Biffa PLC reports Protos energy from waste delay, but financials in line

() said the Protos energy from waste (EfW) project has been further delayed but trading for 2019 has been in line with management expectations.

This implies that underlying profit before tax will be £66-67mln, said broker Peel Hunt, compared to £64mln the year before.

Biffa reported continued growth from its rubbish Collections division, with industrial & commercial performing well and market collection prices picking up to fully mitigate the impact of the recently implemented Dutch tax on refused-derived fuel.

READ: Biffa bags higher profits as recycling rises

Resources & Energy saw growth, underpinned by strong recycling business, where there was increasing demand for recycled plastics to mitigate softness in paper markets.

While the Protos EfW project is “taking longer than anticipated and has resulted in a delay to financial completion”, the Newhurst EfW development reached financial close in February and will begin operations during 2023 with Biffa’s investing around £45mln over the next three years.

Biffa said it has not yet seen any meaningful impact from coronavirus and “remains confident in the ongoing strategy and trading performance of the group”.

Peel Hunt maintained its forecasts for 2020 profit of £70.2mln and £71.7mln for 2021, with PET investment returns offsetting the closure of the Westmill landfill site.

Analysts said: “The Protos EfW project has been further delayed. Although macro sensitivity does bring risk, and COVID-19 could affect staffing, particularly in collection, we see our forecasts as robust.”

Peel Hunt’s target price was lifted to 286p from 275p, with an ‘add’ recommendation unchanged.