Biffa today reported net revenue year on year growth of 8.8% bringing the numbers close to £1 billion at £977.7 million (2017: £898.8m).
Underlying operating profit was up 10% to 381.2 million (2017: £73.8m) with a final dividend per share proposed of 4.53p, almost double the 2017 figure of 2.40p. Underlying profit after tax was up 33.8% to £47.9m (2017: £35.8m).
Alongside the results, the waste management company announced that chief executive Ian Wakelin is to step down as he no longer wants to hold a full time role. Current chief financial officer, Michael Topham is to become chief executive.
Highlights of the result, said Biffa, was the completion of £47.1m worth of acquisitions with more deals in sight. The results are for the 53 weeks ended 30 March 2018.
And, the company confirmed that its making “good progress” in terms of developing two energy from waste projects with Covanta. These are expected to proceed, subject to final evaluation.
Ian Wakelin, chief executive of Biffa, said: “We are delighted to report another year of strong performance by Biffa. Our strategy remains unchanged; to grow market share, develop services and infrastructure, and optimise systems and processes, and we are pleased with the progress made against all three of these strategic goals.
“In the year we completed seven acquisitions spread across a wide area of the country, demonstrating the strength of our platform into which we can consolidate acquisitions. The pipeline of potential targets remains strong, and we expect to make further acquisitions in the coming year.
“We have made good progress in evaluating the investment opportunity we have in energy from waste alongside our partners Covanta and expect to be able to announce an investment in due course. The UK has a significant shortage of energy from waste treatment capacity and we are well placed to facilitate and invest in these much-needed facilities.”
Mr Wakelin continued: “The recycling markets continue to be challenging, however the environmental and economic drivers of recycling remain compelling and the actions we are taking position us well for the future.
“We believe Biffa is well positioned in all of the its key markets and we look forward with confidence.’’
Of Biffa’s four divisions – Industrial and Commercial; Municipal; Resource Recovery and Treatment; and Energy, the strongest revenue growth was in RR&T at 13.2% but this sector was weaker in terms of profit growth at 18.1 with the company’s Industrial and Commercial operations showing a significant profit increase of 24.9% with 9.9% revenue growth.
Contract gains in the I&C sector include work for KP Snacks, Arcadia, Bourne Leisure and Kerry Foods.
On the municipal front, the company said that there had been “excellent client engagement with continued high levels of service and client satisfaction resulting in the agreement to extend six contracts and the award of a new one.”
The new contract award is for Melton borough council which has awarded Biffa a 10 year waste and street cleansing contract starting in October 2018.
Paper recycling is still proving challenging, the company said. This because of the impact of the Chinese regulations which have restricted the type of material allowed to be exported to China and in particular has made mixed papers a problem.
But, Biffa said it had made a “swift and decisive response” to focus on quality along with developing revised terms with local authority partners, diversifying end markets and modifying plant operations to focus on separated paper.