Augean plc (LON:AUG) have told shareholders that they will suspend their annual dividend due to its net debt situation.

The Executive Chairman commented: “The Group is currently trading in line with the Board’s expectations for 2020 with a continued focus on business growth in niche segments and cash generation. The Board will not pay a dividend for 2019, maintaining its position of not resuming dividends until the debt, recently drawn down to fund the HMRC payment, is significantly reduced.”

The firm said that it had swung to a net loss despite seeing revenue growth across the annual period.

In their financial year, which ended on December 31 – the waste management firm recorded a pretax loss of £15.3 million which sees a sharp drop from £10.6 million profit booked the year before.

Notably, Augean booked a £26.2 million charge related to the settlement of landfill tax assessments.

HMRC issued Augean South with a final assessment for £16.2 million from the period from February 2015 to May 2018, and in October a £11.4 million bill was issued to Augean North.

Pretax profit rose for the firm, from £11.4 million to £19.2 million – notably this equates to a 68% rise.

Augean recorded that revenues had climbed 34% year-on-year to $107.1 million from £79.7 million, which the firm said was down to good ales at all sales.

The firm praised the performance of the Treatment & Disposal segment and North Sea which saw rises of 24% and 61%.

Augean added that the group’s net debt was £17.8 million, compared to last year where they had cash surplus of £8.2 million.

The firm stated that they will not be paying a dividend until its HRMC payment is reduced.

Commenting on the results, Jim Meredith, Executive Chairman, said:

“2019 was a good year for the Group. I look forward to making further progress in 2020 with growth in the Group’s core niche markets.

The Board recognises that our business success is dependent on the quality, diligence and hard work of all Augean’s employees and I would like to take this opportunity on behalf of the Board to thank everyone who has contributed to the Group’s strong progress during the year.

As in previous years, I am pleased to note the addition of new shareholders to our register during the year and again I am thankful for the continued support from all of our investors.

The Group set ambitious targets for the 2019 year which it comprehensively exceeded. Undoubtedly 2020 is economically uncertain for the UK economy as a whole whilst Brexit plays out but, with limited direct exposure to EU markets, coupled with a strong start to 2020 trading and a robust pipeline of activity, the Board remains confident in the Group’s prospects for the new financial year.

October optimism fades for Augean

In October, the firm posted an impressive set of results, which saw shares rally.

Augean said that 2019 statistics will show a 20% rise in landfill volumes across all waste sectors, with landfill prices also increasing by 20%.

The company benefitted particularly from increased profits on radioactive waste operations, along with strong figures in waste treatment and North Sea businesses.

Augean saw an adjusted pretax profit of £16.5 million, and that 2019 annual profits were set to exceed expectations at the start of the year.

In 2018, pretax profit amounted to £10.6 million, following adjustment this rose 69% from 2017 totaling £11.4 million.

Shareholders will be concerned that Augean have decided to suspend their dividend. The firm will look to rebalance its debt situation and hope that shareholders can hold optimism in the firm.

Shares in Augean trade at 214p (-1.14%). 26/2/20 13:59BST.