Waste treatment specialist Nature (NGR) saw its profits hit hard last year as the cost of pursuing new ventures wasn't matched by an increased revenue stream. The dividend was axed, too - all of which helped the shares slide 15 per cent on the day these figures appeared.
Specifically, management underestimated the lead times between securing a contract and establishing an income and this, together with further investment in new offshore water treatment rental units, left profits down sharply. Similar overruns were experienced in the engineering division, where turnover halved to £0.69m. However, trading in the new year has been boosted as these delayed revenue streams start to develop.
Two more compact treatment units - used to treat oil waste on rigs - have now been built and all four units are almost fully rented out. A further three units will be built this year. However, port processing facilities remained the core source of income, and collected volume waste in Rotterdam grew 21 per cent - although weak economic conditions meant that margins were squeezed as ship owners pressed for better terms. Moreover, the Gibraltar processing facility remained closed and extra costs were incurred shipping waste to the group's other terminal in Portugal.
Broker WH Ireland expects adjusted pre-tax profit of £1.8m for 2013, giving EPS of 1.9p (from £0.5m and 0.5p in 2012).
| NATURE (NGR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 35.6p | MARKET VALUE: | £28.2m | |
| TOUCH: | 35-36p | 12-MONTH HIGH: | 47p | LOW: 21p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 187 | |
| NET ASSET VALUE: | 34p* | NET CASH: | £0.78m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 1.70 | 0.50 | 1.80 | nil |
| 2009 | 5.10 | 1.60 | 4.10 | 0.60 |
| 2010 | 6.80 | 1.50 | 3.70 | 0.70 |
| 2011 | 15.1 | 1.52 | 1.42 | 0.50 |
| 2012 | 14.3 | 0.23 | 0.19 | nil |
| % change | -5 | -85 | -87 | -100 |
Ex-div: - Payment: - *Includes intangible assets of £13.3m or 17p a share | ||||
