Final results for the year ended 31 December 2018

We are pleased to announce our preliminary results for the year ended 31 December 2018.

Financial highlights

From continuing operations and excluding exceptional items and share based payments1:

  • Adjusted1 revenue excluding landfill tax increased by 22% to £68.8m (2017: £56.3m)
  • Adjusted profit before taxation1 increased by 69% to £11.4m (2017: £6.8m)
  • Adjusted1 basic earnings per share increased by 56% to 8.52 pence (2017: 5.47p)
  • Sale of loss-making Colt and Colt Property for £2.2m and AIS for £4.0m in 2018
  • East Kent sale completed in January 2019 for £3.35m
  • Net cash position of £8.2m at year end (2017: net debt of £10.8m), at 15 February 2019 further improved to £12.5m with additional £2.3m to come from sale of East Kent

Operational Highlights 

  • Excellent progress on business optimisation programme with cost savings exceeding the target
  • Sales growth in all sites with Treatment & Disposal up 24% and North Sea 19%.
  • Double digit growth from residues from Energy from Waste (EfW) plants despite customers having a disproportionate amount of “downtime” and no new municipal EfW plants opening in 2018.  Recovery in the market position for soils reflecting a more focused team from the end of H1 – overall volumes up by around a third for the full year despite being down one third in H1
  • Continued diversification in North Sea into industrial services, decommissioning and waste management more than offsetting reduced drilling volumes resulting in profit more than doubling. The forward contract base is secured with a major contract renewal and new significant decommissioning contract out of Dundee
  • Contracts renewed in January 2019 representing one third of 2018 Group profit and new contract awards with EfW plants expected to start late 2019 with full impact by 2021

HMRC

  • The Group maintains its dialogue with HMRC with respect to landfill tax and has received final assessments in respect of two Group companies – Augean North and Augean South
  • Hardship has been granted for the assessments received by Augean North, confirming that no cash payment will be required for this Company before the conclusion of any tribunal.  The Group is legally challenging these assessments through tribunal

Outlook

  • Further growth targeted in the core key markets of Energy from Waste and North Sea Decommissioning
  • Strong start to initial trading in the first months of 2019 with results well ahead of prior year and in line with expectations.  The Board is confident in the Group’s prospects for the year

Commenting on the Results, Jim Meredith, Executive Chairman, said:

2018 was a pleasing year as the Group continued to make significant changes to streamline activities, enhance performance and focus on both cash generation and retention. Strong trading in the Group’s underlying business, the exit from unprofitable businesses, good cash control and cost savings have enabled the Group to report a cash balance of £8.2m compared to the £10.8m debt position reported last year.  The Group is currently experiencing strong initial trading for the start of 2019 and the Board is confident in the Group’s prospects for the year. Our focus will continue to be on cash control and so improving our cash position.

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