Biffa says that after a “stronger than expected” third quarter of the 2020/21 financial year its net revenues stood at around 95% of where they were in the same period in 2019/20.
The waste management company says its underlying profits have also shown “further recovery”, despite saying in November they had fallen by 96% in the first half of 2020/21 when compared to 2019/20 (see letsrecycle.com story).
The third quarter of the 2020/21 financial year covers October to December 2020.
However, Biffa expects the current lockdown restrictions to have a considerable impact on its businesses. It estimates industrial and commercial (I&C) volumes will drop to around 70-75% of prior year levels, having dropped to around 85% of prior year levels in November.
Biffa says it sees similar trends in landfill volumes and expects low rPET flake and PRN prices to continue through the final quarter.
Despite the pessimism, Biffa’s board says the offsetting impacts of stronger than expected trading during the second and third quarters mean its expectations for the year remain unchanged.
In a statement issued today (14 January) the waste management company said: “In the short term the Group’s priorities remain to protect the health, safety and wellbeing of its people whilst maintaining the provision of essential services to its customers and protecting its financial health.
“The Group’s performance demonstrates its resilient business model, and it will continue to invest to help build a stronger, more sustainable business once it emerges from the pandemic.”
Biffa says its acquisitions of Ward and Simply Waste are performing in line with expectations. Biffa bought the compaction services business of Derbyshire-based metal and waste recycling specialist Ward in September (see letsrecycle.com story), while it acquired Simply Waste Solutions for £35 million in October (see letsrecycle.com story). Active negotiations continue on several other potential acquisitions, Biffa says.
Despite the current lockdowns across the UK, Biffa says ‘phase two’ of its Seaham rPET plant and projects at Washington and Aldridge are progressing to plan. It expects all three to come online early in the 2021/22 financial year. However, it added low rPET flake prices would hit the Seaham plant’s contribution for the rest of the current year.
The waste management company said construction of its Protos energy from waste plant was making “good progress”. Financial close on the plant in Cheshire was reached in December (see letsrecycle.com story). Biffa said the development of its Newhurst facility in Leicestershire was making similarly strong strides.