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RNS Number : 2272C
Renewi PLC
28 September 2018
This announcement contains inside information
28 September 2018
Renewi plc
("Renewi", the "Company" or, together with its subsidiaries, the
"Group")
Pre Close Trading Update
Renewi plc (LSE: RWI), the international waste-to-product
business, announces its pre close trading update for the six months
ending 30 September 2018, ahead of its interim results which will
be released on 8 November 2018.
Trading performance
Trading has continued broadly in line with management's
expectations. Our merger integration projects are progressing well
and we remain on track to deliver the committed EUR30m of cost
synergies for the year ending 31 March 2019.
In the Commercial Division, volumes have been slightly up on
last year, with a good first quarter followed by a slower second
quarter compared with the particularly strong summer last year.
Pricing of inbound waste has been strong with price increases
successfully implemented earlier in the year. Recyclate prices have
continued to be relatively stable, albeit at lower levels compared
with prior year; and our dynamic pricing in customer contracts
continues to mitigate the impact. A shortage of capacity for our
residues, including at incinerators for burnable waste, has
increased some disposal costs in the first half. Action is being
taken to address this issue going forward.
The Hazardous Waste and Monostreams Divisions have performed in
line with management expectations, with the exception of two Dutch
glass reprocessing sites which have seen operational challenges and
weak powder markets.
The Municipal Division has performed ahead of expectations in
both UK and Canada. The previously announced profitable sale of our
EBG facility in Cumbernauld and the on schedule exit from the
Dumfries and Galloway PFI operating contract demonstrate ongoing
effective management of the UK portfolio.
Our integration activities remain on track and on budget.
Activities have been focused on merging IT platforms and
operational processes ahead of route optimisation and planned site
rationalisation synergies in the second half.
ATM update
As previously reported, Dutch regulators have temporarily
suspended permits for the use of thermally treated soil. We are
confident our treated soil meets the required specification and
that our operations are amongst the best in the industry. We have
also maintained a strong order book with customers ready to take
our soil product as soon as regulatory approval is restored. Our
constructive discussions with the regulators are ongoing and a
further update will be provided at our interim results.
ATM's prospects are positive given the demand for secondary
products and the Dutch government's objective to increase the use
of recycled construction materials. During the period Renewi has
made good progress with trials of an innovative new soil treatment
process which will create secondary products for cement, concrete
and asphalt production. This new market would open up a potential
new revenue stream during the next financial year and reduce ATM's
reliance on the current outlet types.
Growth drivers
Renewi is positioned as a market leader in the Benelux at a time
when government policy and business strategies are focused on
increasing recycling and the use of secondary materials. For
example, the Dutch government has just announced a 140% increase in
domestic incineration tax from 1 January 2019 in order to promote
and incentivise further recycling activities. The Board is
confident that Renewi remains uniquely well placed to serve these
structural growth markets and to provide profitable solutions to
current and future customers.
Following the successful initial phases of our merger
integration and the implementation of common systems, we are now
assessing the potential for securing additional synergies above the
committed annual EUR40M target in the period post FY20. This
assessment will be in conjunction with identifying areas of Renewi
where additional growth and attractive returns can be delivered. We
also continue to review our portfolio of assets and businesses
actively, with a view to enhancing overall returns and growth, and
an update on this will be provided at the interim results.
Cash and borrowings
Group net debt is in line with management expectations. Working
capital and capital expenditure have been better than planned and
cash flow also benefited from the profitable sale of our EBG joint
venture in August 2018.
Outlook
Assuming ATM resumes full soil production by the end of October
2018, the Board expects Renewi to deliver full year results in line
with its expectations.
For further information:
========================= ==================
FTI Consulting Renewi plc
+44 20 3727 1340 www.renewiplc.com
Richard Mountain
Susanne Yule
========================= ==================
About Renewi plc
Renewi, created in 2017 by the merger of Shanks Group plc and
Van Gansewinkel Groep B.V., is a leading waste-to-product business
ideally positioned to be part of the solution to some of the main
environmental problems facing society today: reducing waste,
avoiding pollution, and preventing the unnecessary use of finite
natural resources.
We are listed on the London Stock Exchange and have over 8,000
employees across nine countries in Europe and North America, we
have deep expertise and an extensive breadth of waste management
products and services.
For us, waste is a state of mind, an opportunity. When we take
away someone's waste, we then give it new life. We transform a wide
range of used materials into useful products and raw materials for
our customers, like recycled paper, metal, plastic and glass,
woodchips, compost, energy, fuel, and other products.
In the process we protect the world from contamination, preserve
finite natural resources, and enable customers to meet their
sustainability goals. With our deep international expertise we also
provide our customers with an extensive product range, combined
with local service and attention.
Above all, our team is committed and passionate about our
mission: waste no more. Renewi operates across five divisions:
-- Netherlands Commercial - Collecting, sorting, treating and
recycling commercial and household waste in the Netherlands
-- Belgium Commercial - Collecting, sorting, treating and
recycling commercial and household waste in Belgium
-- Hazardous Waste - Treating soil, water and packed chemical
waste at our flagship ATM facility and conducting specialist
industrial cleaning in the Netherlands
-- Monostreams - Managing a range of waste streams which focus
on specific end markets such as glass, electronic goods, organics
and minerals in Europe
-- Municipal - Operating long-term waste management contracts
with local authorities in the UK and Canada
For more information, please visit: www.renewiplc.com
Images are available to download at:
www.renewiplc.com/imagelibrary
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END
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