Biffa plc
FY22 HALF YEAR RESULTS
STRONG FIRST HALF PERFORMANCE
REVENUE AND ADJUSTED OPERATING PROFIT RESTORED TO FY20 LEVELS,
FULL YEAR EXPECTATIONS REAFFIRMED AND DIVIDEND REINSTATED
18 November 2021
Biffa plc ('Biffa', 'the Group' or 'the Company') (LSE: BIFF), the UK's leading sustainable waste management company, announces its half year results for the 26 weeks ended 24 September 2021.
Michael Topham, Chief Executive of Biffa, said:
“During the first half of the year we have successfully restored Biffa's adjusted operating profit to FY20 levels, managed the impact of the supply chain challenges that are affecting the entire economy, and continued to make good progress in delivering our strategic priorities.
“The rebound in business performance, with volumes and pricing across most areas of the business at or above FY20 levels, is testament to the resilient characteristics of our business model and the commitment of our team. Whilst like all businesses we are currently experiencing some cost inflation, most of our business has a level of pricing flexibility meaning we are well placed to mitigate these pressures.
“Our significant investment programme across circular economy infrastructure projects has continued at pace, including commissioning our new plastics recycling facilities, integrating recent collections acquisitions, opening new surplus redistribution outlets and continuing construction of our energy recovery facilities. Together these investments will provide the UK with essential green economy infrastructure and services, whilst giving Biffa a solid platform for sustainable growth.
“We remain pleased with Biffa's performance and prospects and our expectations for the full year remain unchanged. As a result, we are pleased to have reintroduced the payment of a progressive dividend.”
Financial Summary
|
|
H1 FY22 £m |
H1 FY211 £m |
Change FY22 v FY21 |
H1 FY201 £m |
Change FY22 v FY20 |
|
Statutory Revenue |
671.2 |
482.5 |
39.1% |
588.9 |
14.0% |
|
Net Revenue² |
632.8 |
458.8 |
37.9% |
555.1 |
14.0% |
|
Adjusted EBITDA |
91.3 |
58.3 |
56.6% |
86.8 |
5.2% |
|
Statutory Operating Profit |
(16.7) |
(45.0) |
n/a |
33.9 |
n/a |
|
Adjusted Operating Profit3 |
45.4 |
9.7 |
368.0% |
45.7 |
(0.7%) |
|
Dividend (pence) |
2.20 |
– |
n/a |
2.47 |
n/a |
|
Reported leverage ratio 4 |
3.4 |
2.1 |
n/a |
2.8 |
n/a |
· |
Strong financial results: Adjusted Operating Profit has recovered to FY20 levels with Group revenues in the first half 14.0% higher than during the equivalent period two years ago (H1 FY20) (2.5% excluding acquisitions). When comparing Adjusted Operating Profit in H1 FY22 with H1 FY20, a strong performance in Collections and Recycling has been offset by the expected declining contribution from Inerts and Landfill Gas. Profitability is set to further improve during H2, in line with market guidance. |
· |
Successfully managing supply chain challenges and inflationary pressures: Decisive steps taken to mitigate the impact of supply chain disruptions and HGV driver shortages. The business has significant pricing flexibility to enable mitigation of cost inflation. |
· |
Continued progress on strategic prioriti es: £340.8m has been invested since the September 2019 Capital Markets Day across circular economy infrastructure projects within our four strategic areas: Reduce, Recycle, Recover and Collect. £151.6m of this was incurred in the period, including £123.7m on acquiring the Viridor Collections business and certain recycling assets and integration is on track. |
· |
Adjusting items: Totalled £62.1m in the period (H1 FY20: £11.8m). The main items contributing to this were the impairment of Company Shop Group's (“CSG's”) goodwill (£25.0m) as a result of short term underperformance, acquisition related costs (£5.9m); the decrease in the real discount rate on landfill provisions (£16.8m); and the charge for amortisation of acquired intangible assets (£13.1m). Statutory Operating loss for the period is £16.7m (FY21 H1: 45.0m). |
· |
Cash performance and Net Debt ahead of expectations: Cash management has been better than expected in the period, resulting in leverage being lower than forecast at the time of the Viridor announcement. The Group's sources of funds were also broadened with the issuance of £150m of private placement notes and we have now converted our revolving credit facility (“RCF”) to a sustainability linked instrument. |
· |
Sustainability Strategy delivery: Key progress areas include improving our methane capture rate in our Landfill Gas business to an industry-leading 85% ahead of the recent COP26 commitments around methane reduction; opening a rail hub for inert waste in East London to further reduce the adverse impacts of road based transportation; retrofitting older trucks with software which will reduce Biffa's CO2 emissions by up to 1,500 tonnes per annum; and increasing Board diversity with the appointment for our third female Board member, Linda Morant. |
· |
Full year expectations reaffirmed and dividend reinstated: The Board is pleased with Biffa's strong performance and the outlook for Adjusted Operating Profit for the full year remains positive and in line with the Board's expectations. As a result, we are pleased to be reintroducing the interim dividend at 2.20p, (FY21:nil, FY20:2.47p) and are committed to paying a progressive dividend moving forward. |