Two days after its shares were downgraded by Credit Suisse, waste management business Shanks (SKS) warned the market that its full-year results will now be around 15 per cent below existing expectations. The expected shortfall is due to a poor performance at its Benelux solid waste business, with the Netherlands construction and demolition sector singled out as a particular concern.
But management stressed that trading at the group's other businesses remains sound. Indeed, Shanks' three growth divisions, hazardous waste, organics and UK municipal, traded in line with expectations in the six months to 30 September, while two bids for long-term organic contracts in Canada stand as possible share price catalysts.
Conditions in the Benelux Solid Waste markets are likely to remain challenging for the foreseeable future, but the group is moving ahead with its investment programme in Hazardous Waste and UK PFI infrastructure. Construction projects at Barnsley, Doncaster and Rotherham and Wakefield are on track for completion within their respective timeframes and budgets, while funding has been secured for a £145m development in Derby.
