Email Facebook Twitter

Exclusive: Hayden Locke, CEO Emmerson plc, a low cost high margin potash investment
Richard Slape, Oil consultant - Avoiding Losers and Picking Winners, his personal strategy

ShareCast News

Renewi shares trashed as it warns on profits

Thu, 8th Nov 2018 10:52

(Sharecast News) - Renewi shares tumbled on Thursday after the waste management company warned on profits, saying it does not expect to resume full soil production at its ATM waste plant this year.

ATM - one of Europe's largest facilities for the treatment of contaminated soil, water, sludges and packed chemical waste - has been running at reduced capacity since August 2017 after regulators made repeated inspections of the treated soil.

Renewi said it was informed by regulators on Wednesday that further soil analysis was required. In the meantime, the group will reduce production by around 30% of capacity until the situation is resolved, a move that is expected to hit operating profit by up to 3m per month for the current financial year.

Renewi said it does not currently expect to resume full production this financial year.

As far as its interim results are concerned, Renewi said trading in the six months to 30 September was broadly in line with management's expectations, against a strong result in the prior period.

During the period, revenue rose 1% to 900m, but underlying pre-tax profit slid 12% to 33.9m and the interim dividend was left at 0.95p a share.

The company also announced its intention to initiate the sale processes for the non-core Canadian business and Reym industrial cleaning business, which it expects to complete over the next 12 months.

Chief executive officer Peter Dilnot said: "We have been working closely with regulators in order to resume full production at ATM and the supply of our cleaned soil into the market. However, yesterday, we received notification from the regulators requesting further analysis of our treated soil ahead of future shipments. As a result, we will limit production until the situation is resolved and this will reduce expected profit for the current financial year.

"More broadly, Renewi's growth is underpinned by increasing demand for recycling services. Our end markets are being stimulated by a clear environmental need, increasing regulation and customer pull."

RBC Capital Markets said: "The latest ATM news we think will be taken poorly by the market, especially given the company had aimed to have the facility return to full production in October. It sounds like this problem will impact a significant part of the next financial year as well.

"Until this issue is resolved, we think Renewi's share price will continue to suffer. The new CEO, Otto de Bont, will now be under pressure when he takes over the reins in April 2019."

At 1115 GMT, the shares were down 10.6% to 49.25p.

Back to ShareCast News

Share Price, Share Chat, Stock Market news at
FREE Member Services
- Setup a personalised Watchlist and Virtual Portfolio.
- Gain access to LIVE real-time Regulatory News (RNS).
- View more Trades, Directors' Deals, and Broker Ratings.
Share Price, Share Chat, Stock Market news at

Datafeed and UK data supplied by NBTrader and Digital Look. While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.