Waste management firm Biffa PLC (LON: BIFF) rallied on the posting of the company’s latest results, which showed that the company had posted a profit for the full-year.
The Company announced that their industrial and commercial division had delivered a ‘very strong’ year of organic and acquisition growth alongside further reduction in customer churn, which led the company’s growth in underlying profit.
The firm’s underlying organic revenue growth increased 3.2% in its industrial and commercial sector, which was brought about by new customer wins of Busy Bees, Kingspan Group and National Trust.
For the year ending March 29th, Biffa’s underlying pre-tax profits jumped 7.4% to £74 million, while revenue rose 4.4% to £1.03 billion. However, on a statutory basis the Company’s pre-tax profits fell to £21.5 million from £38.3 million. This was caused by costs and expenditure weighing down performance, in areas related to acquisitions, amortisation and changes in landfill provisions totalling £42.5 million.
Biffa comments
“Our I&C Division performed particularly well. We’ve had another very strong year of organic and acquisition growth coupled with a further reduction in customer churn. When we combine this with our unrelenting focus on driving operational performance improvement, this feeds through to improved underlying I&C margins,” said Biffa Chief Executive, Michael Topham.
“I&C completed seven acquisitions spread across a wide area of the country, demonstrating the strength of our platform into which we can consolidate acquisitions. We have now completed 17 acquisitions since our IPO in October 2016. The pipeline of potential targets remains strong, and we expect to make further acquisitions in the coming year.”
“Our strategic priorities are clear – growing our I&C collections business and investing in recycling and energy from waste assets – and in view of this I have decided to reorganise the Group into two divisions – Collections and Resources & Energy. This will provide a more efficient, focused structure and position us for growth in the areas where we have advantaged positions.”
Trading update
Following the announcement, the Company’s shares have rallied 2p or 0.88% to 228p per share on Thursday morning 06/06/19 12:02 GMT. Analysts from Numis and Peel Hunt reached a consensus in their respective ‘Buy’ ratings on Biffa stock.
