PowerHouse Energy Group (PHE); reports ongoing commercialisation of DMG® process

Augean

LN: AUG

£111.3m market cap

107p last close

Augean manages hazardous waste through five divisions: Radioactive Waste Services (3% of group revenues), Energy & Construction (33%), Industry & Infrastructure (30%), Augean Integrated Services (13%) and Augean North Sea Services (21%).

Investment summary

No immediate resolution to the dispute with HMRC over landfill taxes is expected and, in the absence of clarity as to the timing and scale of any potential payments, Augean’s management continues to take firm action to improve the strength of the business (disposals/cost control). The difference in market capitalisation between a share price of 25p and our DCF valuation of c 70p/share equates to c £47m and compares to the total of HMRC assessments received so far of £12m (five assessments).

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2016A 76.0 14.3 7.2 6.47 16.5 8.5
2017A 84.7 12.9 6.0 5.59 19.1 10.5
2018E 79.5 14.0 8.1 6.27 17.1 7.3
2019E 79.2 15.0 8.8 7.07 15.1 7.6
Last updated on 22/05/2019
Industry outlook

A growing trend towards treatment, recovery and recycling in the waste hierarchy supports Augean’s specialist industry knowledge model.

Last updated on 22/05/2019
Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (£m) 1
Forecast gearing ratio (%) 2
Price performance
%
1m
3m
12m
Actual 10.3 27.4 197.2
Relative* 12.3 25.0 220.3
52-week high/low 118.0p/34.0p
*% relative to local index
Key management
Jim Meredith Chairman
Mark Fryer FD