Augean Share Discussion Threads

[nw99] 18/1/2012 15:00

Good news out on the course case. Stock not moving tho.

[morton2011] 05/1/2012 09:00

Looks like the chairman had the inside track that LLW had been taken in as per todays RNS. RNS not a surprise as it has been well flagged they were going to start taking small consignments.

The RNS today does not say any contracts in place of any size which is noteworthy given they have had years to plan for the start - even a contract being agreed conditional to no legal challenges would have been more positive.

Mr McDowell has taken a lot more out of Augean over the years in directors and other fees than he has invested in equity. He has also bought in at much higher prices in the past. So it is a good sign he bought the shares but not a screaming buy as I read it.

[cerrito] 20/12/2011 09:38

I am a shareholder in another company where McDowell is Chairman-AVG where he bought shares in October and judged well the bottom of the market for them.

[morro] 20/12/2011 08:55

One hundred thousand pound share purchase by a non-exec. Now that is a fair old whack, showing confidence its undervalued.

[lbo] 13/12/2011 15:13

And Utilico have been buying it and have increase their holding from 14 to 18%



Our objective is to maximise shareholder returns by identifying and investing in investments where the underlying value is not reflected in the market price

[lbo] 13/12/2011 15:08

GPG have been forced sellers in a lot of shares! They are winding up.

Guinness Peat to trim portfolio, return cash



The market gave a warm reception to investment group Guinness Peat's (GPG) plans to sell off assets and return cash to shareholders.The company, which is focused on companies in New Zealand, Australia and Britain, says its portfolio may be may be "reduced to the point where an investment in GPG becomes a pure exposure to Coats," the textile group it bought in 2003.Guinness Peat, whose other investments include stakes in Newbury Racecourse and the brewers Fuller, Smith & Turner, Shepherd Neame and Young's, said it plans to return at least £75m to shareholders in the current calendar year."We believe that the strategy announced today provides a clear path for the optimisation of value for all shareholders," said GPG's chairman Mark Johnson.

[morton2011] 09/12/2011 16:18

There is quite a strong NZ connection to Utilico who have increased their stake considerably in Augean. The enigmatic Aussie behind Utilico used to work for GPG. So it may not have been quite as forced as it might appear.

Utilico are also invested into Jersey Electricity but not the others mentioned by LBO as far as I am aware.

Seems the locals are still revolting close to Augean's prized asset at Kingslciff - 2 dec 2012 "Six arrested at King's Cliffe nuclear waste protest"

[lbo] 07/12/2011 21:02

This was back in May and assuming no LLW value



At first glace, the shares look expensive currently, trading on a forward PER of 28.3x, but margins are currently depressed. If we took 2011E revenue of £37.9m and applied an average operating margin of 9.9%, applied forecast
interest and taxed it at 28%, we arrive at an EPS figure of 2.3p. Applying a mid-cycle PER of 12x implies a value per share of 27.7p, compared to the current price of 28.3p. The year end NTAV is forecast to be 23.9p and the NAV 45p.



With Augean's interims showing progress, despite the competitive market place, and with strategic opportunities drawing near, we feel that the next six to 12 months will be a key tipping point for the group. In addition, with a proposed group restructuring to create distributable reserves and an operational reorganisation to improve efficiency, we believe Augean is preparing the way to deliver substantial shareholder value. In our view, the valuation suggests this is based on the core business alone, with the LLW potential effectively remaining an option at these levels.



A report by Edison Investment Research in March 2010 suggested that if Augean was to accept its full quota of radioactive waste, its profit from the King's Cliffe site would be in excess of £100 million per year. With an extension of ten years Augean could make £1 billion in profits over the next 10 years.

"Based on Augean's initial predicted volumes of 2,500t, we
believe that this could potentially add c £1.2m of sales and c £1m profit to 2011 numbers,effectively doubling our current forecast. Given that the group is seeking permission to handle 250,000t/pa, this waste stream could add significant future profits"

[morton2011] 05/11/2011 17:34

Cerrito 5 Nov post

Augean have flagged in recent reports that there are big changes in the LFT regime for contaminated soils in April 2012 which will have the effect of making landfill much more expensive from April 2012. There is likely to be quite a few large contracts which end up in landfill before then. This will benefit Shanks and Augean. Far less clear what happens after April 2012 for both of them but does not look good for Augean.

Good news for Augean is they should be taking in LLW by then which should offset the loss of business from their only really profitable business (LandFill).

Locals apparently gearing up for another appeal " "This is not the end of the road for us." -
as detailed in article there is still the problem that the planning permission for the site runs out in 2013 and campaigners may focus on that

Still very unclear if all this makes the business worth £ 30 million as current share price

[cerrito] 05/11/2011 15:34

Good to see increase with news of High Court dismissal but I would have been flabbergasted with any other outcome
Interested to see the following in Shanks' interims this week referring to their UK business but also interesting to see in last six months to Sept 11 revenue was £7m compared to £8m a year before-ie broadly the same amount of revenue as AUG in AUG's treatment division..

quote
Hazardous Waste activities have continued to benefit from a number of good contracts in the contaminated land services business in the first half.

[cerrito] 30/9/2011 10:20

Looking at the Chairman's statement of Mercury RecyclingIin which luckily for me I have never invested) this morning reminds me very much of the position that AUG was in some years back...business highly dependant on the way that regulations came out from Brussels and are then goldplated in the UK.

[morton2011] 29/9/2011 10:18

In the hazwaste market Tradebe are now the biggest company certainly in terms of their service offerings outside landfill. Edison completely missed this.

They bought the Fawley incinerator last year, Britcare in January and then the SRM business this year and handle more tonnes than Augean. Their plants are much more complex and sophisticated than anything Augean operates. Simple can be best of course and the underlying LTV of Augean's landfills which are very simple and easy to operate is one of its strengths.

SRM business alone is bigger than Augean - see page 2 of attached from Tradebe to see their 'Growth through prudent acquisition'


Cerrito - WRG is far more of a non haz operator than Augean so not comparable.

Dividends will only be significant if Augean can reduce its Capex - £ 4 million for a business which is going to be break even / make £ 1 million this year is too high and a cynic may wonder if they are capitalising operational expenses as not clear what else they are spending the money on.

Another comparable quoted company Shanks (SKS) has much lower capex / revenue. It had a policy in 2009 of limiting CAPEX to 50% of its depreciation charge. If Augean can match that then dividends may be realistic.

[cerrito] 28/9/2011 16:32

I thought the Edison report rather good if somewhat optimistic to talk about dividends.
Interesting that they mention Waste Recycling Group as a competitor; this is now owned by the Spanish Company FCC. I read their latest interims but they were rather skimpy and had no info on WRG.

[cerrito] 27/9/2011 23:49

I guess there was enough use of the words soft and competitive in the interims to explain the weakness today.
I note that they expect to make market expectations which is for a whole year profit of £1m pretax if my understanding of Digital look is correct; given that they only made 0.1£m in the first half not clear where they are going to get so much more profit in the second half.
Good to see further reduction of debt and a low gearing and they are comfortably within their banking covenants. Cash flow in first half OK but not much more than OK. Had forgotten that they have a negative current ratio..not sure which of their suppliers finances them.
They are doing –for me-all the right things but seems a big slog.
Not adding or subtracting from my position for now.

[lbo] 08/9/2011 15:04

Our objective is to maximise shareholder returns by identifying and investing in investments where the underlying value is not reflected in the market price

[morro] 25/8/2011 10:36

Utilico continuing to build their stake up. Obviously they see the company as heavily under valued.

[lbo] 20/7/2011 10:28

DCC Enviornmental trading well also

[lbo] 19/7/2011 15:44

One51 results show it's the Waste part of the business that is performing well and this is the part they were looking to list via Augean





ClearCircle Environmental, where underlying profitability increased due to a recovery in volumes and higher commodity prices

[lbo] 19/7/2011 12:12

Kings Cliffe: Radioactive waste deliveries start this year



Therefore on the assumption that Augean handled 2,500 tonnes in 2011E, the operating profit would stand at £470/t, or £1.2m in the remainder of the year. If Augean handled 5,000 throughout 2012E, which would be a full year, the contribution would be £2.3m on these assumptions. Therefore, on these assumptions, each 1,000 tonnes could add close to £0.5m to forecasts. Considering the low margins currently forecast, a positive appeal and the signing of a commercial contract could have a material impact on forecasts

[lfc4ever] 07/7/2011 09:18

this could be a buying opportunity here.