Metals giant builds war chest as prices rebound
SCRAP metal giant European Metal Recycling (EMR) saw its sales rebound by 42% in 2010 to £2.8bn as soaring metals prices improved its fortunes.
Profits at the Warrington-based company also climbed by more than 50% to £155m.
EMR, which is owned and run by the Sheppard family, credited its success to “a return to more favourable market conditions”, according to a director’s report prepared by chairman Paul Sheppard.
The company also completed a £420m bank financing deal which chairman Paul Sheppard said had allowed it to “bring together a strong base of international banks that have the capacity to support the group’s current and future banking needs”. It also secured $300m worth of debt directly from US investors via a private placement.
“The combination of the banking facility and the private placement provides the group with a flexible and scalable capital structure for the financing of existing operations and future business development initiatives,” said Sheppard.
EMR said that operating profits were fuelled by a greater demand coupled with an ongoing control over its own overheads. Staff costs increased by £4.2m to £85.3m as employee numbers increased by 90 people. However, directors’ pay more than halved to £6m (£12.6m) and the amount paid to the highest director fell to £2.6m, from £6m in 2009.
During the year, the company spent £14.7m on acquisitions as it bought three US-based businesses that strengthened its position in the US market around its existing hubs in Wisconsin, Pennsylvannia and in New York state.
It has also developed new recycling facilities on brownfield sites in other parts of the US, which Sheppard said had given it “a significant presence based around key geographical positions in the Mid-Atlantic, the Gulf Coast and the upper Mid-West”.
The company said that it continued to invest in technology to recycle more of the residual waste from its shredded vehicles – most of which previously went to landfill. A joint vnture with MBA Polymers UK has completed construction of a facility in Worksop which will separate mixed polymers and recycle around 80,000 tonnes of plastic a year.
Similarly, it said that progress was being maintained in its joint venture with US-based Chinook Innovative Environmental Solutions to build a range of energy from waste plants which will burn any remaining waste to convert it into energy.
“In addition to creating significantly more green energy than the group consumes, these plants will be the final step along the road to zero waste, enabling recycling rates greater than 99% by 2015,” it said.
