Peter Dilnot, the new chief executive of waste management group Shanks, has only been in the job three and a half months during which time the shares have lost 25 per cent of their value as the economic outlook in core markets of Belgium and the Netherlands has worsened. News that finance director Chris Surch is leaving in the summer to join Firstgroup will not have helped either.
The full-year results were actually pretty solid with underlying pre-tax profit up 10 per cent to £38.8m helped by strong recyclate prices and a strong performance from the Dutch hazardous waste business. The dividend was given a 6 per cent lift. However, Mr Dilnot said the outlook remains challenging in the Benelux countries, and in solid waste in Holland, which is a worry as combined they are responsible for 73 per cent of revenue and over 80 per cent of trading profit. The waste management market is facing further pressure from high-cost inflation and declining volumes of waste, so costs have been cut and Shanks plans investing a further £150m in new sustainable waste projects. It has already invested over £100m on projects that are now generating an annualised post tax return of over 12 per cent.