Environmental Waste Controls (EWC) plans to raise up to £4 million via an AIM flotation in order to grow its business which offers waste recycling services to local authorities and businesses.
Liverpool-based EWC could have a market capitalisation of £30 million. Rising costs and EU regulation mean that there is a continuing move to reduce the amount of waste that goes to landfill. Revenues come from contracts with local authorities and other customers.
EWC has also benefited from rising commodity prices making the recycled materials, such as copper, glass and used cooking oil, more valuable. Sorting the various forms of each type of waste and stripping the copper wire will enable EWC to gain better prices. EWC plans to generate revenues from up to 50% of the waste that it handles.
EWC is a profitable business and it generated turnover of £24 million in the year to August 2010.
EWC has reduced its debt in recent years. By August 2010, net debt was around £1.8m. The £4m that will be raised in the share issue will strengthen the balance sheet, which will help the company to win tenders. EWC also wants to open more processing centres. A £350,000 freehold has been acquired for a new Scottish facility.
Founder Bill Edwards would like to sell a further £4m of shares from his existing holding – he currently owns 100% of EWC.
The shares are due to start trading on 24 May.