Waste management firm issues profit warning as CEO resigns

Waste management firm Augean issued a profit warning this morning after reporting a “continued weak trading performance” as it also announced the resignation of its chief executive.

Stewart Davies has resigned from his position as CEO with immediate effect, as the Wetherby company said the impact of an HMRC investigation on whether the company has paid sufficient land fill tax in relation to its treatment and disposal of hazardous waste and weaker trading is expected to lead to full year profit being below the level of 2016. It also expects 2018 to be lower than previous expectations.

Augean said it remains in “active discussions” with HMRC with regard to the landfill tax assessment, which it believes will “not be resolved imminently”.

The company’s board said it has implemented a further round of cost reduction including a management re-organisation, to save at least a further £1.7m of cost annually.

“This is incremental to the saving of £1.3m already announced in September. The one-off cost of this will be approximately £0.9m and will be shown as an exceptional cost (in addition to the £0.7m for the first round of cost saving). The additional cost savings are expected to be realised fully in 2018 with the one-off exceptional costs incurred in 2017,” Augean said.

The company also announced a series of board changes this morning, with Jim Meredith, currently the non-executive chairman of the group, expanding his role to that of executive chairman to lead the business through its ongoing re-structuring and cost reduction programmes.

Christopher Mills and Roger McDowell have been appointed to the board as non-executive directors.

Mills founded Harwood Capital Management in 2011, a successor from its former parent company J O Hambro Capital Management, which he co-founded in 1993. He is investment manager of North Atlantic Smaller Companies Investment Trust and is a non-executive director of several companies.

McDowell returns to Augean having previously been a board member of the group for 11 years between November 2004 and June 2015. During his previous tenure on Augean’s board, he held the position of interim CEO (2006 – 2007) and interim chairman (2010 – 2012).

Jim Meredith, executive chairman, said: “These new appointments greatly enhance the breadth and depth of the board as well as adding additional commercial experience. We are pleased to welcome back Roger who has extensive operational experience of Augean from his previous 11 year tenure as a director. In addition, Christopher brings with him significant experience of achieving operational excellence and growth while seeing through efficiency and cost reduction programmes.

“We wish Stewart well in his future endeavours and thank him for his efforts whilst chief executive of Augean.

“The group has been through a difficult period but I believe its underlying business remains strong and that our strategy and new board now in place will see the group make solid progress.”

Click here to sign up to receive our new South West business news...
Close