The RNS re Colt is unbelievable! Let me get this straight, Augean buy a company c2 years ago and now they are entering into a discussion period to discontinue the business! Who did the due diligence on that? Surely heads need to roll for this. HMRC is going to take this business down!
angel - it's difficult to assess what goes on in HMRC's thinking - they have been wrong many times in the past.
The fact that they have issued an assessment for £37M for 2013-17 may have incorporated a similar reduction from the £12M to £7.5M from previous issued assessments. (that's a reduction of some 37.5% on that last bill)
So perhaps HMRC were considering a higher bill of not £37M but £59M before they had their collective brain-fart and revised down the earlier demand.
It all looks very shady and government should not allow the HMRC to operate in this way -- it does appear that they have made demands without substantiating their calculations (supposition on my part). That kind of practice puts companies into limbo for a very long time and the stupid people at HMRC are in effect jeopardising their own income potential.
It's govmint at the end of the day though innit? - seemingly populated with people with a condition known as "hard of thinking".
To be honest this could go anyway after a series of drawn out court hearings and the overall demand of £37M + £7.5M seems enough to shaft the company into a crippled state I dunno.
The one comforting factor is that the hedge fund guy Mills and the management seem to think it'll all be OKedoke in the end or they wouldn't have handed over huge wads of their cash to buy the stock.
Games - 30% under water thus far, and no divi this year!
My confusion lies around the fact that this cannot be settled. RNS is below my comment.
If HMRC were certain I believe a far stronger approach would be taken by them. The fact they are already lowering the values to reclaim is a big plus but does not meet the fact the company believes no value should be paid.
If Augen are correct and continues to believe that both the previous assessments and these pre-assessment notifications are without merit, based on expert advice why can this be presented and settled once and for all?
Can anyone add anything further as I am really confused but know a positive resolution should send the share price significantly upwards.
3 April 2018
Augean plc ("Augean" or the "Company")
Augean, one of the UK's leading specialist waste management businesses has, as expected, been issued with pre-assessment notifications from HMRC for Augean North Ltd and Augean South Ltd. HMRC has indicated that it intends to issue assessments for a total amount of £37.6 million covering the period from August 2013 to August 2017 in respect of Augean South Ltd and from October 2013 to July 2017 in respect of Augean North Ltd. HMRC has also notified the companies that it is considering issuing a reduction in the value of the previous five assessments received, from the £12.0m notified with our Preliminary Results to £7.5 million.
The receipt of the pre-assessment notifications was not unforeseen and we remain in cooperative discussion with HMRC. The Group believes from its legal advice and independent reviews of our systems that landfill tax has been collected and paid correctly. We are pleased that HMRC has recognised the majority of exemption status we had applied and as a result has significantly reduced the potential assessment value accordingly. The Group takes this as a positive and welcome initial development. We are also pleased that HMRC is responding to our situation in a timely manner and faster than we had indicated with our Preliminary Results. We continue to defend our position that the appropriate landfill tax has been paid.
The letters include HMRC's standard wording that it intends to apply interest and will consider penalties. Augean has been invited to put forward further information for HMRC to consider prior to issuing any further or amended assessment and will continue a cooperative dialogue with HMRC.
Having taken advice from leading counsel and its solicitors, Augean continues to believe that both the previous assessments and these pre-assessment notifications are without merit. The Group will robustly challenge these and any further landfill tax assessments that it may receive from HMRC, through the tax tribunal system if necessary. Based on advice received, the Group has not provided for the assessments in its accounts nor does it expect to pay the assessments levied to date. The advice received by Augean is that it will not be required to pay the assessments for at least 12 months.
Further announcements will be made at the appropriate time.
More unreliable figures from the iii website.
Today showing latest trade as 27.5 at 09:57, but on the official LSE site this trade was at 08:87.
Latest trade so far today on LSE is 28.99.
Google finance manages to get it right. Why do iii struggle ?
""Britain is facing a triple waste whammy of stalled recycling rates, not enough incinerators being built and landfill running scarce. That is the stark prognosis of the countrys busiest bin clearer, Biffa, which is calling on the government to think again on waste having followed policies that have got Britain among Europes better performers but no further. - The Times""
Augean, one of the UK's leading specialist waste management businesses, is pleased to announce that it has entered into several new contracts with an existing customer to treat and dispose of air pollution control residues (APCR).
As stated in the Group's recent preliminary results, growth in the volume of APCR treated by the Group's Energy and Construction business remains a key strategic objective in the short and medium term. These new contracts, which were awarded following a competitive tender process, are delivering on that objective and include the retention of an estimated annual tonnage of 24,000 tonnes and an additional annual tonnage of 25,000 tonnes, of which 13,000 tonnes will be incremental in the financial year ending 31 December 2016.
The contracts terminate no earlier than 31 March 2019, with the customer having the option to extend the contracts for up to two further years beyond that date.
Stewart Davies, Chief Executive, commented:
"We are delighted to be awarded these contracts, which align with a key strategic aim of the Group to expand our contracted revenue base in growth markets with our specialist hazardous waste services. The growth in APCR volumes brought by the new contracts will help the Group to continue development of its services to this competitive and growing market, and underpins existing management expectations."
Read Edison's note on Augean (AUG), out this morning, by visiting www.research-tree.com
Despite the challenging trading conditions affecting some of the divisions, the portfolio approach allowed all the group financial metrics to show double-digit growth. Good cash generation gives the group strategic options and has allowed a positive dividend surprise (+30%) reflecting the boards confidence in Augeans long-term prospects
I can't see why the revision to LFT1 in December should be a concern to Augean's market for Haz waste. The changes were:
HM Revenue and Customs (HMRC) have amended this notice to include guidance on mixed loads, quarries and on the definition of naturally occurring for Landfill Tax. The change to the content is in the following part of the notice:
Section 4.3 Definition of naturally occurring
Section 5.3 Guidance on evidential requirements including illustrative European Waste Catalogue
Section 7 Lower rate: mixed loads
Section 8.4 Guidance on the conditions that must be met where lower rated waste, used for the purposes of filling existing quarries, qualifies for exemption from Landfill Tax
These were after construction industry pressure about how a small amount of 'bad' material in a lorry load could make it liable for full landfill tax, and not Inert rate. There was another change to LFT1 earlier in 2015 that meant more loads with small quantities of asbestos fragments would have to be ALL at haz waste disposal (and rates), which would mean MORE loads going to HAz waste facilities. Unless this change affects their soil treatment centre (nil LFT), but that is a small part of their turnover? More concerning would be the Scottish/Oil&Gas market decline, which they address quite well in the Update. To me, this is a buy on weakness opportunity, but i'll give it a couple of days to see how market reacts.
The very significant uncertainty is the landfill tax point . The subtlety is that Augean depsite handling hazardous waste pay very low landfill tax relative to the volumes they take in. Various exemptions are being claimed and some must be being queried by HMCE. If these can no longer apply for a significant % of the waste mix then its £ 82.50 a tonne extra per load which would go straight to HMCE but would also double the price a customer has to pay Augean..
Landfill volumes have always been the key to profits for Augean and any uncertainty over the volumes that will come to them is a problem. Volumes will be very high if there is uncertainty as developers and market players rush to get waste off site and into Augean but would fall off a cliff if these exemptions are being removed as the price hike is so significant. They may end up at Augean if the market cannot find an alternative but Augean will not see any £ benefit if so the extra costs they will have to charge will go to HMCE.
A trading update was issued in January last year so we may expect one soon.
There seems no reason to expect anything other than a positive statement. Fingers crossed! Share price seems good value with low PE compared with recent growth in profits and competitive position of the Company.
Surprised by the poor reaction of the market to interim results.
Increased profit and EPS. Reduced bank borrowings. Service a diverse sectors of waste treatment. Not too much competition in the treatment of technically demanding waste stream. So I'll hold on.
Just to say that I've bought a few of these in the last couple of months
They increased profit/cash generation/EPS between 2013 and 2014 at impressive rate. Not on a very demanding PE at current share price. Despite significant investment in the business during 2014, there is a small but growing very well covered divi, and a small reduction in debt.
" AUGEAN PLC (LSE:AUG) has a blue line. It also has a pink one. When we look at what's happening to the share price currently, it seems either one of them is important to the market and critically, should it now close above 57p, it betters ..."
Important message from the Financial Conduct Authority:
Posting inside information that is not public knowledge, or information that is false or misleading, may constitute market abuse.
This could lead to an unlimited fine and up to seven years in prison.
If you have any information, concerns or queries about market abuse, click here.
The content of the messages posted represents the opinions of the author, and does not represent the opinions of Interactive Investor Trading Limited or its affiliates and has not been approved or issued by Interactive Investor Trading Limited.
You should be aware that the other participants of the above discussion group are strangers to you and may make statements which may be misleading, deceptive or wrong.
Please remember that the value of investments or income from them may go down as well as up and that the past performance of an investment is not a guide to its performance in the future.
The discussion boards on this site are intended to be an information sharing forum and is not intended to address your particular requirements.
Whilst information provided on them can help with your investment research you need to consider carefully whether you should make (or refraining from making) investment or other decisions based on what you see without doing further research on investments you are interested in.
Participating in this forum cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you.