The Norse Group released its financial results for the 2019/20 financial year, in which it said its sales and profit margins were increased by "improving raw material prices from recycled materials".
The municipal trading company released its results on August 7th, which presented consolidated financial performance for the entire group.
According to the report, the group's total revenue for 2019/20 was £ 339 million, an increase of 10.6% year over year.
Pre-tax profit for the period was £ 4.6m after £ 10.6m in 2018/19.
100% owned by Norfolk County Council, Norse provides a range of services in England and Wales including facility management, real estate services and nursing homes. The company employs more than 10,000 people.
A Norse Group spokesperson said: “2019/20 was a critical year of progress with sales up £ 32 million year over year. This increase, coupled with a strengthening of the underlying profit margin, is a strong indicator of the Group's financial strength and contributes to an after-tax profit of £ 4.03m.
“Notable developments over the year included the improvement in raw material prices for recycled materials and the addition of two new waste collection services in Medway and East Hampshire.
“In June of this year we added a new garbage collection service to our portfolio in Amber Valley, Derbyshire. That means we now offer domestic garbage collection to more than a million people in England.
"Notable developments during the year included the improvement in raw material prices for recycled materials and the addition of two new waste collection services."
"We are confident of signing additional contracts in this growing area of activity in the coming year."
Nordic environmental services
Norse Environmental Services (NES) is the branch of Norse that covers waste services.This includes waste collection and recycling, as well as facility management, including CA locations and material recycling facilities.
NES revenue increased 18% (£ 34m) to £ 217m. This was supported by environmental service contracts signed in East Hampshire (see the story of letsrecycle.com) and Medway, as well as maintenance services for motorways in Norfolk (see the story of letsrecycle.com).
According to the report, the figures were also supported by “cheap” raw material prices for recyclable materials. This enabled NES to deliver improved gross margins of 20.1% from 17.5% in 2018/19.
The group said these profits will be shared with many of their client partners who make up the partnership structures in which NCS operates.
The company did not individually report profits for NES 2019/20, but it was targeting a profit of £ 2.2m.
Norse Environmental Waste Services (NEWS), which sells recyclable materials on behalf of the seven councils of the Norfolk Waste Partnership, posted a loss of £ 2.8m in 2018/19 attributed to "a significant reduction in sales revenue" was of materials ”(see letrecycle.com story).
According to the financial statements, the group performed “well” in 2019/20, but Covid-19 had a “significant” impact on expectations for 2020/1.
It was added that the nature of the deal is expected to limit the potential impact but will have a negative impact on trading in the short term.
Following this, the group expects the results for 2020/21 to be below those for the 2019/20 financial year.
The group has also applied for leave in order to obtain funding, which they believe "has allowed them to mitigate some of the impact".
Overall, however, Directors are confident that performance will return to previous levels in the medium term and that there will be further growth opportunities.