Biffa PLC bags higher profits as recycling rises
Underlying operating profits surged 12% reaching £45.7mln thanks to new contracts and acquisitions in its collection division
Waste manager () piled up the profits amid an ongoing push towards recycling in the UK.
Half-year underlying income surged 12% to £45.7mln, with margins rising to 7.7% compared with 7.4% a year ago.
Biffa is the UK’s biggest collector of commercial waste and interim revenues increased by 8.3% to £594.6mln driven by an uptick in collections and recycling in the six months to September.
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Growth in recycling was both organic and acquisitive, with Biffa acquiring four small businesses this year that brought in £10mln in annualised revenues.
Biffa also won new collection contracts with holiday parks owner Away Resorts and boutique hotels group Malmaison.
The share price has stormed ahead this year, reaching a year-high in October as China announced an import ban on recycled products leading to more of the UK’s waste plastics being recycled here.
The company is also working on two Energy-from-waste projects in Leicestershire and Cheshire.
Broker Peel Hunt downgraded Biffa to ‘add’ from ‘buy’ but upped the target price to 260p, encouraged by profits that “more than compensate for the known headwinds of higher landfill charges, lower landfill ROC income and lower landfill power generation”.
Early deals on Monday boosted Biffa’s share price by 1% to 250p.
Michael Topham, chief executive of Biffa, said “as a result of the sustained progress, and despite the uncertain political and economic environment, our full year expectations remain unchanged.”