Reorganisation leaves Caird pounds 26m in the red

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The Independent Online
A FUNDAMENTAL reorganisation took Caird, the waste management group, pounds 26.5m into the red in 1993, with exceptional costs reaching pounds 23m, writes Diane Coyle. This compared with pre-tax profits of pounds 3.4m the previous year.

The group made an operating loss of pounds 1.4m, after profits of pounds 4.8m in 1992. Turnover fell from pounds 21m to pounds 18m, with one landfill site out of commission until the summer, and a number of smaller sites closed.

John Ashton, chairman, said: 'It would be wrong to give the impression that the group has revived to strong and profitable trading. It has not.' However, the provisions were taken by the interim stage, and earnings had stabilised since then.

The company said trading conditions were improving, with prices for waste disposal firming in 1994. The implementation of remaining provisions of the Environmental Protection Act on 1 May would help to achieve increases in landfill prices, much lower in Britain than on the Continent.

The landfill division, which lost pounds 700,000 compared with a profit of pounds 5.7m in 1992, would also be helped by the re-opening of the group's site at Astbury Quarry in Clwyd, one of five principal sites, this summer.

The special waste division, handling hazardous chemicals, saw revenues increase from pounds 8.8m to pounds 9.9m in 1993, but operating profits remained almost flat at pounds 1.5m due to strong competition.

Caird said it had maintained its market share. The technical division, making incinerating equipment, doubled operating profits to pounds 200,000 despite a small fall in turnover to pounds 1.2m.

Caird said an early resumption of dividend payments was unlikely. It had discussed capital restructuring with its advisers, but no refinancing would occur until it had returned to profitability.

Philip Morrish, an analyst at Smith New Court, said: 'The cleaning-out was over by October, and recovery should be reasonable but slow.'

Recovery prospects took the shares up 3 4 p to 8p.