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Acquisitive Mercury Recycling boosted 2007 pre-tax profits fourfold to £445,000 and is paying £1.1 million for lamp recycler Envirolite.

Manchester-based Mercury, which recycles fluorescent lights and sodium streetlights, increased sales by a more modest ten per cent last year to £6.65 million, but profitability at the AIM-quoted company gained from a paring of costs and the absence of a £204,000 goodwill impairment charge, which had dampened 2006 results. Lord Barnett, the former Labour minister who chairs Mercury, says an adverse balance in the company’s distributable reserves rules out paying a dividend this time, but says he expects Mercury to initiate a ‘progressive’ dividend policy next year.

Barnett argues Mercury’s results are ‘especially pleasing’ in the light of the confusion over last year’s late implementation of the European Union’s Waste Electrical and Electronic Equipment (WEEE) Directive. Now, however, the position is ‘much clearer’ and it is illegal to landfill lamps and other WEEE products.

That suggests room for further growth, as the company, whose chief executive Simon Libor is now standing down, reckons only 30 per cent of 130 million lamps in Britain are at present recycled. Barnett claims yesterday’s agreement to buy waste recycling specialist Envirolite for up to £1.1 million will prove ‘complementary’ and open up new geographic areas.

He says figures for the first three months of 2008 are ‘in line with expectations – ‘though, of course, there will be competition and price pressures’. Floated seven years ago at 20p, Mercury Recycling shares reached 40.5p in 2005, before plunging to 16p last August.

Now 25.75p, up 6.25p today, they value the company at £8.6 million and could make further progress.

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