Shanks forced to issue a profit warning as key markets slow

SHARES in waste management firm Shanks Group sank more than 12 per cent to close down at 79p yesterday, after it issued a profit warning.

Shanks said that its UK and Dutch solid waste markets had “deteriorated significantly”, prompting the board to warn that full-year profit would miss analysts’ expectations.

The solid waste business, which deals with commercial, industrial and construction waste, has been hit by the Eurozone crisis and the slump in construction output.

“Falling recyclate prices, lower volumes and increased price competition during the summer have put pressure on margins,” the FTSE 250-listed company said in a statement.

Chief executive Peter Dilnot said yesterday that while conditions in solid waste remain “challenging”, other parts of the business were performing well. “Our cost reduction plans are progressing well and, with the new organisation in place, the group remains firmly on track to deliver profitable growth in the medium term.”