Shanks & McEwan restructures: Interim profits fall by pounds 6.6m at waste management group
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Your support makes all the difference.SHANKS & McEWAN, the waste management and construction group, is to shake up its business after reporting a pounds 6.6m fall in interim profits to pounds 9.4m.
The divisional structure is to be broken up, with control being returned to head office, resulting in the loss of 100 jobs. The shares, which have performed poorly since a profits crash last year, fell 12p to 108p.
Roger Hewitt, chief executive, said the results were disappointing. 'But we have taken some pretty robust action, as we can't keep capacity sitting and waiting for an upturn that may not bring back the volumes . . . of the past.'
The principal problem for Shanks is that companies cut back waste production during the recession and are unlikely to let it rise significantly as the recovery takes hold. 'Our strategy going forward will be to look to treat less waste at more cost,' Mr Hewitt said.
Operating profits from the waste services division, which disposes of industrial and household waste to landfill sites, fell 20 per cent to pounds 6.6m on turnover that rose 4 per cent to pounds 34.1m.
The environmental services side, which deals with hazardous waste, saw operating profits fall 29 per cent to pounds 4.6m on turnover that was 3 per cent lower at pounds 19.8m.
The construction division, which was the cause of Shanks' woes last year with a pounds 17m provision against contract disputes, made an operating loss of pounds 700,000 against a pounds 2.4m profit.
Mr Hewitt said business was now under control, with a new managing director. The group hoped to appoint a new finance director early in the new year, following the abrupt departure of Andrew Fowler in October.
Mr Hewitt admitted his departure was connected to a degree of unhappiness about accounting procedures and policies.
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