AUG Augean Plc

TIDMAUG

RNS Number : 7847U

Augean Plc

23 January 2017

23 January 2017

Augean plc

("Augean" or "the Group")

Trading update

Augean, one of the UK's leading specialist waste management businesses, provides the following update ahead of issuing its preliminary results for the year ended 31 December 2016.

2016 Group performance

The Group confirms that underlying profit before tax is expected to be in line with consensus market expectations.

The Group generated strong net operating cash flows during 2016 and as at 31 December 2016 net debt was GBP10.8 million which is GBP2.3 million better than expected.

2016 business unit performance

The Group operates five business units, in diverse markets. The 2016 performance of those businesses is summarised as follows:

-- Continued strong performance from Energy & Construction, with further growth in Air Pollution Control Residue (APCR) volumes and a smaller than expected reduction in the volume of construction soils received by Augean sites from the unusually high level of 2015. The significant increase in APCR volumes, underpinned by a number of contract wins in the first half, has continued through the second half;

-- Performance from Radioactive Waste Services is in line with expectations but as previously reported, has been impacted by a sharp reduction in volumes from UK nuclear decommissioning;

-- Strong performance from Industry & Infrastructure with a record profit. Colt Industrial Services (Colt), which was acquired in May 2016, has had a slower than anticipated start albeit with positive signs of an improved performance and growing sales pipeline;

-- Continued strategic traction at Augean Integrated Services, with further success in winning additional Total Waste Management contracts with top-tier customers, typically with terms of 3-5 years. Strong top-line growth of over 35% has been achieved in 2016 with an encouraging pipeline of opportunities for 2017. The East Kent High Temperature Incinerator did not achieve breakeven in 2016 and the operational improvement programme is expected to ensure increased levels of plant availability.

-- Augean North Sea Services ("ANSS") has traded strongly in the second half after a loss-making first half of 2016. ANSS has progressed further on its diversification objective, with additional contract wins helping to offset the continued reduced market activity in its drilling waste management business. The previously announced investment at Port of Dundee is attracting substantial interest from the North Sea decommissioning market for ANSS to undertake onshore waste management.

Dr Stewart Davies, Chief Executive Officer, commented:

"We have had an encouraging start to the year and have good momentum across our businesses. Despite some challenging market conditions in 2016, we have secured further waste management contracts with top tier customers that will progressively diversify our revenue streams. In view of the opportunities ahead, the Board remains confident in the Group's delivery of further sustainable growth, in line with our strategy."

The Group's preliminary results for the year ended 31 December 2016 are expected to be announced on 20 March 2016.

-Ends-

For further information, call:

 
Augean plc 
 Dr Stewart Davies, Chief Executive 
 Mark Fryer, Group Finance Director   01937 844 980 
N+1 Singer 
 Shaun Dobson 
 Alex Price                           020 7496 3000 
FTI Consulting 
 Oliver Winters 
 Fiona Walker                         020 3727 1000 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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