The trading update for the six months ended 25 September shows that the company’s earnings before interest, taxes, depreciation and amortization (EBITDA) have grown to £67.2 million, a £10.9 million boost on 2014.
The update published this morning comes as national news reports suggest that the company’s shareholders are seeking prospective takeover bids of up to £1 billion.
Biffa is seeking offers by the end of today from the industry, with rival waste firm Suez and private equity groups invited to the table, according to Sky News.
It is thought that the company would seek an estimated eight times annual profit from a sale or floatation, meaning an approximate valuation of £950 million.
Takeover
Biffa, which operates a number of waste facilities and municipal collection contracts across the UK, was previously taken over by private equity group WasteAcquisitionco Limitied in 2008 in a deal worth £1.2 billion.
The company was owned by water firm Severn Trent from 1991 until a demerger in 2006.
A prospective takeover of the business comes after a period of relative growth for Biffa.
According to today’s trading update the company’s EBITDA margin has increased from 12.5% to 14.5% in the first half of 2015, while overall revenue has climbed to £465 million, a £14 million boost on the previous year.
Biffa also indicates that all four of its divisions – Industrial and Commercial, Municipal, Resource Recovery and Treatment, and Energy – are all performing ahead of management expectations.
Acquisitons
Biffa has also completed acquisitions of PHS Chemical Waste and Enviroco’s Chemical Treatment Division in 2015 (see letsrecycle.com story).
The additions to its portfolio include Enviroco’s hazardous waste fleet and Sheffield waste transfer facility, and PHS’ Chemical Waste business in Burscough, Stevenage and Atherstone, De-Pack in Loughborough, Recyclite in Attleborough and Spill Control in Tamworth.
Biffa chief executive Ian Wakelin explained the Board now expects underlying EBITDA for the full year to be an estimated £119 million – significantly up on the £109 million posted in 2014.
Commenting on the “very strong operational performance across the Group”, Mr Wakelin said: “Biffa, with its unique service offering, is performing strongly in competitive markets driven by ongoing regulatory and legislative requirements. We are also taking advantage of the drive towards industry consolidation in a highly fragmented market and have a pipeline of exciting opportunities.
“Since a financial restructuring in 2012 Biffa has undergone a significant transformation. These results not only demonstrate the strength of the Group but also provide a strong platform for continued growth building on the Group’s leading and growing market positions.”
When contacted by letsrecycle.com, Biffa and its advisor Rothschild declined to comment on the takeover reports.
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