Profits down by 10% at Attwoods
The result, which was slightly below market expectations, reflected a sharp downturn at the group's North American operations, where profits before interest slumped from more than dollars 58m ( pounds 35m) to about dollars 44m despite a 12 per cent jump in underlying sales to dollars 305m.
Earnings per share slipped from 12.4p to 8.06p but the the total dividend has been maintained at 5p.
The profits fall was blamed on Mindis, the metal recycling arm, which was hit by weak metal prices. Although Mindis's sales were virtually unchanged at dollars 123m, its trading profits collapsed from dollars 16m to dollars 2.5m. However, the company believes that Mindis's performance is unlikely to deteriorate further.
Attwoods, which is 30 per cent controlled by Laidlaw, the Canadian waste group, said its North American results masked significant regional variations. Whereas the profits from the mid-eastern US states were hit by the recession, Florida boosted its contribution significantly. Since the year- end it has received new contracts to clear up damage caused by Hurricane Andrew.
Profits from Adco, the group's continental European arm, boosted its profits by almost half to DM25m ( pounds 10.25m) thanks to strong growth in Germany and Holland and expansion in Belgium and Czechoslovakia.
In Britain, profits rose from pounds 3.1m to pounds 4.7m on turnover up from pounds 44m to pounds 51m. However, the company warned that last year's growth may not be matched this year unless the UK economy stages a recovery.
The group has taken a pounds 6.2m extraordinary charge against the potential impact of a federal government inquiry into alleged overcharging by its managers in some east coast states several years ago.
The company informed shareholders of the inquiry last year, but Ken Foreman, Attwoods' chairman, said yesterday: 'The problems relating to this investigation have proved more difficult to resolve than we originally envisaged. Whilst the investigation continues, the company has taken the prudent decision to make refunds to those customers affected since 1981.'
The group incurred total capital expenditure of pounds 68m last year, almost half the previous year's total. Thanks to an pounds 80m rights issue last December, net debts as a proportion of shareholders' funds have fallen from almost 92 per cent to 36 per cent.
But the rights issue nearly flopped, triggering a slide in the share price. In the past six months it has slumped from around 175p to 104p, down 9p yesterday.
City analysts are looking for about pounds 40m in taxable profits this year. Attwoods recently won a 10- year waste collection contract in the Dominican Republic.
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