Waste to product firm Renewi (LON: RWI) has given a boost to shareholders on Monday after announcing, in a trading update for the six months ended 30 September, that performance and outlook are “materially ahead of the board's expectations.”
The London-listed company said it has performed well in the first six months of the year, with increased volumes, improved recyclate prices and ongoing cost management supporting better than anticipated trading.Â
Revenues on a like-for-like basis in the first five months have been over 10% above the Covid-affected prior year and 7% ahead of the pre-Covid year ended 31 March 2020.
Renewi's commercial division has performed well, with core volumes in Belgium increasing 15% in the five months to the end of August. In the Netherlands, core volumes increased by 2% in the same period.Â
The company has seen a reduction in bulky waste as it previously forecasted, with recyclate prices remaining at high levels throughout H1 in most major product categories, resulting in an increase in operating margin.Â
“As these prices are expected to moderate in the future, the division will continue to generate attractive returns, benefiting from dynamic contract pricing and the structural improvements to the cost base over the last 18 months,” Renewi said in its statement.Â
Its Mineralz & Water division experienced a mixed first half, with its waterside business softer than expected. Meanwhile, the company's Specialities Division performed well in H1, with a positive performance by Coolrec.
Renewi is making good progress with its three strategic growth initiatives: its innovation pipeline, the recovery of earnings, and the Renewi 2.0 programme.
As a result of its H1 performance and positive trading outlook, Renewi has materially increased its expectations for the full year ending 31 March 2022. Â
They are looking at an increase in recycling, the sustainability agenda, and the potential for a “green recovery” supported by governments as potential options for further opportunities.Â
Investors have been buoyed by the news, with Renewi shares trading at 648p, up 8.3% from Friday's close.
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