15th Dec 2022 10:20
(Alliance News) - Biffa PLC on Thursday reported a swing to profit in the first half of its financial year, but it said the second half could be "more challenging".
The High Wycombe, England-based waste management company has agreed to be bought by a private equity firm, with the deal expected to be completed in the first quarter of next year.
Biffa said pretax profit for the six months that ended September 23 was GBP38.2 million, swinging from a loss of GBP25.6 million a year ago. Revenue grew by 23% to GBP825.6 million from GBP671.2 million a year ago, as the first half saw "increased selling prices, strong commodity values and an increased contribution from the Viridor business".
Biffa bought the Viridor waste management business from water utility Pennon Group PLC, completing the deal in August of last year.
Biffa declared no dividend for the first half, compared to a dividend of 2.20 pence per share a year ago, citing the terms of its takeover by private equity firm Energy Capital Partners LLC.
In September, Biffa agreed to a GBP1.3 billion takeover offer from ECP, with the takeover expected to be effective in the first quarter of 2023.
Biffa said it was well placed to "manage its financing and other business risks satisfactorily", although the second half of the year could be more challenging due to the likelihood of recession. Biffa said it will be able to trade through this environment.
During the first half of financial 2023, Biffa was also awarded a 10-year contract to provide logistics, sorting and counting services for the Deposit Return Scheme for drinks containers in Scotland.
Biffa shares were trading marginally lower at 408.60p per share on Thursday morning in London. The takeover offer from ECP is for 410p in cash.
By Harvey Dorset, Alliance News reporter
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