Covid-19, the HGV driver shortage and supply chain issues are creating some “near term” challenges for Biffa, the waste haulier reported ahead of its AGM.
Despite these challenges, the company reported that trading in the first three months of the financial year to April 2021 was “well ahead” of the company's expectations, which it attributed to the faster than expected recovery of the UK economy since Covid-19 restrictions began to lift.
The trading update revealed that group revenues in the first quarter (1 April to 30 June) were 10% higher than during the same period two years ago with recycled commodity prices at the highest levels since 2018.
In addition, industrial and commercial (I&C) volumes during July, adjusted for acquisitions, are recovering from the impact of the pandemic lockdowns, which saw I&C volumes plummet. The company revealed that they are now back to pre-pandemic July 2019 levels.
However the group warned that it is facing “some near-term challenges caused by the national shortage of HGV drivers, which is now being exacerbated by Covid-19 related absences, together with other widely reported supply chain issues,” adding that these were being carefully managed.
The warning comes as councils across the country said this week that waste and recycling services could be cut by the impact of the rising numbers of new Covid-19 infections which is creating significant staff shortages.
Nonetheless the board remains positive. It reported that, provided the reopening of the economy continues on its current pathway, its expects the group's full-year adjusted earnings before tax and interest (EBIT) will be approximately 10% above current market consensus, equating to £87.6m.
It added that it is pleased with Biffa's underlying business performance and remains confident of the group's long-term growth prospects.
