Viridor, the waste business owned by Pennon, has seen their figures plunge thanks to sharp drop in prices for recycled materials. This is bad news for the company who have long viewed Viridor as their main area for growth. Pennon are one of the largest recycling companies in the UK and have around 20 plants, but have been hit badly by the fall in prices for recovered material and waste paper, known as recyclate.
In 2011, Viridor made up £761m of the group’s total revenue of £1.24bn. Pennon have released a statement updating the market of their progress since March, and have said that Viridor has not been immune to the increasingly difficult conditions in the world’s economy, and trading has dropped well below the high level they enjoyed in the first half of 2011, and the prices of recyclate are still under pressure.
Shares in the group fell by 2% following the news, but made up some ground before closing at 7441/2p, down 5p. Colin Drummond. The chief executive of Viridor, stressed how important recycling was to the company, despite the current problems. He also said that recycling was still a highly profitable business, and remained 3 times more profitable than landfill.
Viridor, who were previously specialists in waste disposal using landfills, said they were continuing their investment in both recycling and other types of waste disposal, and are starting the construction work on a Welsh plant near Cardiff that is set to generate energy through burning 350,000 tonnes of waste every year. It has also signed a 25 year contract with Glasgow City Council for recycling and waste treatment.
July saw Viridor purchase JWT, the waste and recycling and waste business based in Manchester, which seems to be a clear indication of their commitment to the recycling and waste disposal industry.