In financial results published this morning (15 December) for the period between April-September 2022, Biffa posted a profit before tax of £38.3 million across its group, up from a loss of £25.6 million a year ago.
During this time, Biffa also acquired the trade and assets of DJB Recycling, “a £4.7m revenue waste collection and recycling business”, for £1.9 million.
Soon after the period end, Biffa also acquired the entire share capital of Forge Recycling (Holdings) Limited, “a £14.9m revenue waste collection and recycling business for an upfront net cash consideration of £15.9m.” A further £5.5m is payable subject to the performance of the acquired business through to the end of March 2023, the results say.
The company said there have been no “material movements” in the period in relation to the HMRC landfill tax enquiry, while no interim dividend is proposed due to the terms of the takeover deal with Energy Capital Partners.
Highlights
Biffa added in its results that trading in the first half of FY23 saw continued growth due to “increased selling prices, strong commodity values and an increased contribution from the Viridor business”.
It added that inflationary cost increases have been largely offset, “demonstrating the resilient nature of the group’s operating model.”
The company’s energy recovery facility at Newhurst commenced commissioning in October (see letsrecycle.com story), with the Protos facility expected to begin commissioning in late FY24.
Divisions
Biffa’s municipal division saw revenue grow by 16% year on year to £495.1 million. This includes its industrial and commercial teams.
The rise is primarily due to the revenue acquired with the Viridor deal, together with ad hoc additional services in certain contracts.
However, these revenue increases “have largely mitigated inflationary pressures and as a result, the underlying profitability of the business is broadly flat year on year”.
The municipal division posted a profit of £31.9 million, up 5% from the previous period.
Recycling
Its resources and energy part of the business, which focuses on the sustainable treatment, recycling, energy recovery and ultimate disposal of waste, saw a 28.3% jump in revenue.
This was driven by high recyclate prices driving strong performance for MRFs, as well as the Viridor assets performing.
Statutory revenue in the organics business increased 61.1% year on year. The improvement is entirely attributable to the assets acquired in the Viridor deal and they have benefited from the ongoing strength in commodity prices
This led to a £40.7 million profit for the division, up from a £9.8 million loss last year.
Acquisitions
Leeds-based Forge Recycling offers a range of waste collection services across the area, including house clearances, skip hire and commercial waste collections.
It covers large parts of the north of England including Doncaster, York, Wakefield, Huddersfield and Barnsley. On its website, Forge Recycling says it reuses 80% of the bulky waste it collects.
DJB Recycling says it has nationwide coverage for its waste collection and skip hire services. Since being founded in 2005, the company says it has “steadily grown our client base by consistently living our values of delivering high quality services and dependable machinery with a reassuring attention to detail”.
DJB Recycling offer a “modular cradle to grave recycling and waste management service”.
While the DJB Recycling acquisition was mentioned in earlier results, both acquisitions were not publicised much.
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