Waste management firm reports improved trading in first half of year
Specialist waste management business, Augean, has started to see improved trading and increased profits after selling two loss-making divisions.
The Wetherby-based firm issued a trading update ahead of publishing its interim results for the six-month period ended 30 June 2018.
The listed company said that in the period it saw an increased cash volume from Energy from Waste plants, nuclear and North Sea decommissioning and significant cost reduction. The loss-making activities of Colt Industrial and Augean Integrated Services were also sold during the first of the year.
Augean said: “First half profit is ahead of prior year by over a third on a like for like basis and the Group expects to deliver full year profit growth at least in line with market expectations.”
Net debt at 30 June 2018 was £2.7m, compared with £10.8m at 30 December 2017, with the firm’s current expectation to be debt free by year end.
Earlier this year, the firm issued a profit warning and updated the markets of the impact of an HMRC investigation looking at whether the company had paid sufficient land fill tax in relation to its treatment and disposal of hazardous waste.
Augean said yesterday: “Having taken legal advice confirming its position, Augean continues to believe that the Landfill Tax (LFT) Assessments received to date are to protect HMRC’s four-year lookback. Augean is maintaining positive discussions with HMRC in an effort to resolve the matter.
“The Group will robustly challenge the LFT Assessments that it has or may receive from HMRC, through the tax tribunal system if appropriate. Augean continues to work with stakeholders in the waste and other affected industry sectors about the broader adverse implications for the continued and necessary proper treatment of hazardous waste.”
Jim Meredith, executive chairman, said: “Pleasingly the first half of 2018 has delivered significant and sustained progress having, as anticipated, grown sales in key strategic markets, whilst removing some unprofitable activities from the business, reducing the business cost base and driving cash generation to deliver significant debt reduction.
“The team at Augean have achieved this whilst responding to HMRC’s LFT Assessments and to that end should be commended. I would like to thank them all for their efforts. Notwithstanding the ongoing HMRC matter, the Board remains confident in the prospects for the full year at least in line with expectations.”
