Waste management specialist Augean made solid progress during 2011, with profits up strongly and revenues rising 8 per cent to £31.1m, after adjusting for landfill taxes. The group is planning a capital reduction, too – a court date to tackle that has been set for 27 June – which should allow for a maiden dividend to be paid during 2012. Still, a punchy forward PE ratio of 16 leaves Augean's progress looking factored into the share price.
Chief executive Paul Blackler is confident that the group's solid performance is no blip and expects pre-tax profit to hit £2.7m in the year ahead as lucrative toxic waste disposal contracts work through. In fact, Augean received court clearance last year to dispose of low-level radioactive waste. That's significant as, while normal hazardous waste is disposed of at an average rate of £48 a tonne, disposing of low level radioactive waste yields over £500 a tonne – with only limited extra fixed costs. The group has already taken its first delivery as part of a 2,000-tonne contract and is looking to win more work throughout the year.
Broker Singer Capital Markets doubled its 2012 forecasts and now expects adjusted pre-tax profit of £2.7m, giving EPS of 2p (from £1.1m and 1.3p in 2011), with a maiden dividend of 0.15p.
AUGEAN (AUG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 32p | MARKET VALUE: | £32m | |
| TOUCH: | 31.5-34p | 12-MONTH HIGH: | 34p | LOW: 23p |
| DIVIDEND YIELD: | nil | PE RATIO: | 20 | |
| NET ASSET VALUE: | 47p* | NET DEBT: | 8% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 26.3 | -23.9 | -36.5 | nil |
| 2008 | 40.1 | 3.03 | 5.60 | nil |
| 2009 | 31.5 | -54.6 | -74.8 | nil |
| 2010 | 34.1 | 0.54 | 0.42 | nil |
| 2011 | 37.5 | 1.39 | 1.59 | nil |
| % change | +10 | +157 | +279 | – |
*Inlcudes intangible assets of £21.8m, or 22p a share | ||||
