(Adds details, analyst downgrade, share movement)
July 21 British waste manager Shanks Group Plc
said first-half results would be hurt by a strengthening
pound and further weakness at its solid waste business in
Belgium, the Netherlands and Luxembourg.
Shares in the company fell as much as 5 percent in early
trade on Monday, making the stock one of the top percentage
losers on the London Stock Exchange.
Solid waste, particularly in the Netherlands, was under
increased margin pressure due to a further reduction in the
volume and prices of key recyclates, as well as aggressive
market pricing, Shanks said.
The company, one of the largest solid waste managers in the
Netherlands, has been struggling to overcome the effects of a
long-running slump in the Dutch construction market.
Shanks said it expected full-year results broadly in line
with expectations if the solid waste market did not weaken
further in the three countries.
Investec analyst John Lawson downgraded Shanks' stock to
"hold" from "add", blaming the potential hit from the strong
pound and competitive pressures for solid waste managers in
these countries, mainly from market leader Van Gansewinkel.
Lawson also lowered his full-year pretax profit estimate for
Shanks by 10 percent to 27 million pounds ($46.1 million).
Chief Executive Peter Dilnot told Reuters in May that he
expected profit for the current financial year to be flat,
mainly due to weakness in Shanks' solid waste business in
Belgium and the Netherlands.
($1 = 0.5854 British pounds)
(Reporting by Richa Naidu in Bangalore; Editing by Gopakumar