Biffa plc
RESULTS FOR THE 52 WEEKS ENDED 26 MARCH 2021
RESILIENT PERFORMANCE, RESOURCEFUL FUTURE
1 June 2021
Biffa plc ('Biffa', 'the Group' or 'the Company') (LSE: BIFF), the UK's leading sustainable waste management company, announces its results for the 52 weeks ended 26 March 2021.
Michael Topham, Chief Executive of Biffa, said:
“ I'm extremely proud of the way the entire team responded in what has been a defining year for Biffa. We were able to protect our people and continue to provide the essential services on which society depends, while taking decisive action to strengthen the finances of the Group and continue to invest for the future. It has been a year none of us want to repeat but certainly one which showed us at our best.
We are pleased to have been able to end the financial year with results ahead of our expectations. We are strongly positioned for the post-pandemic recovery with leadership positions in our core markets, a well-developed investment programme and exciting growth opportunities ahead, leveraging the Group's unique position at the heart of the circular economy.
Adding to the progress we made in the year, the recent announcement of our agreement to acquire Viridor's collections business and certain recycling assets is another significant step for Biffa, further accelerating the delivery of our growth strategy.”
Business Highlights
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Swift and decisive action taken from the outset of the pandemic focusing on protecting the health, safety, and wellbeing of our people, ensuring minimal disruption for customers and protecting the Group's financial strength |
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Continued strategic delivery, supported by equity raise in June 2020, with just over £350m since committed and £425m committed since the September 2019 Capital Markets Day across our core investment areas: |
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Reduce : The Company Shop Group ('CSG') acquisition expanded our offering into commercial surplus redistribution and improves our capability to support customers' waste reduction and recycling targets |
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Recycle : Progress in consolidating Biffa's leading position in plastics recycling with additional investments in Seaham, Washington, and Aldridge |
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Recover : Newhurst and Protos energy from waste ('EfW') construction projects commenced and are on track |
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Collect : Simply Waste and Ward Industrial and Collections (I&C) acquisitions strengthened Biffa's leadership position in the I&C market |
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Strategic delivery further accelerated by recent announcement of the agreement to acquire the Collections business and certain Recycling assets from Viridor for a cash consideration of c. £126m, plus c. £17m of IFRS 16 leases assumed. This expands Biffa's I&C collections business and recycling capabilities, broadening our customer base, and solidifying our leading position in UK sustainable waste management |
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Further delivery of our sustainability strategy including the launch of the UK's largest fleet of electric refuse vehicles in Manchester and a reduction of greenhouse gas emissions by 17% over the last year and 40% over the last five years |
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Strongly positioned for post-pandemic recovery with leadership positions in core markets and a well-developed investment programme, underpinned by an encouraging recent trading performance; full year expectations (excluding impact of Viridor transaction) unchanged |
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Financial Highlights
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A resilient financial performance achieved in the year despite the impact of pandemic lockdowns |
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The Collections division was significantly impacted in H1 due to temporary closures of many I&C customers with Q1 volumes dropping to c. 50% of the prior year, followed by a solid recovery across the balance of year, with full year volumes at 82% of the prior year |
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The Resources & Energy ('R&E') division was particularly impacted in its Inerts business which also saw volumes drop to c. 50% of prior year levels in Q1. Volumes subsequently recovered to c. 80% of prior year. Other short-term pandemic related impacts included reduced commercial food waste volumes and depressed plastic prices |
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Due to proactive measures implemented by the Group, Group EBITDA margin excluding adjusting items held up well at 13.3% (FY20 15.0%) despite the markedly lower revenues and volumes |
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Group EBIT excluding adjusting items at £44.2m (FY20 £90.5m) was marginally ahead of the guided range of profit messaged in the 3 March 2021 Trading Update |
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Statutory loss before tax of £52.8m (FY20: profit £56.4m). The main items contributing to this total were asset impairment charges relating to the Poplars AD plant (£8.2m) and the IT replacement project (£13.7m); an uplift of the onerous contract provisions of £10.3m; the decrease in the real discount rate on provisions of (£20.6m); and an increased level of amortisation of acquisition intangible assets (£27.4m) ; these are not included in the business performance excluding adjusted items metrics |
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Statutory leverage (3.3x) and bank leverage ratio (2.2x) reflect another period of strong cash management. This leaves the balance sheet well positioned ahead of the Viridor acquisition, with bank leverage expected to return to c. 2.0x within 12-18 months of completion of the acquisition |
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Financial performance underpinned by significant support and sacrifice from key stakeholders including dividend and bonus suspension, pay reductions for leadership, pay freezes and furlough support of £12.0m for up to 1,800 employees furloughed for various periods in the year. Due to the impacts of Covid-19 on the business, the Board is not recommending a final dividend for the FY21 year |