Waste Recycling's accounting change produces £4.9m loss

Waste Recycling Group, Britain's largest processor of waste, saw its shares slump 18 per cent yesterday after it announced it had adopted a more cautious accounting policy which created £4.9m of losses in the six months to 30 June.

The company said £3.5m of the write-off was due to ongoing delays in rolling out its compost business, which separates organic waste from domestic rubbish and sells it on to corporate customers.

Hugh Etheridge, the finance director of WRG, said the delay made it "prudent" to write off costs against developing the business. Its shares closed down 60.5p to 272.5p.

Mr Etheridge said: "In this era of much more conservative accounting and more rigorous tests about what assets are on the balance sheet, we thought it was more prudent to make a provision against this now."

The company said the delays were mainly due to government concerns about recycling animal products after the foot-and-mouth epidemic last year. Mr Etheridge predicted the company would not be able to scale up its compost business for two years, but added that developing a compost business continued to be a core part of Waste Recycling's strategy.

WRG, which operates more than 100 sites including 62 landfills, wrote off a further £1.4m of costs relating to planning and developing landfill sites because increased Government regulation has extended the amount of time it takes to receive planning permission to as much as five years.

The total exceptional costs of £4.9m dragged profits down by 51 per cent to £4.9m in the first half. Stripping out tax, goodwill and exceptionals, WRG saw underlying profit rise 7 per cent to £21.7m.

Nigel Sandy, the chief executive, said the group experienced a "distinct slowing" in June, which he attributed in part to the World Cup. He added business had picked up in July, leading to a position of "cautious optimism" about the prospects for the economy in the next few months.

The company, whose last chairman, Pat Barrett, left after only three months in the job, announced it has appointed James Newman, a non-executive director, to the position of non-executive chairman.

Despite problems caused by regulatory delays, WRG is set to benefit from the tightening up in rules governing the disposal of rubbish such as used fridges. Waste Recycling said it expected to dispose of 170,000 fridges this year because it has the right technology to comply with new European laws by removing potentially dangerous gases before burying the fridges in landfill sites.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Recruitment Resourcer

£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn