WMI eyes Tarmac waste business

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The Independent Online
WASTE Management International is looking to buy Tarmac's landfill waste business, Econowaste, and is in discussions over at least two more acquisitions in Britain. It expects to spend about pounds 200m this year on purchases worldwide.

WMI's chief executive, Ed Falkman, said: 'We're looking at it (Econowaste).' The severe decline in the UK economy was creating opportunities, he said, as companies like Tarmac offered non-core businesses for sale.

Econowaste has considerable unused landfill capacity, often expanded by Tarmac's separate quarrying operations. It also has a 50/50 joint venture with the French company Generale des Eaux, operating waste transport stations in Scotland.

Tarmac, advised by Morgan Grenfell, is trying to raise about pounds 200m by the end of the year from asset disposals to pay off debt.

WMI, which was floated on the London stock market in April with a valuation of pounds 2.2bn, reported a 51 per cent increase in profits before tax to pounds 62.6m in the six months to 30 June.

The fast-growing company offers a range of management services handling solid and hazardous waste in Europe, Asia and Latin America.

Turnover was up 30 per cent to pounds 382m. Of this, organic growth contributed 18 per cent and acquisitions the other 12 per cent, according to Mr Falkman.

He said demand had slowed in Europe but was still strong in Asia.

WMI, which is 80 per cent-controlled by US-based Waste Management Inc, is also quoted on the New York stock exchange and therefore publishes quarterly results. Second-quarter pre-tax profits rose 56 per cent to pounds 19.9m.

The results were issued shortly before the London stock market closed yesterday. The shares rose 7p to 572p, still 13p below the April placing price.

As expected, there was no dividend. WMI prefers to reinvest profits.

Philip Morrish, an analyst with Smith New Court, described the figures as satisfactory, but said he might have to trim back slightly his full-year forecast of pounds 150m.

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