Augean Plc

[Simon Gordon]

http://www.augeanplc.com

Ticker:AUG

Floated on AIM last year as a cash shell.

Headed by David Williams who was Chairman of Waste Recycling.

John Huntington is the CEO and is ex-WRG.

They bought two Hazardous Waste landfill sites by raising 106m with a share placing.

Recently had a profit warning due to lower demand and monocell delays.

Forecast for 12/05 is PBT - 8m.

Forecast for 12/06 PBT - 16m.

They have the ability to gear the balance sheet by 40m to further consolidate the HW market, as the big players focus on the PFI domestic waste market.

They are in the AIM 100 but the spread is very wide and the share illiquid. They plan to fix this.

They want to join the Main Board and eventually join the FTSE250.

On the ADVFN thread you will find plenty of news links.

 

[Simon Gordon]

I met the CEO on Friday and this is the main information gleaned from the meeting:

- Estimating department working flat-out.

- May open own labarotary to test waste samples sent with estimates. Bottleneck at lab. now used because of the sharply increased volume.

- Profit warning principally due to monocells.

- Focus now on pre-treatment - high margins. Integrated with HW landfill they will be a one stop destination in the HW disposal chain. They have the 'key' landfill assets!!!!

- Aim to join Main Board before end 2006.

After meeting the CEO and FD I think these guys are no nonsense entrepreneurs who are aiming to create wealth in a niche market that has very strong pricing power and excellent operational gearing.

 

[Simon Gordon]

Link to the ENDS Report which has a July special on HW. You can subscribe for a free 28 day trial and access tons of info. on the UK HW scene:

http://www.endsreport.com/index.cfm

 

[Simon Gordon]

Sold my shares as it is probable they will issue another profit warning in December - they are not getting enough Construction Waste as producers are still storing waste.

 

[Hook Shot]

Simon, checked RNS like the company and noted smart investor interest - worth a dabble seems green is in!