Restructure for Augean as it aims to pay first dividend

The Wetherby-based company is to close down a number of dormant subsidiaries in a bid to tidy up the business and implement a capital restructuring to prepare the group for dividend payments.

Augean’s chief executive Paul Blackler said the 14 dormant companies, which don’t have any employees, were racked up during a series of acquisitions.

“We are moving assets around to create sufficient profits so we can pay dividends in 2012, if that is what the board decides to do,” he said.

The group said trading in the first six months of the year to June 30 was in line with expectations despite very competitive market conditions.

Last year’s recovery softened in the first half of 2011, although the group has won new project work and new customers.

“We have recovered from the lull in April caused by the holidays and have returned to levels we were seeing before that,” said Mr Blackler.

“We have won work and increased our market share. We have won some large remedial projects on landfill sites including gas works, railway projects and new build housing.”

The group hopes to start taking delivery of low level waste at its East Northants site in the fourth quarter of this year with profits coming through next year.

This is subject to a High Court hearing on November 2.

“The decision might take a week or two. There is leave to appeal, but if it’s not accepted that would be the end of it,” said Mr Blackler.

He said the challenge is not related to radioactivity, but a technicality based on environment impact assessment law.

The group is confident the Secretary of State’s decision will be upheld and it is preparing the East Northants site to receive low level waste towards the end of this year.

Augean made a £120,000 pre-tax profit in the six months to June 30, against a £430,000 loss the previous year. Revenues including landfill tax rose 19 per cent to £19.4m.

Augean treats and disposes of hazardous waste such as contaminated soil and asbestos.

In the landfill division, hazardous volumes rose 29 per cent to 123,000 tonnes from 95,000 tonnes.

As part of the restructuring the two existing divisions, landfill and treatment, will be carved into three new divisions; waste network, land resources and oil & gas services.

“We are cautious over the outlook for the full year,” said Mr Blackler.

“But with the actions taken to manage underperforming business units coupled with their continued development, we still expect profit before tax to be in line with expectations.”