9th Mar 2022 07:00
Biffa plc
Full year forecast reaffirmed
9 March 2022
Biffa plc ('Biffa', 'the Group' or 'the Company'), today issues a trading update ahead of its full year results for the 52 weeks ending 25 March 2022, scheduled to be announced on 16 June 2022.
Current Performance
Trading in the second half of the year has continued to plan, with full year underlying performance due to be in line with the Board's expectations. Group Net Revenues for the eleven months to February 2022 were c.35% higher than FY21 and c.20% higher than FY20. Excluding acquisitions growth has been c.25% and c.10% higher respectively.
In Collections, like-for-like I&C volumes (adjusted for acquisitions) have stabilised slightly above pre-pandemic levels. To date we have successfully offset cost inflation and supply chain challenges with price increases and other measures and the issue of shortage of HGV drivers has also eased in recent months.
In Specialist Services, the Industrial Services business is performing strongly. In Company Shop Group ('CSG') trading has continued to be challenged, but in recent weeks we have started to see an improvement in both membership levels and gross margins.
The Resources & Energy division has benefited from the recovery in both volumes and pricing.
Strategic Update
The Simply Waste and Viridor acquisitions are both trading in line with expectations. Integration is progressing to plan, and we remain on track to deliver our targeted synergies.
In Polymers, our rPET facility is expected to be operating at full pellet capacity as we move into the new financial year, alongside the introduction of the UK Government's Plastic Packaging Tax. Construction of the third rHDPE line in Redcar is underway and, is expected to be operational in FY24.
The construction of both of our Energy Recovery Facilities remains on schedule. Newhurst is expected to commence commissioning in late 2022, with commercial operations scheduled for early summer 2023. Protos will follow around 12 months later.
Underlying cash generation has been strong and leverage at the end of March is expected to be c.3x Adjusted EBITDA (on a post IFRS16 basis) (H1 FY22: 3.4x). The issuance of a further £195m of new 8-, 10- and 12-year private placement notes last month provides additional balance sheet strength. This will leave the £350m RCF undrawn at the year end.
Outlook
The Board is pleased with the performance and underlying resilience of the business. Whilst the Board is mindful of the potential impacts of events in Ukraine, we remain confident of the Group's position and reaffirm the Group's forecast for the current year.
Enquiries:
Investors
Michael Topham, Chief Executive Officer
Richard Pike, Chief Financial Officer
Paul Tillstone, Head of M&A and Investor Relations
Media & Analysts
Houston
T: +44 (0) 203 701 7660
Cautionary statement regarding forward-looking statements
This announcement contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the Company's business. Whilst the Company believes the expectations reflected herein to be reasonable in light of the information available to them at this time, the actual outcome may be materially different owing to factors beyond the Company's control or within the Company's control where, for example, the Company decides on a change of plan or strategy. Accordingly, no reliance may be placed on the figures contained in such forward-looking statements.
The forward-looking statements contained in this document speak only as of the date of this announcement, and Biffa does not undertake to update any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
About Biffa
We've been leading the UK's waste management industry for over 100 years and have a strong track record of growing our profits and returns to shareholders, whilst reinvesting to grow our business.
Today Biffa is an established enabler of the UK circular economy and our team of more than 10,000 colleagues carry out essential operations every day including surplus redistribution, recycling, treatment, energy generation, collection and disposal.
Our purpose is 'to change the way people think about waste' and sustainability has been at the heart of our business strategy for many years. Our areas of focus essentially reflect the waste hierarchy - to Reduce, Recycle, Recover and Collect.
We have already made huge strides in our sustainability journey by investing in surplus redistribution, plastic recycling, energy from waste infrastructure and low carbon collections, leading to a 70% reduction in our carbon emissions since 2002. Our sustainability strategy, 'Resourceful, Responsible', will see us unlock £1.25bn of investment in vital green economy infrastructure by 2030, of which £1bn has already been unlocked, while further reducing our carbon emissions by 50% by 2030. We aim to have net zero emissions by no later than 2050.
We understand that we must lead by example and are committed to further improving health, safety and wellbeing in our sector. We are proud to have been awarded a 5 star grading by the British Safety Council. We have also made strong progress in making sure Biffa is an inclusive place to work where diversity is championed and our >10,000 strong workforce feel valued and understand the positive contribution they make to enabling the UK circular economy.
Our long-standing Biffa Award programme supports sustainable projects across the UK which deliver environmental benefits while making a valuable contribution to local communities. Our partnership with WasteAid helps countries in the developing world with managing their waste more sustainably.
Biffa is a Great British Company, listed on the London Stock Exchange (LSE:BIFF) and a member of the FTSE 250. That's just a bit about us. To find out more, visit: www.biffa.co.uk/investors
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