The strategy of making Augean (L:AUG) a more resilient and sustainable business is clearly working with the update (25 January) suggesting trading remains in line with expectations. Given the exposure to the oil and gas market, this is a robust performance and reflects a management team on the front foot. With the share price drifting to the bottom of our valuation range (49- 77p), nervousness over recent oil price weakness seems overdone.
Trading remains in line with market expectations
Given the challenging economic background the strategy of operating five business units in diverse markets was clearly beneficial. Having tweaked our divisional assumptions at the interim stage, this update sees a continuation of the trends seen then and we are not proposing to adjust our group forecasts. Strong cash generation and the timing of some capex left net debt at £4.3m at end of 2015 and below market expectations.
To read the entire report Please click on the pdf File Below