The trading update says this is as a result of the “faster than expected recovery of the UK economy since Covid-19 restrictions began to lift”.
Biffa says group revenues in the first quarter (April to June 2021) were 10% higher than during the equivalent period before the pandemic two years ago, and recycled commodity prices are at the “highest levels since 2018”.
The company says industrial and commercial (I&C) volumes during July 2021 are now back to pre-pandemic July 2019 levels.
This comes after I&C volumes were hit drastically during the Covid-19 restrictions (see letsrecycle.com story), as more people were forced to stay at home.
Biffa said as a result of the positive results, its board’s expectations are that the group’s full year adjusted earnings before interest and tax will be approximately 10% above current market consensus. This would equate to £87.6 million.
This is provided the reopening of the economy continues on its current pathway.
However, Biffa says the group is facing some near-term challenges caused by the national shortage of HGV drivers, which it says is now “being exacerbated by Covid-19 related absences, together with other widely reported supply chain issues”.
Biffa says these challenges are being “carefully managed”, though repeated warnings have said there will be no quick fix.
This comes as councils across the country have reported service delivery issues, brought on by a range of issues from self-isolation to Brexit (see letsrecycle.com story).
“The board is pleased with Biffa’s underlying business performance and remains confident of the group’s long-term growth prospects”
The company says the outlook for the rest of the year is inevitably linked to the ongoing strength of the UK economy.
The trading update concludes: “The board is pleased with Biffa’s underlying business performance and remains confident of the group’s long-term growth prospects.”