Biffa (BIFF) chief executive Michael Topham said Covid-19 had “overshadowed what was otherwise a very successful year”. The waste management group reported growth in net revenue – which excludes landfill tax – of 7 per cent to £1.1bn in the 12 months to 27 March, while underlying operating profit increased by 11 per cent to £91m.
Accounting for more than two-thirds of overall net revenue, the industrial and commercial (I&C) division generated 8 per cent growth to £604m. This was driven by acquisitions, in particular the full year contribution of Specialist Waste Recycling, purchased in March 2019 for £26m. The I&C segment has been most impacted by coronavirus disruption as shuttered businesses significantly reduced demand. With revenue currently 40 per cent lower than pre-pandemic levels, the group expects this to recover to 80-90 per cent by the March year-end.
The group is currently engaged in a historical landfill tax dispute with HMRC and a proportion of any recovered funds will be paid to preference shareholders. Excluding these obligations and lease liabilities, net debt came down 8 per cent to £285m, equivalent to 1.8 times underlying cash profits. Having paused acquisitions activity, curbed capital expenditure and scrapped the final dividend, Biffa believed it can avoid a “marked” increase in net debt this year. Nevertheless, management sought fit to agree an increase in its debt covenants at the September testing date.
Peel Hunt expects adjusted pre-tax profit of £29.1m and EPS of 9.3p in 2021, rising to £50.2m and 16.1p the following year.
| BIFFA (BIFF) | ||||
| ORD PRICE: | 249p | MARKET VALUE: | £ 623m | |
| TOUCH: | 249-250p | 12-MONTH HIGH: | 314p | LOW: 165p |
| DIVIDEND YIELD: | 1.0% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 164p* | NET DEBT: | 114%** | |
| Year to 27 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 0.93 | 2.9 | -5.1 | nil |
| 2017 | 0.99 | -18.7 | -10.9 | 2.4 |
| 2018 | 1.08 | 38.3 | 12.4 | 6.7 |
| 2019 | 1.09 | 21.5 | 7.2 | 7.2 |
| 2020 | 1.16 | 56.4 | 18.3 | 2.47 |
| % change | +7 | +162 | +154 | -66 |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes £329m in intangible assets or 132p a share, **Includes £258m in lease liabilities | ||||
