The increase is partly due to the UK Waste acquisition. The increase in turnover was matched by an increase in profits up 44.6% to 45.7 million. After goodwill amortisation totalling 8.7 million, mostly relating to UK Waste, profit before interest and exceptional costs amounted to 37 million. The cost of integrating UK Waste is put at 15.5 million and has been planned for or already met.
Severn Trent chairman David Arculus, said: “The transformation of Severn Trent into an environmental services company has accelerated. Almost all our businesses are ahead of the targets we set a year ago and our non-regulated businesses are well positioned for strong organic growth. We are particularly pleased by the 58% profit growth from Biffa and Severn Trent Services.”
Severn Trent group chief executive Robert Walker said: “With more synergies to come from the UK Waste acquisition together with further improvements from Severn Trent Services and the continued out-performance of Severn Trent Water, we are well positioned in our target markets to be a leading provider of environmental services and to deliver strong organic growth.”
10% market share
The combination of Biffa and UK Waste gives the company a 10% share in the UK market, said Mr Arculus. “It brings with it strengths in logistics, recycling and in the generation of green energy. The Biffa team is energetically proceeding with the integration of the two businesses and is already ahead of schedule.”
The chairman reported that in the UK, Biffa collection division “had another very good year” with turnover rising 40.3% to 212.7 million and profit up 40.5% to 28.1 million. Landfill turnover was up 51.5% to 113.2 million generating PBITA of 20.1 million, up 101%. Turnover from the special waste division was up 26.4% to 27.8 million, with profit doubled at 3.6 million.
Depots merged
On the integration of UK Waste into Biffa, Severn Trent said this is “proceeding well”. Mr Arculus said: “Head Office functions have been combined, fourteen depots merged, the vehicle fleets rationalised and all sites and treatment plants transferred to common systems. Synergies already delivered will be worth 11 million in a full year and Biffa remains confident of achieving synergies of at least 15 million p.a. when the integration is completed by March 2002. However the compelling reason for Biffa acquiring UK Waste is the growth potential of the combined businesses and their strategic fit together in the most attractive waste market in Europe.”
He added: “Biffa is now the UK’s largest single supplier of integrated waste management services. In a business where transport logistics management is a key skill, the acquisition of UK Waste has added further economies of scale to Biffa’s already highly successful industrial and commercial collection business. It has also enhanced the efficiency of the landfill operation by adding eight large scale sites, increasing Biffa’s landfill void bank and its power generation capacity. As the EU Landfill Directive seeks over time to divert waste away from landfill, UK Waste further strengthens Biffa’s capabilities in recycling and waste treatment.”
The full results can be seen at Severn Trent.
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