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Mixed fortunes for Shanks & McEwan

Russell Hotten
Tuesday 21 November 1995 19:02 EST
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RUSSELL HOTTEN

Waste management group Shanks & McEwan, which yesterday reported half- year profits up 10 per cent to pounds 10.8m, is facing sharply contrasting fortunes at its two core divisions.

The waste services business, which disposes of domestic and industrial rubbish, is performing satisfactorily. But Rechem, which incinerates hazardous products, was hit by import restrictions and price competition.

Second-half profits have traditionally been lower, although Michael Averill, chief executive, said the company was now more evenly balanced throughout the year than the 60-40 per cent profits ratio last time. This meant 1995-96 pre-tax profits would exceed last year's pounds 16.3m.

Cost-cutting would continue at Rechem, which was feeling the effects of tighter government regulations on the import of hazardous waste and was the main cause of a pounds 2.4m fall in turnover to pounds 8.8m. However, Mr Averill said, savings had been made and it was "difficult to see how we can reduce costs an awful lot further". Rechem posted a first-half operating loss of pounds 100,000, against last year's pounds 239,000 profit.

At the waste management division, operating profits increased by pounds 100,000, despite a pounds 1.2m provision for the treatment of landfill sites. Turnover was down pounds 700,000 to pounds 48.2m.

The interim dividend is 1.2p, up 9 per cent.

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