Shanks Group says interim trading in line with expectations

LONDON (ShareCast) - (ShareCast News) - Waste-to-product business Shanks Group (Other OTC: SHMCF - news) said trading in the six months to the end of September has been in line with expectations. In a pre-close trading update released on Monday, the London-listed group said in the half-year to 30 September market conditions in the Netherlands continued to show encouraging signs of improvement.

Higher recyclate income, firmer prices in the commercial segment and a modest recovery in construction boosted the company's performances in the region, Shanks said.

However, ongoing weakness in local offtake markets continued to weigh on the group's performances in Belgium, while the hazardous business was negatively affected by low oil prices, which led to a reduction in industrial cleaning activity.

Meanwhile, the soil market division performed in line with expectations and the municipal business made good progress in the period, entering full service on the new Barnsley, Doncaster & Rotherham contract in July.

The group warned that second half profit will be affected by the bankruptcy of a major supplier for its Wakefield project, which has mean the project will get underway four months later than planned.

Shanks estimates the cost of the delay to be approximately £5m and indicated it will be considered as an exceptional item in its second half results, adding its overall expectations for the year to 31 March remain unchanged.

Shanks shares were up 0.76% to 91.19p at 0901 BST on Monday.