(Alliance News) - Renewi PLC on Tuesday said quarterly trading reflected the current "challenging" environment, and it expects full-year results to fall below market expectations.
Shares in the company were down 4.5% at 599.00 pence on Tuesday morning in London.
Milton Keynes, England-based Renewi turns waste into recycled products. It operates in a number of divisions.
Volumes at Commercial Waste Netherlands in the third quarter to December 31 continued to be subdued, especially in the Construction & Demolition segment, Renewi said. This reflected "wider weakness in regional construction activity".
Coolrec also delivered a "lower performance" thanks to decreased plastic prices, while UK Municipal put in a performance that was more "solid" and "stable" and Specialties traded in line with expectations.
Renewi also said positive momentum continued during the quarter for its Mineralz & Water business, while Malthan delivered a continued strong performance. Renewi said the margin impact of lower volumes has been partially mitigated due to an organisational rationalisation within the Simplify programme.
Overall, Renewi said that its quarterly performance "reflected a continuation of the challenging economic backdrop in several key markets", although its strategic initiatives have helped improve trading and reduce costs. It expects this to continue throughout the rest of financial 2024, resulting in stronger results for the second half compared with the first.
Renewi nonetheless expects its full-year earnings to be below market expectations. However, it "remains confident" that it can meet its medium-term targets thanks to "compelling" long-term structural drivers in its end markets.
In early October, Renewi said it was aiming for medium-term organic revenue growth of more than 5% annually; a high single digit Ebit margin; free cash flow generation of at least 40% of earnings before interest, tax, depreciation and amortisation; and return on capital employed of over 15%.
By Emma Curzon, Alliance News reporter
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Renewi Plc (RWI)