Biffa has posted what it called “solid” half-year financial results despite a fall in profits, as the company announces a £15m investment in a PET bottle recycling plant.
In the 26-week period up to 28 September, Biffa’s net revenue hit £501.8m, which is up 4.2% over the same period in the previous year.
But underlying EBITDA decreased from £76.3m to £75.6m and underlying profit after tax fell from £26.7m to £24.9m. Statutory profit after tax fell by nearly 20% to £19m.
Problems in the company’s municipal division were in part to blame for lower profits.
Biffa said the division’s trading performance was “impacted by a number of factors in a competitive market” including the ending of contracts at Stafford and Surrey Heath.
Biffa lost out to Veolia when Stafford Borough Council switched household collection contractors.
Biffa also made four acquisitions in the second half of the year worth £20m.
It added that “significant progress” had been made with incineration specialists Covanta over financing two energy-from-waste facilities in Cheshire and Leicestershire.
Chief executive Michael Topham, pictured, said investment in a PET bottle recycling plant was a “major commitment”. It is expected to take 18 months to build.
Biffa said it is considering setting up a joint venture to deliver the project, and the facility will produce 25,000 tonnes of material a year.
Topham said: “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.
“The scale of our collection operations, and the control of materials that comes from this, offers us an attractive and advantaged position from which to invest in recycling and EfW opportunities.
“Our intended investment in proven energy from waste technology alongside our partner Covanta is making good progress, with the strategic and financial investment case having strengthened since we first announced our plans in this space.
Referring to the new PET bottle recycling plant, Topham said: “We are proven players in this space and are excited about further growing our operations in this critical area of our industry.
“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.”