Biffa’s latest half-year results have revealed lower contract margins in its municipal sector but strong growth in landfill volumes and prices.
The company says performance up to the September reporting date was as strong as had been anticipated and full-year expectations remained unchanged.
Net revenue was up 7.8% to £481.6m and the underlying profit rose 9.3% to £43.4m. Two acquisitions completed during the period, including O’Brien in July, brought a combined annual revenue of around £35m.
The report comments on the four divisions, noting that the municipal division had shown a “satisfactory performance in a competitive market”. Revenue grew 9% but two-thirds of that was accounted for by the purchase of Cory’s local authority division.
Biffa noted that performance and outlook had been moderated by “continuing competitive market conditions”, resulting in lower margins on new contracts.
Our full year expectations remain unchanged and we look to the future with confidence
The resource recovery and treatment division saw organic net revenue growth of 9.4%, aided by “strong landfill volumes and prices”, new operations, including its HDPE line in the north-east of England, and acquisitions.
“Strong landfill volumes and pricing [are] expected to largely mitigate cost and price headwinds from recent changes in Chinese regulations for import of recycled commodities,” the report said.
Net revenue in the energy division was stable at £42.3m, with increased energy prices offsetting expected declines in landfill gas generation. Landfill gas volumes are declining at around 7.5% a year.
2000 biffa ian wakelin 2017
Chief executive Ian Wakelin (pictured) said the group was continuing to deliver on its strategy of acquisitive and organic growth.
“Looking ahead, we see attractive growth opportunities, including a healthy pipeline of acquisitions of a range of sizes.
“We also have scope to continue to develop our infrastructure and services, taking advantage of the significant amount of waste we control. We look forward to reporting on the progress made in our energy-from-waste feasibility assessments when we announce our full year results.
“Our full year expectations remain unchanged and we look to the future with confidence.”