Waste management giant Biffa has today announced “strong” results for the 2018/19 financial year, with its revenue having grown by around 4.4% to £1,030.8 million compared to the preceding 12 months.
Increasing revenue has come about partly through organic growth in the business, which covers municipal, industrial and commercial, resource recovery and treatment, and energy divisions, as well as growth through acquisitions – particularly in the commercial division, which completed seven acquisitions during the year.
The results were underscored by an underlying operating profit of £81.7 million for the year, an increase of 0.6% compared to 2017/18. Statutory profit after tax stood at £18 million, down from £31.1 million the previous year.
The results are the first annual set to be delivered by chief executive Michael Topham who succeeded Ian Wakelin in the role in October 2018. And, Mr Topham also today (5 June) outlined plans to put in place a restructure of the business in a move he says will “best capitalise on the significant opportunities available to us”.
The move will focus Biffa’s four divisions into a two-division structure, coming into effect during the 2020 financial year, comprising Collections and Resource and Recovery.
“We are making significant progress in positioning the business for future success in an era where how we manage our waste has never been more important and I would like to thank the entire Biffa team for their continued hard work and dedication. We have made a solid start to the financial year and look forward with confidence.”Michael Topham
Led by chief operating officer Jeff Anderson, the Collections division will incorporate all of Biffa’s collection services, comprising I&C, Municipal and Hazardous Waste.
The Resources & Energy division, which will be headed up by the company’s landfill & treatment director, Mick Davis, and will be made up of the company’s waste treatment and disposal activities including recycling, energy from waste and landfill. “Its priorities are to capitalise on the clear opportunities we have in plastic recycling and energy from waste,” Mr Topham wrote in his chief executive’s statement.
An increased focus on plastics sees the company announce that it is almost doubling the investment in its planned PET plastic bottle recycling facility at Seaham, County Durham, with a total spend of £27.5 million now being planned for the plant.
Commenting on the results and future outlook, the company’s chief executive, Michael Topham, said: “I am pleased to report another year of strong performance by Biffa. We have delivered a good set of financial results for the year while making further strides in the delivery of our strategy.
“We are making significant progress in positioning the business for future success in an era where how we manage our waste has never been more important and I would like to thank the entire Biffa team for their continued hard work and dedication. We have made a solid start to the financial year and look forward with confidence.”
Looking back at the 2018/19 year, Biffa said that its industrial and commercial division has performed well with operating margins increasing to 9.1% from 8.4% last year. This was achieved despite the business “experiencing lower recyclate prices and cost pressures in labour and fuel,” Biffa said. Notable acquisitions within the division include Weir Waste Services and Specialist Waste Recycling Limited.
On the municipal side Biffa reported a “somewhat more challenging time”, with margins coming under pressure as a result of higher fuel and labour costs, the expiry of some higher-margin mature contracts, and difficulties with a newer contract.
“Whilst we have been disappointed with the results for the year, we are encouraged by the stability we have seen in trading performance in the later stages of the year, and by recent contract wins,” the company said.