Biffa plc
Full year forecast reaffirmed
9 March 2022
Biffa plc ('Biffa', 'the Group' or 'the Company'), today issues a trading update ahead of its full year results for the 52 weeks ending 25 March 2022, scheduled to be announced on 16 June 2022.
Current Performance
Trading in the second half of the year has continued to plan, with full year underlying performance due to be in line with the Board's expectations. Group Net Revenues for the eleven months to February 2022 were c.35% higher than FY21 and c.20% higher than FY20. Excluding acquisitions growth has been c.25% and c.10% higher respectively.
In Collections, like-for-like I&C volumes (adjusted for acquisitions) have stabilised slightly above pre-pandemic levels. To date we have successfully offset cost inflation and supply chain challenges with price increases and other measures and the issue of shortage of HGV drivers has also eased in recent months.
In Specialist Services, the Industrial Services business is performing strongly. In Company Shop Group ('CSG') trading has continued to be challenged, but in recent weeks we have started to see an improvement in both membership levels and gross margins.
The Resources & Energy division has benefited from the recovery in both volumes and pricing.
Strategic Update
The Simply Waste and Viridor acquisitions are both trading in line with expectations. Integration is progressing to plan, and we remain on track to deliver our targeted synergies.
In Polymers, our rPET facility is expected to be operating at full pellet capacity as we move into the new financial year, alongside the introduction of the UK Government's Plastic Packaging Tax. Construction of the third rHDPE line in Redcar is underway and, is expected to be operational in FY24.
The construction of both of our Energy Recovery Facilities remains on schedule. Newhurst is expected to commence commissioning in late 2022, with commercial operations scheduled for early summer 2023. Protos will follow around 12 months later.
Underlying cash generation has been strong and leverage at the end of March is expected to be c.3x Adjusted EBITDA (on a post IFRS16 basis) (H1 FY22: 3.4x). The issuance of a further £195m of new 8-, 10- and 12-year private placement notes last month provides additional balance sheet strength. This will leave the £350m RCF undrawn at the year end.
Outlook
The Board is pleased with the performance and underlying resilience of the business . Whilst the Board is mindful of the potential impacts of events in Ukraine, we remain confident of the Group's position and reaffirm the Group's forecast for the current year.