HAZARDOUS waste firm Augean is forecasting profits will more than double this year as it starts to take low level waste from decommissioned nuclear power stations.
The Wetherby-based company recently won a court battle allowing it to take in low level radioactive material at its East Northants site in Northamptonshire, a former clay pit, despite local opposition.
Now the group has signed an agreement with Low Level Waste Repository Limited to take in rubble from old offices, laboratories and ancillary buildings from redundant nuclear facilities across the UK.
Any materials that were involved in the power generation process will continue to be sent to a high level waste plant in Cumbria.
Augean’s finance director Richard Allen said the rubble will be brought in in containers and disposed of within the landfill site before being immediately covered over.
“The levels of radiation from this rubble is often lower than what occurs naturally,” he said. “It’s a very tightly controlled process.”
Chief executive Paul Blackler said the radiation levels are so low that the radioactivity diminishes during the life of the site. Once the site is closed it will be monitored for 60 years and then turned into arable land.
“We’ve been through a long process to show it’s sound and we’ve done that now,” said Mr Blackler.
The group estimates its low level waste business will add £1m to sales this year. Along with a nine per cent increase in profits at the core business and a £200,000 benefit from mineral extraction, Augean believes it should make a pre-tax profit of £2.7m in 2012.
Yesterday it announced a near trebling of underlying pre-tax profits from £400,000 to £1.1m in the year to December 31.
While low level waste will be the big earner in the short term, Augean believes it has long term potential in offshore waste management.
The group has extended its relationship with Scomi Oiltools to provide waste management services to North Sea operators at Aberdeen.
“There’s lots of hazardous waste that comes onshore,” said Mr Allen. “Drilling for new oil and gas produces waste rock contaminated with oils and oily liquid waste. It’s brought onshore and we then extract it from the boats, treat it onshore and dispose of it”
Another opportunity lies in decommissioning old drilling platforms. Mr Allen said the group should benefit from tax relief measures outlined in last week’s Budget.
Another new source of income will come from mineral extraction at Cook’s Hole in Northamptonshire.
“It’s an old quarry that contains three million tonnes of limestone that can be used in road building and construction,” said Mr Allen.
“We plan to extract the limestone through a contractor, so our involvement is as a landlord.”
He added that the expected £200,000 a year income will be a helpful addition to cashflow.
The group said it approaches the year ahead with some optimism. It reported a positive start to trading in 2012, particularly in its land resources division.
It added that risks may still materialise if UK economic conditions deteriorate, but recent changes are expected to provide some resilience.
The group recently reorganised its business into three divisions. Land Resources will include landfill and recycling, Waste Network will cover hazardous waste and Oil & Gas Services will treat and dispose of chemicals and oil-based wastes.
Augean’s shares rose five per cent last night, to close up 1.5p at 31.5p.