Benelux woes hit waste group Shanks

Waste group Shanks reported tough trading in Belgium and the Netherlands but cheered investors with stable performances in its other businesses, lifting its shares.

Shanks said it had had a tough first half in its Benelux operations, where markets for construction and commercial waste remained weak and competition forced down prices and volumes.

The group is responding by focusing on areas with higher profit margins or greater competitive strength, streamlining back office functions to cut costs and launching programmes to reduce transport costs and increase waste sorting line productivity.

Revenue in the six months to 30 September fell 1% to £304.8m at constant currencies and 6% in actual terms. Underlying earnings dropped 11% to £38.5m at constant currencies and 17% in total. Underlying profit before tax dipped 35% at constant currency to £11.2m

But the company said its hazardous waste, organics and UK municipal waste businesses were continuing to hit targets.

Chief executive Peter Dilnot said: "We are confident the actions we're taking to address these market pressures and improve our operational efficiency will support a stronger second half and a full-year result in line with our revised expectations.

"Our three growth divisions are continuing to deliver against their strategic objectives and the group is well positioned to deliver profitable growth over the longer term."

Shares rose 1.25p or 1.36% to 93.25p at 12:26 in London.