Trading has recovered strongly through the second half of the year and the Group expects, subject to audit, to report adjusted PBT for the year ended 31 December 2020 at least in line with the prior year despite the impact of Covid-19 and the resultant decline in the North Sea business.
Within the North Sea business, despite the second half recovery in revenue, further rationalisations have been made to the cost base to reflect anticipated forward trading conditions. The Group expects to impair the North Sea asset values by approximately £3m within the 2020 results, which will be shown as an exceptional item in the Group’s accounts.
During 2020 and early 2021, the Group has contracted or has secured commitments to contract incremental ash contracts for six Energy from Waste (“EfW”) facilities, four of which are for operational facilities and two for proposed new facilities. The total annualised revenue from these incremental contracts is around £6m.
As part of an ongoing programme of enhancement for its landfill sites capabilities and permits the Group has recently been granted a revised Environmental Permit for its Port Clarence landfill which would have a remaining life past the 2050’s. This permit includes the grant of a Recovery Code (“R Code”) for the construction with specified wastes of a three-dimensional void separation structure. One of the specified waste types includes treated EfW ashes which will allow the Group to offer a new waste recovery option to select current and future EFW customers; thereby increasing the potential number of EfW facilities that the Group could service to whom those operators particularly desire an R Code.
The Group ended the year with net cash, excluding lease liabilities, of £6.4m, having deferred £3.5m of 2020 VAT payments until March 2021. Based on its expected performance the Group should return to dividend payment during 2021.
The Group expects to report Preliminary Results in early March 2021.