Member Article

International scrap group investing in future despite halved profits

Warrington-based scrap metal firm European Metal Recycling has reported that its profits were cut by half in 2012.

The company blamed the Eurozone crisis and US debt issues, which severely affected the market for its products.

EMR, which operates from 150 sites world-wide and employs more than 4,000 staff, reported sales in 2012 of £3.2bn – up 5% from £3bn in 2011.

Accounts reveal that continuing global economic uncertainty reduced pre-tax profits halved from £116m to £57m.

The directors’ report said: “2012 proved to be a difficult year for the metal recycling industry with a combination of global economic factors and sector specific issues coming together to adversely impact group performance.”

The report stated that: “At a macro-economic level, both demand and pricing sentiment were weighed down by a succession of events including the potential contagion of the Eurozone crisis, the potential change in leadership in the USA, the actual change of leadership in China and the US ‘fiscal cliff’.

“Despite these significant headwinds, group performance has been strong relative to the market at large” and “global steel production still managed to generate a small increase.

It added: “Once again the engine of this growth was China, which saw a year-on-year production increase of 3.7%, offsetting production contraction in other established markets.”

The report said EMR’s EBITDA (earnings before interest, tax, depreciation and amortisation) profit figure stood at £155m for 2012 – down from £208m in 2011, but still at a level “comparable to that recorded before the global financial crisis”.

The group is seeking to operate more efficiently, with overhead costs almost £20m lower than in 2010.

The report also highlighted a “significant investment” EMR has made to allow its joint venture business, Innovative Environmental Solutions (IES), to develop a £100m power-from-waste plant in Oldbury, West Midlands.

It concludes that: “The directors believe that the group’s existing businesses are well positioned for future growth.”

Sirius House, the firm’s head office in Warrington, is also the base for EMR’s IT and Accounting apprentices who currently split their time between work and local colleges.

The company has already linked up with Warrington Collegiate to recruit two new IT apprentices and have now signed up to support the new Future Tech Studio School.

Angela Jones, Group HR Manager at EMR, said “We are focused on securing our managers of the future and are hopeful that linking up with the Future Tech Studio with give us access to a strong pool of potential resources that has not previously been available to us and we are excited to be offering work experience and apprenticeship opportunities through this route.”

Staff from EMR were on hand at the recent launch event for the FutureTechStudioSchool to meet prospective students and their parents to explain how the company will offer work placements and real life projects for students to work on.

Angela Jones said afterwards: “We were really impressed with the calibre of young people who attended to the event and can’t wait to work with them when the school opens next year.”

This was posted in Bdaily's Members' News section by Simon Malia .