The figures, for the half year to September 29 2006, showed revenues up 5.8% to 376.5 million (2005/6: 356.0 million) and operating profit up 8.7% to 48.9 million (2005/6: 45.0 million).
Martin Bettington, Biffa chief executive, said: “We have delivered a strong set of maiden results, with all divisions achieving organic growth in the first half of the year. Our strategy of operating across the whole waste management value chain positions the business well to respond to changes in the industry driven by legislation.”
– Martin Bettington, Biffa Behind the figures, the company pointed to strong revenue growth in its collection services to national trade account customers while the performance of the local authority side was hit by difficulties on the Leicester contract.
Local authority
A statement accompanying the results confirmed that Biffa is having some difficulties at its ball mill in Leicester, which provides a shredding and processing service for household waste along the lines of a mechanical biological treatment (MBT) process.
The process aims to split the waste fractions into organic material and a floc waste which can be burned in cement kilns. Mr Bettington explained: “Our Leicester contract is in two parts. One is the customer facing side, collection and sorting of recyclables. The second is new MBT technology of the ball mill and then the digester.”
He added that while there have been delays in full commissioning of the plant, Biffa now had a team in place and was installing more shredding equipment and considered it was now “80% there.”
On a more positive note, Mr Bettington highlighted the company's contract with Wirral metropolitan borough council which saw it secure a 140 million award in August this year.
And, further contract developments are expected on the Isle of Wight where the company operates a simpler type of MBT process, using a hammermill as part of a process to shred and separate waste for use as either a fuel or as an organic material. Mr Bettington said the company was in contract discussions with Norwegian firm Energos about a gasification plant proposed for the island, which will be supported by Defra's New Technologies programme.
letsrecycle.com understands that the plant will have a 40,000 tonne annual capacity and could have an operational start in 2008. The plant is to convert waste into a biofuel which can then be used to generate energy.
Industrial and commercial
Biffa's profits come roughly 50% from its collection activities and 50% from landfill, Mr Bettington explained. On the collection side, the largest sector is industrial and commercial collection activity, and in the six months to September 29 revenues increased by 6.7%, from 166.5 million compared to 177.7 million in the same period last year.
A statement from the company said: “Our objective of targeting growth from national accounts is proving successful and these now account for nearly half of our industrial and commercial revenues whilst maintaining our margins. In July, following a six month inter-regnum, Nick Gregg a new senior executive with substantial service sector experience was appointed to head up the Collection Division. He brings a new, more sophisticated approach on customer service which will take the industrial and commercial collection activities to their next stage of development.”
Mr Bettington explained that the company is now “deliberately targeting customers to try and include them as contracts on a national basis.” Biffa can do this, he said, “because of our national network and our IT support.”
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Looking ahead, the chief executive said he expected even more business customers to make use of recycling services because of the need from October next year to pre-treat waste before sending it to landfill. Separately recovering materials before sending material to landfill is likely to be one way that this requirement will be carried out, he added, although the regulation are still only in draft form.
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