Augean (AUG)

Business description

Augean manages hazardous waste through five divisions: Radioactive Waste Services (3% of group revenues), Energy & Construction (33%), Industry & Infrastructure (30%), Augean Integrated Services (13%) and Augean North Sea Services (21%).

Investment summary

In its recent trading update, AUG revealed that Stewart Davies has resigned as CEO, by mutual consent, and is to be replaced by Jim Meredith, who will become executive chairman. We expect Mr Meredith to focus on finding a resolution to the dispute with HMRC and maximising the cash return from the business. AUG also warned that FY17 and FY18 profits will be below previous expectations, mainly the result of continuing weakness in the soil market. To counter the tough trading, AUG announced additional cost reductions of £1.7m. The cost savings are expected to yield a full-year benefit in FY18. We have updated our forecasts and for now our DPS forecasts remain unchanged, but AUG’s ability to pay will need to be assessed in light of any settlement with HMRC. Our DCF valuation, which does not include the cost of settling with HMRC, remains at 67p/share.

Last updated on 13/12/2017

Y/E Dec Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2015A 61.0 12.5 6.2 5.58 5.0 2.3
2016A 76.0 14.3 7.2 6.47 4.3 2.2
2017E 83.2 11.9 6.0 5.56 5.0 3.6
2018E 84.3 14.4 8.1 6.88 4.1 2.0

Last updated on 08/12/2017

Latest video

Executive Interview - Augean

Industry outlook

A growing trend towards treatment, recovery and recycling in the waste hierarchy supports Augean's specialist industry knowledge model.

Last updated on 13/12/2017

Key management

Dr Stewart Davies, CEO
Mark Fryer, FD

Company address

Unit 4,
Rudgate Court,
LS23 7BF
United Kingdom
+44 (0) 1937 844 980
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