Metals recycler Sims Ltd. is expanding the review of its operations in the UK. Based on the initial results of an operational review that the US-Australian group launched this summer, Sims has decided to conduct a full strategic review of the business. The move had been motivated in part by "expressions of interest from potential buyers indicating that these assets may well deliver enhanced value to the company’s shareholders through alternative ownership", said the company in a statement issued today.
Sims first announced the operational review of its UK Metal division at the release of its earnings report for the 2022/23 financial year in August. Then CFO Stephen Mikkelsen explained at that time that the outcome of the assessment process could be anything from a realignment of the portfolio within the unit to an outright sale.
The recycling group said on 22 November that it is now exploring "several value creation opportunities, including strategic partnerships, co-investment, and potential divestment transaction structures". Macquarie Capital has been engaged to assist with the review.
"With 28 facilities and four shredders processing over 1.4 million tonnes of scrap metal annually, UK Metal is a leading scrap metal provider in the region," Mr Mikkelsen commented, who took over as Sims' CEO on 1 October. " The business is uniquely positioned to support steel and non-ferrous metal producing industries with their transitions to low-carbon raw materials and production. The objective of the strategic review is to ensure Sims is maximising value from the strong platform which we have developed over many years in the region."
In its annual report, Sims noted that its British metal recycling business had faced higher inflationary pressures in the 2023 financial year ended 30 June than any of the group's other units. The business had also contended with strong competition for shredder feed. The UK Metal unit generated annual revenues of AUD1.423bn (ca. €855m) and posted a statutory loss before interest and tax of AUD14m (ca. €8.4m). The division had a staff of 668 employees in the past financial year.
