Snow fails to put the freeze on Augean's progress

The Wetherby-based company said the heavy snow in January, February and December 2010 had a significant impact on the company, particularly in land-fill.

The group's diggers can't work in freezing conditions, which can also disrupt attempts to clean lorries on their way in and out of the site.

Despite this, the group said profits before tax and exceptional costs for the year to December 31 are likely to be slightly ahead of expectations.

The group also anticipates a further reduction in net debt following continued positive cash generation across the group.

Net debt at the end of the half year stood at 4.9m.

Analysts at Singer Capital Markets expect full-year net debt to be about 4m, compared with its expectations of 5.7m, because of lower spending and better working capital outcome.

The group said the land remediation market has shown signs of recovery.

Augean reported an 18 per cent year-on-year uplift in landfill volumes, to 303,261 tonnes from 257,938 tonnes in 2009, although it warned that competitive pressure continues on prices and margins.

The treatment division saw an improvement in profits with the majority of sites making positive profit contributions.

The group said it is dealing with the impact of a safety incident at its Cannock site which has temporarily shut the local process operation.

The Health and Safety Executive is conducting an ongoing investigation into the causes, and Augean is also undertaking its own internal review.

The group said it has insurance in place for incidents of this kind and it is working with its insurers to progress a claim and the reinstatement of the plant.

Augean is in the process of appealing against a council decision blocking it from accepting low-level nuclear waste at its King's Cliffe site, near Peterborough.

The planning appeal was conducted last October and the planning inspector will submit his report to the Secretary of State for Communities and Rural Affairs next month.

Augean expects a decision by May 24.

Northamptonshire County Council's decision to block the plans came after Augean submitted a planning application to allow its East Northants resource management facility to dispose of low level waste.

This would include construction waste, mainly soils and rubble, with small amounts of radioactivity, coming from the demolition of offices and the decommissioning of power stations.

It would also include other sources such as hospitals and science and research facilities.

The planning proposal was supported by planning officers of the county council and by the Environment Agency, which has been urgently seeking cheaper outlets for the low-level nuclear waste arising from demolishing ancillary buildings at nuclear sites undergoing decommissioning.

Protesters said the landfill site was close to the source of Huntingdonshire's water supply.

Augean said it is "cautiously optimistic" about the outlook for the year ahead.

"Trading has started positively in the early weeks, particularly in the landfill division," said chief executive Paul Blackler.

"With forecasts of modest growth in industrial outputs, North Sea exploration and land remediation projects we expect improvements in profitability during 2011."

Singer Capital Markets' analyst Andy Murphy said: "Augean has released a positive 2010 full year trading update in which it expects to slightly exceed market expectations.

"This should be viewed positively, coupled with early signs of increased landfill and treatment volumes."

He estimated that December's snowfall would cost the company about 200,000.

Augean's shares rose five per cent last night, a rise of 1.25p, to 25.75p.

The company, which is one of the UK's leading hazardous waste businesses, will publish its 2010 full-year results on March 29.

Augean: The history

Augean was formed in August 2004 as an acquisition vehicle to buy and build up businesses in the UK waste sector.

It raised 2m through a listing on London Stock Exchange's AIM.

Later that year it raised 100m through a placing to buy two companies, Atlantic Waste Holdings and Zero Waste Holdings.

In 2005 it opened its headquarters at Wetherby, West Yorkshire, and in August that year it bought Proactive Waste Solutions, a hazardous waste treatment and transfer business which was based at Cannock.

By 2006, it had restructured to establish a treatment and landfill division.

The group has since continued on the acquisition trail.

In October 2009, it raised 13m through a share placing to reduce debts and provide working capital to enable the group to enter new markets.