Legal costs hurt Attwoods results: Waste management group maintains payout

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The Independent Online
LEGAL COSTS and the absence of last year's foreign exchange gains sent profit plummeting at Attwoods, the waste management group, in the six months to the end of January.

The group made pounds 8.97m before tax, against pounds 19.3m in the same period previously. Ken Foreman, chief executive, said the scale of the decline was exaggerated by a pounds 2.7m exceptional charge to cover the costs of settling litigation in the US. Attwoods had also made pounds 5.1m from exchange rate movements in 1992/93.

But underlying profits were still lower, despite a 9 per cent rise in turnover to pounds 178.5m. The group made pounds 11.7m, excluding the exceptional charge and the exchange gains, against pounds 14.3m.

The legal costs arose from a case against Eastern Waste Industries, an Attwoods subsidiary, for over- billing. Attwoods settled at the beginning of this year.

Lord Lane, who became chairman recently when it was decided to split Mr Foreman's joint roles, said although the results were bedevilled by abnormal items, the company faced the future with considerable confidence and enthusiasm.

The outlook was brightening, but real growth was unlikely to come through until next year, although the second half of this year would be better than the first.

The group's fortunes have begun to recover in the UK, where operating profits were 39 per cent higher at pounds 2m on turnover that rose 17 per cent to pounds 30.4m. Mr Foreman reported increasing demand for quarry products and landfill sites and predicted price rises when part two of the Environmental Protection Act comes into force in May.

Philip Morrish, analyst at Smith New Court, described the results as poor, but said the market had already discounted them, marking the share price down 30p last week. The shares dropped a further 4p to close at 130p.

The interim dividend is maintained at 1.75p.