Shanks chief executive Tom Drury noted the eventful year his management team had experienced, dealing with a rights issue and an . He also had to deal with some major operational issues, too.
Lower waste volumes in the Netherlands, the largest geographical segment, pricing pressure, the impact of harsh winter weather and the decline in Belgian landfill all impacted business and, but for £20m of cost custs, the 24 per cent slump in underlying pre-tax profits would have been far worse.
On the upside, goals set this time last year were nearly all achieved. Maintenance spending as a percentage of depreciation was reduced from 96 per cent to 53 per cent, the Avondale landfill joint venture was sold for £27m in a bid to divest non-core assets, and strong cash generation meant net debt was reduced by £86m. What's more, the group invested £30m in strategic growth projects, developing sustainable waste management. The UK is now the biggest focus as land fill still makes up around 56 per cent of waste, compared with 1 and 3 per cent in Germany and the Netherlands, respectively.
Investec Securities forecasts adjusted pre-tax profits of £32m and EPS of 5.8p (from £33.2m and 6.5p in 2010).
Shanks (SKS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 99p | MARKET VALUE: | £393m | |
| TOUCH: | 98-99p | 12-MONTH HIGH: | 136p | LOW: 62p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 21 | |
| NET ASSET VALUE*: | 97p | NET DEBT: | 88% | |
| Year to 31 March | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 443 | 30.3 | 6.7 | 4.5 |
| 2007 | 509 | 46.1 | 10.6 | 4.6 |
| 2008 | 564 | 41.3 | 9.5 | 4.9 |
| 2009 | 685 | 29.3 | 1.0 | 1.7 |
| 2010 | 684 | 19.6 | 4.8 | 3.0 |
| % change | -0 | -33 | +380 | +76 |
Ex-div: 7 Jul Payment: 6 Aug *Includes intangible assets of £300m, or 76p a share. | ||||
