Waste management group Biffa (BIFF) put in a strong performance in its maiden full-year results, with underlying operating profit growing 18 per cent to £73.8m. The statutory figures are less flattering, with exceptionals related to the public offering and the ongoing dispute with HMRC over landfill tax weighing heavily on the income statement.
The group expanded via a mix of organic and acquisitive growth through the year. Chief executive Ian Wakelin said of the 8.3 per cent net revenue growth over the year, 3.3 percentage points represented organic growth - the major industrial and commercial division won clients including Gala Bingo - and 5 percentage points came from acquisitions made during the year. Despite these five purchases, the group cut net debt to less than half its FY2016-end level.
Mr Wakelin said there aren't immediate plans to reduce leverage from the current level of 1.8 times underlying cash profit; he would be happy to see it creep up if an attractive acquisition opportunity came along. The group is also looking to invest in energy-from-waste services, signing up to an arrangement with specialist Covanta to explore two potential projects, one in Leicestershire and another in Cheshire.
Analysts at Peel Hunt are forecasting adjusted pre-tax profit of £54.2m, giving EPS of 17.3p in the year to March 2018 (from £45.1m and 14p in FY2017).
BIFFA (BIFF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 196p | MARKET VALUE: | £489m | |
| TOUCH: | 194-196p | 12-MONTH HIGH: | 200p | LOW: 166p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | na | |
| NET ASSET VALUE: | 117p* | NET DEBT: | 84% | |
| Year to 24 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 860 | -26.1 | na | nil |
| 2015 | 878 | -7.5 | na | nil |
| 2016 | 928 | 2.9 | -5.1 | nil |
| 2017 | 990 | -18.7 | -10.9 | 2.4 |
| % change | +7 | - | - | - |
Ex-div: 6 Jul Payment: 28 Jul *Includes intangible assets of £290m, or 116p a share | ||||
