Augean (AUG) delivered another mixed set of results at the full-year mark, with strong growth in the underlying business countered by continued weakness in the North Sea services division. Problems at the waste management group's East Kent high-temperature incinerator (HTI) site precipitated a £3.3m writedown, which, along with £1.2m in costs linked to a commercial dispute, fed into a 37 per cent fall in operating profits, to £2.1m.
Revenues at the North Sea services division were down 13 per cent on 2015. It is still far from certain how long it will take industry capex budgets to retrace significantly, so Augean is looking to profit from the ebb tide through a partnership with Forth Ports to manage waste arising from the decommissioning of offshore equipment at the Port of Dundee.
Despite the challenges, the largest division by revenue - energy and construction - increased the total volume of waste disposed by nearly a third to 574,000 tonnes, while the industry and infrastructure business delivered good performances across all sites, increasing revenues by 61 per cent to replace North Sea services as the second-largest division.
Analysts at N+1 Singer are forecasting adjusted profit before tax of £8.5m, giving adjusted fully diluted EPS of 6.6p in 2017 (£7.1m and 4.5p in FY2016).
AUGEAN (AUG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 54p | MARKET VALUE: | £55m | |
| TOUCH: | 53-55p | 12-MONTH HIGH: | 65p | LOW: 43p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 135 | |
| NET ASSET VALUE: | 53p* | NET DEBT: | 20% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 36.7 | 4.23 | 3.20 | 0.25 |
| 2013 | 43.5 | 4.20 | 3.13 | 0.35 |
| 2014 | 55.0 | 5.93 | 4.64 | 0.50 |
| 2015 | 61.0 | 2.52 | 1.60 | 0.65 |
| 2016 | 76.0 | 1.27 | 0.40 | 1.00 |
| % change | +25 | -50 | -75 | +54 |
Ex-div: 15 Jun Payment: 29 Jun *Includes intangible assets of 26.3m, or 26p a share | ||||
