21st Nov 2018 10:11
LONDON (Alliance News) - Biffa PLC on Wednesday reported a drop in interim profit on expected headwinds from competitive markets, but increased its dividend, as the company's full-year guidance remained unchanged.
For the 26 weeks to September 28, the waste management company's pretax profit decreased 19% to GBP23.7 million from GBP29.2 million in the 26 weeks to September 22.
In the same period, Biffa's revenue increased 2.7% to GBP549.2 million from GBP534.6 million.
Biffa increased its interim dividend by 6.0% to 2.30 pence from 2.17p paid out the year before.
"Biffa has delivered a solid first half set of results, despite a number of expected external headwinds and our expectations for the full year remain unchanged," said Chief Executive Officer Michael Topham.
The firm's largest division, Industrial & Commercial, increased its revenue by 7.9% to GBP302.9 million from GBP280.7 million.
"The delivery of our strategic objective of building the leading UK Industrial & Commercial waste management platform continues, with another very strong period of organic and acquisition growth and expanding margins in this key division for Biffa. We have an established track record of delivery and are confident that we can continue to execute this proven strategy in the coming years," continued Topham.
Biffa's other three major divisions - Municipal, Resource Recovery & Treatment and Energy - all suffered a drop in revenue.
The company blamed "competitive markets" for the collective drop. Biffa has undergone a "thorough review" in its Municipal division to stabilise its underlying performance.
The Resource Recovery & Treatment division's drop was blamed on the "China backdrop" but Biffa said it "responded rapidly to this issue, refining the product quality criteria as well as broadening other domestic and export markets".
The company's tonnes of waste collected decreased slightly to 2.05 million tonnes from 2.08 million tonnes a year before. Biffa explained that "some contract attrition" in its Municipal division led to the fall.
Biffa's tonnes processed jumped sharply to 2.1 million tonnes from 1.7 million tonnes, which was attributed to acquisitions in the period.
Landfill volumes declined, in line with Biffa's medium-term trend expectations, as tonnes landfilled from the company decreased to 1.5 million from 1.6 million.
Topham added: "The key themes in the UK waste management industry remain collection market consolidation and development of infrastructure in recycling and energy from waste. Biffa remains well placed to capitalise on these, and we look forward with confidence."
For the year ended March 2017, the waste management firm had recorded a pretax profit of GBP38.3 million on revenue of GBP1.08 billion.
Shares in Biffa were down 4.4% at 218.00 pence each.
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