Recycling and waste management business Shanks has issued a profit warning in its pre-close trading update for the six months ending 30 September 2012.
The company has said that its UK and Dutch solid waste business have been hit by the recession, record lows in construction output as well as falling recyclate prices, lower volumes of material and increased price competition over the summer, have put pressure on its margins.
As a result, it expects profits to be slightly below the range of current expectations for the year to 31 March 2013.
This is despite good performance from its organics, hazardous waste and UK municipal businesses.
Shanks Group chief executive Peter Dilnot said: “While market conditions in solid waste remain very challenging, our organics, hazardous waste and UK municipal businesses are performing well and we are continuing to invest for future growth.
“Our cost reduction plans are progressing well and, with the new organisation in place, the group remains firmly in track to deliver profitable growth in the medium term.”
Interim results for the period up to 30 September 2012, will be announced on 8 November 2012.