Biffa PLC slumps to loss but remains bullish on recovery

Biffa PLC (LON:BIFF) slumped to a full-year loss but said it is encouraged with the performance recovery seen in recent months.

The waste firm said it will benefit from the economic rebound that is emerging follow the easing of lockdown restrictions and from the acquisitions it has made, such as the addition of CSG in February.

READ: Biffa buys bin collections business from Viridor for £126mln

It is now pursuing new store openings, with plans to outlet numbers over the next three to four years to grow revenue and underlying earnings (EBITDA) by a further 50%.

It recently agreed terms to acquire Scotland’s only post-consumer plastics recycling facility from Green Circle Polymers for £10mln.

This will add an extra 50,000 tonnes of treatment capability and is expected to play a role in the Scottish Government’s Deposit Return Scheme which comes into effect in July 2022. 

Biffa has also agreed to acquire the Collections business and certain Recycling assets from Viridor, with the view to expand its Industrial and Commercial capabilities. The deal, which will be immediately earnings enhancing, will complete no earlier than August.

In the year to 26 March, revenue tumbled by a tenth to £1bn while the group slumped to a £52mln statutory loss before tax from a £56mln profit the year before.

Net debt widened 7% to £456mln and the company didn’t declare a dividend.

Analysts at Peel Hunt said their target price remains 305p, which was increased from 290p at the time of the Viridor acquisition.

“We think this rating can move higher, especially if the quality of earnings improves with fewer adjusting items as seems likely in a more normal economy,” they commented.

Shares rose 6% to 310.01p on Tuesday morning.

–Adds analyst comment, shares–