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Waste firm Shanks sees Olympic clean-up boost(Reuters)Updated: 2006-11-09 10:48 British waste management company Shanks Group Plc reported a 13 percent rise in first-half profit on Wednesday and highlighted opportunities from new environmental legislation and the 2012 Olympic games. Chief Executive Mike Averill said the 2012 Olympic games in east London would create extra business for companies like Shanks that can clean contaminated ground prior to construction. "The proposed sites for the Olympic games are many and varied, and many of them are contaminated with a whole raft of possible pollutants," Averill said. "There's lots of tars from old gas works. If it was metal working, there could be heavy metals in the ground." Profit from continuing operations before exceptional items and tax rose to 19.7 million pounds ($37.5 million) in the six months ended in September from 17.5 million a year earlier. "The results are bang in line with forecasts," analyst Nick Spoliar at Bridgewell Securities said. "But they don't give that little bit extra to make the shares run ahead." Averill said legislation to curb disposal of waste in landfill sites could boost customers for Shanks' Mechanical Biological Treatment, which turns waste into fuel and is already used in a plant in east London. "I've got quite a grin on my face," said Averill. "Our estimates say some 6 million tonnes of annual waste is going to be tendered by various local authorities in the coming five years, with a fair slug of it being tendered in 2007." Each year the east London plant converts about 500,000 tonnes of waste from London's rubbish bins and municipal rubbish dumps into 180,000 tonnes of fuel, which contains about 80 percent of the energy of coal. Shanks said it was pleased with its recent Dutch acquisition of Smink Beheer and continued to search for similar opportunities. "There are a number of companies that we're looking at," Averill told Reuters. "They're not necessarily new geographies. They could be smaller businesses in the heartland," he added. Shanks said trading in the Benelux area was robust and would remain so for the rest of the year. The flow of British contracts was slow in the first half, but has recently picked up. The interim dividend was maintained at 1.9 pence a share. Shanks shares were down 1.5 percent at 194-1/4 pence by 0825 GMT, valuing the group at around 456 million pounds. |
