| Electronic Client Newsletter – September 2008 | |
| Is your waste a liability? EnviroServ Waste Management will take the worry out of waste management. We will assess your various waste streams, classify them according to the appropriate legislation for safe handling, transportation and disposal, explore alternatives to landfill, investigate options to beneficiate your waste, recycle, re-use and ultimately reduce the time, effort and money you spend on waste management. |
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EnviroServ Year End Results Announcement The Group posted revenue growth of 33% higher than last year, and increased operating profit by 23%. Operating margin decreased to 14.6% from 15.7% the year before. Diluted headline earnings per share were up 17% to 99.3 cents (2007: 84,9 cents). EnviroServ’s strong revenue growth reflects the increasing demand for EnviroServ’s waste management services during the year. This demand was driven by an increase in waste volumes generated by the major industries which produce industrial waste, intensified focus from authorities in reducing legacy waste stockpiles and ongoing commitment by blue chip companies to improve the management of their waste and to reduce their overall carbon footprint. Profit margins reduced as a result of losses incurred in the rationalization of Millennium Waste Management and in the start up of a new acquisition EnviroServ Polymer Solutions, high fuel prices and increasing inflationary cost push factors. However the impact on the margin of these negative factors was tempered by the increased volumes. EnviroServ continues to prioritise the search for alternative ways to treat and re-use waste. A number of pilot studies are underway in diverse waste streams such as waste plastic beneficiation, metal recovery and organic composting and fertilizers. The benefits of these initiatives should start to emerge in the coming year. Two acquisitions were made at the start of the year. Both contributed to increasing the range of service offered from the group. EnviroServ Polymer Solutions which was acquired in August 2007 is still in its start-up phase and has yet to record a profit. Growth prospects for this business are exciting underpinned by the production of pallets from waste plastic. In January 2008 the group acquired the Brollo group of companies, which has now been incorporated under EnviroServ Tailings. Specialising in the construction and management of tailings dams for mines, EnviroServ Tailings has added another important service offering to EnviroServ’s client base and has unlocked some synergies within the group as the Treatment and Disposal division has regular requirements for the construction of containment dams. The tailings business has contributed R32 million to the group’s revenue and added R3 million to operating profit. The group’s compaction plant hire division, which includes Conquip and Burma Plant Hire, continued to produce solid growth in revenue and profits. Revenue increased 86% whilst operating profit grew by 133%. The announcement of these results is significant in that these will probably be the last set of results reported as a JSE listed company. On 4 August 2008 Parchment Trading 72 (Pty) Ltd, an ABSA private equity owned company, proposed a scheme of arrangement between EnviroServ and its shareholders which, if implemented, would result in the company delisting from the JSE on or about 27 October 2008. On behalf of the Board of Directors, our sincere thanks for your continued support. We wish you all the same great success. |
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