acquisition of scrap metal processor Henderson Kerr.

And it grew the non-ferrous side of the business by acquiring Mountstar Metal Corporation in April 2007, as well as starting a joint venture company with MBA Polymers to recover and recycle plastics usually sent to landfill or incinerated.

The group also reaffirmed its strategy of growth through acquisition in the US.