The Norse Group has posted its financial results for the 2019/20 financial year, where it said its revenues and profit margins have been boosted by “improving commodity prices from recycling materials”.
The local authority-owned trading company published its results on 7 August, which outlined its consolidated financial performance for the group as a whole.
Daventry council is among the authorities using Norse for waste collection services
The report states that the group’s overall revenue for 2019/20 was £339 million, up 10.6% the previous year.
Profit before tax for the period was £4.6 million, down from £10.6 million in 2018/19.
Norse is 100% owned by Norfolk county council, and provides a range of services in England and Wales including facilities management, property services and residential care homes and employs more than 10,000 people.
‘Defining year’
A Norse Group spokesman said: “2019/20 was a defining year of progress, with an increase in revenue of £32m from the previous year. This increase, coupled with a strengthening underlying profit margin are strong indicators of the Group’s financial strength, contributing to a post-tax profit of £4.03m.
“Notable developments during the year included improving commodity prices from recycling materials and the addition of two new waste collection services in Medway and East Hampshire.
“In June this year, we added a new refuse collection service in Amber Valley in Derbyshire to our portfolio, meaning we now provide domestic refuse collections for more than a million people in England.
“Notable developments during the year included improving commodity prices from recycling materials and the addition of two new waste collection services”
“We are confident of adding further contracts in this growing area of activity in the year ahead.”
Norse Environmental Services
Norse Environmental Services (NES) is the arm of Norse which covers waste services.This includes refuse and recycling collections, and management of facilities including CA sites and materials recycling facilities.
Revenues for NES increased by 18% (£34 million) to £217 million. This was aided by environmental services contracts won in East Hampshire (see letsrecycle.com story) and Medway, as well as highway maintenance services in Norfolk ( see letsrecycle.com story).
The figures were also boosted by “favourable” commodity prices for recyclable materials, according to the report. This enabled NES to post improved gross margins of 20.1%, up from 17.5% in 2018/19.
The Group said that these gains are shared with many of its client partners in which the partnership structures in which NCS operates.
The company didn’t state the profits for NES individually in 2019/20, but said it targeted a profit of £2.2 million.
Norse Environmental Waste Services (NEWS) – which sells recyclable material on behalf of the seven councils in the Norfolk Waste Partnership – posted a loss of £2.8 million in 2018/19 which was put down to “a significant reduction in revenue gained from the sale of materials” (see letsrecycle.com story).
Covid-19
Norse carries out waste collections for more than a million people, including recently added contracts in East Hampshire
The financial statement said that the group has “performed well” in 2019/20 however Covid-19 has “significantly” impacted expectations for 2020/1.
It added that the expectation is that the nature of the business limits the potential impact, however in the short term it will impact negatively on trading.
Following this, the group expects results for 2020/21 to be below that reported for the 2019/20 financial year.
The group have additionally claimed furlough in order to receive funding, which it says has “enabled it to mitigate some of the impact”.
However, overall the group says directors are “confident that performance in the medium term will return to previous levels, with further growth opportunity expected to present themselves.”
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Source: letsrecycle.com Waste Managment
