Biffa said on Wednesday that full-year earnings would come in ahead of expectations, after the third national lockdown had less of an impact than feared.
Updating on full-year trading, the waste management firm said the group’s second-half performance had been ahead of base case expectations, “with the impact of the third lockdown on earnings less severe than originally anticipated”.
Third-quarter revenues were at 97% of the levels seen in the prior year, and at around 92% for the final three months of the year.
Volumes in its industrial and commercial unit stabilised at around 80% of prior year levels in the fourth quarter – higher than the initially predicted range of 70% to 75% – with all other areas performing in line with previous guidance.
The stronger-than-expected revenues meant that provisions put aside for doubtful debts were able to be released in the fourth quarter.
Biffa said: “As a result, underlying earnings before interest and tax for the 2021 full year, while still materially impacted by the pandemic, are now expected to be well ahead of the board’s previous expectations, in the range of £42m to £44m.”
Consensus for underlying EBIT is currently around £33.8m.
The update boosted Biffa’s shares and by 0845 GMT, the stock was trading 7% higher at 275.0p.
Looking ahead, the FTSE 250 firm – which last week announced it had acquired food waste specialist Company Shop Group in a £82.5m deal – said it was “increasingly well placed” with leadership positions in various key markets.
“The group is excited by the growth opportunities it sees and will continue to invest to build a resilient, more sustainable business, well positioned for a strong post pandemic future,” it added.
Results for the year to 26 March 2020 are scheduled to be released in May.
