The interim results for the six months to 30 September 2001, which were released today, show that turnover of Biffa Waste Services increased by 64.9% to 252.4 million. The increase in turnover was matched by an increase in profits of 120.4%. Profits before interest, taxation and goodwill amortisation, for the half-year was 35.7 million (16.2 million).
While Biffa's overall results were impressive the figures were affected by poorer results in Belgium due to a rise in landfill costs and turnover in the UK increased by an extra 10%. In the UK, turnover increased by 73.5% to 230.6 million and profit before interest, taxation and goodwill amortisation up 140.8% to 35.4 million.
On the integration of UK Waste, Biffa reported that the merger has been substantially completed and was on track to deliver 15 million a year of cost savings once completed. Results from the enlarged business benefited from an estimated 7 million of synergies in the half-year, derived from the integration of UK Waste.
The report concluded: “Performance from the UK business was excellent, reflecting underlying growth in addition to the benefit of the acquisition of UK Waste.” Biffa achieved an estimated underlying profit growth of around 11%, maintaining a record of growing profits in the UK in eight of the last nine years.
UK Waste
Robert Walker, Severn Trent group chief executive, said: “Our growth businesses, Biffa and Severn Trent Services, both produced good results and benefited from integration of business acquisitions completed in the second half of last year. We are particularly pleased with the success of our acquisition of UK Waste in September 2000.”
Mr Walker added that while Biffa is well positioned in the waste market, there were a number of key issues that need to be resolved and expressed concern about the slow pace at which European Waste Directives are being implemented in the UK. But Mr Walker praised the government's plans and said: “We welcome the government's initiatives announced at the recent waste summit and look forward to faster progress in moving from low cost waste disposal to a planned resource management activity as the UK catches up with Europe's recycling levels.”
The company noted that landfill volumes were up 46% and average unit revenues were up 35%. The increase reflected the higher average unit revenues achieved in the UK Waste landfills where 70% of volumes are secured on long-term contracts. Income also rose as a result of the foot-and-mouth crisis. Profits from the landfill division before tax was up 147%.
The special waste division, which includes power generation, achieved a 200% increase in profit before interest, taxation and goodwill amortisation. And industrial and commercial collection volumes were up 61% and average unit revenues increased by 5.5%.
But in Belgium, Biffa's profit before interest, taxation and goodwill amortisation fell by 1.2 million to 0.3 million. This result was attributable to problems in the collection division and an increase in disposal costs as restrictions on landfill sites saw the use of more expensive disposal options.
The full results can be seen at
Severn Trent.
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