International waste management company Shanks Group plc has today (30 January) issued its interim management statement for the period 1 October 2014 to date.

Shanks operates four divisions: Solid, Hazardous, Organics and UK Municipal, has operations in the Netherlands, Belgium, UK and Canada, and employs around 3,600 people.

According to the group, trading performance has continued in line with expectations since the interim results were announced in November 2014.

Trading performance

Solid Waste Benelux traded in line with expectations and underlying market drivers continue to ‘evolve as forecast’, but the Belgian business has reportedly been impacted by weak end markets for its solid recovered fuel (SRF) products and by recent union strikes.

However, Shanks said that the Dutch Government’s incineration tax (of €13 a tonne for domestic waste), and reducing incinerator capacity in the Netherlands, is ‘expected to help to stabilize, and ultimately increase, pricing for recycling in the Netherlands’.

Hazardous Waste has also seen improved performance, with December seeing record output. However, the group warned that full year performance might be slightly below expectations ‘due to the ramp up phase of the new assets’.

Investments in the new Total Care Centre in Rotterdam and the new water storage tanks at ATM are said to be ‘on track’ for 2015 commissioning.

Organics continues to trade ‘robustly’ in both the Netherlands and Canada, with an improving performance from Scottish and Belgian anaerobic digestion (AD) facilities. The group has highlighted that it was appointed Preferred Bidder for the 25-year municipal contract with the City of Surrey in Canada, which it hopes to secure.

UK Municipal has also ‘performed well’ in the period, and the £300-million build programme for new facilities at Barnsley Doncaster and Rotherham (BDR), Wakefield and Derby remain ‘on track and on budget’.

Cash and borrowings

Net debt at the end of December 2014 increased by £15 million to £165 million, but the group says there is ‘no change to the year end expectation’.

Outlook

Stating that ‘markets remain challenging’, and that the Euro is weaker than estimated, Shanks said it expected a ‘modest translation impact on reported results’.

However, Peter Dilnot, Group Chief Executive, commented: “The group has continued to trade in line with our expectations in markets that have remained challenging. However, underlying market drivers for Benelux solid waste are showing some initial signs of improvement, as forecast. We continue to make good progress in our three core value drivers of: building capability and advantage in Solid Waste; investing in infrastructure that will deliver high quality earnings growth; and active portfolio management.

“As the Euro is currently weaker than our guidance of €1.25:£1, we expect a modest translation impact on our reported results. However, the Board remains confident that the Group’s full year result will be in line with its expectations on an underlying basis.”

Find out more about Shanks Group plc, or read the interim results from November 2014.