Shanks’ UK losses piling up after recycling squeeze

A market squeeze on the cost of recycling binbag rubbish took the shine off robust results for Renewi, the waste management firm formerly known as Shanks.

The 130-year-old company, which merged with Dutch firm VGG last year, made a worse-than-expected loss of £4.2 million in the UK business, sending the shares down 7.7%, or 7.9p, to 95.1p.

The company, which makes 80% of its sales in Benelux, saw total revenues rise 15% to £779.2 million and underlying pre-tax profit up 7% to £25.7 million.

Renewi recycles rubbish collected from UK councils into fuels and products like glass and paper.

The costs of some recycled fuel contracts have doubled over the past year to 80 a tonne from 40 due to tougher markets.

A squeeze on UK council budgets has also hurt. “It was extremely difficult,” said chief executive Peter Dilnot.