Waste management firm sees profits rise
Specialist waste management business, Augean, saw pre-tax profits rise in the year ended 31 December 2020, despite a drop in revenue.
The Wetherby-headquartered business recorded profits before taxation of £19.3m compared to £19.2m in 2019. This came despite a 16% decrease in revenue which was attributed to a shortfall in its North Sea Services.
This decrease in activity was a result of the Covid-19 pandemic which saw oil prices fall and therefore a reduction in drilling and decommissioning activity. Despite this the firm believes this sector will grow to be its most significant revenue and profit generator moving forward and as a result purchased the the Haliburton Ecocentre at Peterhead to process drilling and other waste from the North Sea oil and gas customer base.
The pandemic also resulted in a fall in sales for its Treatment and Disposal unit, which despite recording improved profits saw revenues fall as a result of the closure of parts of the construction sector during the first national lockdown.
Jim Meredith, executive chairman Augean
Jim Meredith, executive chairman, Augean, noted that in spite of the significant impact of Covid-19, the “firms underlying trading was positive and robust”.
The business has also continued to engage with HMRC on a disputed landfill tax assessments which the Group paid in full in 2019.
In October it received a £1.6m repayment of landfill tax which related to a single biomass customer. However the currently has a claim worth £11m submitted to HMRC, which has been heard at the Lower and Upper Tax Tribunals, and which found against HMRC, although an appeal process is underway.
Meredith said: “The group successfully argued and won one aspect of our Landfill Tax (LFT) dispute with HMRC, with the repayment of £1.4m (excluding costs of up to £0.2m still sought) which was received in December 2020. We await the decision of the Lower Tier Tax Tribunal on one other key aspect of the LFT dispute.”
Adding that based on legal advice received, the firm continues to argue it has “correctly collected and paid the appropriate landfill tax” and it will “continue to robustly challenge the assessments received through the tax tribunal system”.
Looking ahead the chairman states the group has “set ambitious internal targets for the 2021 year which will undoubtedly be an economically uncertain period for the UK whilst Brexit plays out and the impact of Covid-19 continues”. However the board remains confident in the Augean’s prospects for the financial year with growth targeted at its core niche markets and it proposes to resume paying dividends in 2021.
