Source - RNS
RNS Number : 9118J
Biffa plc
15 September 2016
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT.

 

This announcement is an advertisement for the purposes of the Prospectus Rules of the Financial Conduct Authority ("FCA") and not a prospectus and not an offer of securities for sale in any jurisdiction, including in or into

the United States, Australia, Canada, Japan or South Africa.

 

Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Investors should not subscribe for or purchase any ordinary shares referred to in this announcement except on the basis of information in the prospectus in its final form (the "Prospectus") expected to be published by Biffa plc ("Biffa" and, together with WasteHoldco 1 Limited and its subsidiaries and subsidiary undertakings, the "Group") in due course in connection with the proposed admission of its ordinary shares (the "Shares")  to the premium listing segment of the Official List of the FCA and to trading on the London Stock Exchange plc's main market for listed securities (the "London Stock Exchange"). A copy of the Prospectus will, following publication, be available for inspection from the Group's website at www.biffa.co.uk and from Biffa's registered office at Coronation Road, Cressex, High Wycombe, Buckinghamshire, HP12 3TZ, United Kingdom.

 

For immediate release

 

15 September 2016

 

Biffa plc

Intention to Float on the London Stock Exchange

 

Biffa, a leading UK waste management business, today announces its intention to proceed with an initial public offering. Biffa intends to apply for admission of its Shares to the premium listing segment of the Official List of the FCA and to trading on the London Stock Exchange's main market for listed securities (together, "Admission"). Biffa expects that Admission will occur in October 2016.

 

Biffa at a glance

 

·       Leading UK-based integrated waste management business and the second largest waste management services provider in the UK by revenue in FY 20151.

 

·       A 100 year history at the forefront of the UK waste management industry providing collection, processing and disposal of waste and recyclables. Over 95 percent UK postcode coverage, serving 2.4m households with over 7,000 employees.

 

·       Across its operations, the Group manages approximately 6.6 million tonnes (mT) of waste per annum. In FY 2016, the Group's revenue was £927.5 million, its Underlying EBITDA2 was £122.3 million, and its Underlying Operating Profit3 was £62.5 million.

 

·       Completed Q1 2017 trading delivering strong performance across the Group, reporting a 9.2% increase in Net Revenue4 with a 49.2% increase in Underlying Operating Profit3.

 

·       An experienced management team leading a successful strategy of organic and acquisitive growth to continue to build and maintain market leading positions.

 

·       The Group's services are organised across four operating divisions:

 

-      Industrial & Commercial ("I&C") (51.7 percent of FY 16 Group revenue) which provides a wide range of waste services to corporate, industrial, commercial and public sector customers across the UK.

-     Municipal (17.4 percent of FY 16 Group revenue) which predominately offers household waste and recycling collection services to Waste Collection Authority ("WCA") customers as well as other associated services such as street cleansing and green waste collection services.

-      Resource Recovery & Treatment ("RR&T") (21.4 percent of FY 16 Group revenue) which focuses on the treatment, recycling and disposal of waste, including hazardous waste materials.

-     Energy (9.6 percent of FY 16 Group revenue) which comprises the Group's energy production operations from landfill gas and from food waste via anaerobic digestion ("AD") as well as operating a Mechanical Biological Treatment ("MBT") plant in West Sussex.

 

Investment highlights

 

·       Structural market growth which favours Biffa's service-oriented business model: The UK waste market is forecast to grow at a 5.0 percent CAGR to £18.5bn by FY 201, driven by population / household growth, UK regulation requiring further separate collections and treatment and an increasingly complex supply chain, supporting Biffa's strategic positioning. 

 

·      Experienced management team with proven track record:  Biffa's executive management team have 137 years of waste management experience between them with deep industry knowledge. They have delivered successfully on KPIs with a proven financial track record. Significant Net Revenue Growth4 from FY 14 to Q1 17 realised via Organic Net Revenue Growth5 and acquisitions, with a high level of sustained and improving profitability.

 

·       Multiple levers for continued organic growth and margin expansion: Management are undertaking various initiatives to drive organic growth and improvements to margins across all four divisions, with a focus on price management, churn reduction and a programme to modernise IT systems (known as Project Fusion).  New service offerings are also planned to enhance Net Revenue Growth4 while continued focus on reducing the cost of waste disposal, combined with enhancing waste transfer station efficiencies will contribute to further margin expansion. 

 

·       Fragmented market supports further highly synergistic in-fill acquisitions: The UK waste market is highly fragmented with regulation combined with the increasing complexity of the supply chain creating challenges for smaller operators and offering opportunities for Biffa to lead further consolidation. Biffa have completed 20 synergistic acquisitions since December 2013, 17 in I&C, 2 in RR&T and 1 including combined I&C and Municipal services, for a total consideration of £53.4m6. These include Shanks Group's UK Solid Waste business in 2014 and Cory Environmental Municipal Services ("Cory") earlier this year.

 

·    Attractive investment opportunities from control of waste streams: Regulatory requirements for further waste segregation will benefit Biffa, with the opportunity to invest in mid-stream recycling and processing infrastructure. Initiatives in the UK to reach the regulatory target of a 50 percent household recycling rate by 20207 may further increase Biffa's control of separate waste streams and provide the opportunity for further investment. Biffa is ideally positioned to invest in Energy from Waste ("EfW") infrastructure given its high levels of contracted waste (currently 1.4m tonnes of uncommitted waste8).

 

·       Delivered a strong financial performance over the three year track record period: Biffa has delivered strong revenue growth, both organic and acquisitive, over the three year track record period, with underlying EBITDA2 and Underlying Operating Profit3 margin expansion driven by improved pricing discipline, operational efficiencies and acquisition synergies. Continued momentum across the business in Q1 17, with all four divisions performing in line with expectations and volumes collected, processed and landfilled increasing year on year.

 

Ian Wakelin, Chief Executive of Biffa, said:

 

"These are exciting times for Biffa, one of the UK's leading waste management businesses.  The Group has a 100 year history at the forefront of the industry providing collection, processing and disposal of waste and recyclables. 

"We believe there are multiple levers for continued organic growth and margin expansion in a market underpinned by structural growth drivers which favour Biffa's service-oriented business model.  Moreover, we operate in a fragmented market providing opportunities for further highly synergistic in-fill acquisitions.

"We are successfully implementing a three-pronged growth strategy, centred on growing our market presence, broadening our range of services to meet our customers' complex needs and driving efficiencies across the business.   We look forward to continuing to implement this strategy as a public company."

Steve Marshall, Chairman of Biffa, said:

 

"Biffa, led by a highly experienced executive team driving a proven growth strategy, has been successfully positioned to leverage the multiple opportunities that lie ahead in the UK market.  The prize is to further enhance the Group's leading market positions and build significant value for shareholders.  We start from a strong base with a robust and resilient business model centred on a well-invested and integrated waste management platform. 

"I am delighted to be chairing Biffa at this very exciting time for the business as it moves on to the next phase of its development and, along with my fellow Board members, look forward to reporting on our progress as we embark on the next stage of our journey."

Overview of the Business

 

Biffa is a leading UK-based integrated waste management business, and the second largest waste management services provider in the UK by revenue in FY 20151. The Group operates across the breadth of the waste management value chain, including the collection, treatment, processing and disposal of waste and recyclable materials, as well as related work in the production and sale of energy derived from waste and the sale of recovered commodities such as paper, glass, metals and plastic. Biffa's customer base for these services includes local authorities (which include the collection of waste from households), large corporates and small- and medium-sized enterprises ("SMEs"), and purchasers of end-product commodities and energy. The Group's services are organised across four operating divisions:

·     Industrial & Commercial: provides a wide range of services to corporate, industrial, commercial and public sector customers, including waste collection, sorting services for the recovery of recyclable material and transfer of residual waste, and processing and organising waste materials for energy recovery as refuse derived fuel. The Industrial & Commercial division operates a collection network of approximately 1,200 front-line collection vehicles, which operate from 63 depots and 29 transfer stations, with over 75,000 customers as at 24 June 2016. The Industrial & Commercial division contributed 51.7 percent of the Group's revenue, 37.4 percent of the Group's Underlying EBITDA2 (excluding Group costs) and 35.8 percent of the Group's Underlying Operating Profit3 (excluding Group costs) during FY 2016.

·     Municipal: predominately offers household waste and recycling collection services to local authority customers across the UK, as well as various associated waste management services, including street cleansing, management of household waste and recycling centres, and green waste collection services from individual household customers. As at 24 June 2016, Biffa had 36 long-term contracts with 40 local authorities, covering over 2.4 million households. The Municipal division contributed 17.4 percent of the Group's revenue, 16.0 percent of the Group's Underlying EBITDA2 (excluding Group costs) and 11.8 percent of the Group's Underlying Operating Profit3 (excluding Group costs) during FY 2016.

·     Resource Recovery & Treatment: focuses on the treatment, recycling and disposal of waste, including hazardous waste materials. The RR&T division's operational assets include 11 active landfill sites, two large automated materials recycling facilities, a plastics recycling business, soil treatment and composting facilities, and a national hazardous waste collection and treatment network. The RR&T division contributed 21.4 percent of the Group's revenue, 16.0 percent of the Group's Underlying EBITDA2 (excluding Group costs) and 7.1 percent of the Group's Underlying Operating Profit3 (excluding Group costs) during FY 2016.

·     Energy: Biffa is a significant provider of renewable energy with 91.2 megawatts of installed energy generation capacity. Biffa's Energy division comprises the Group's energy production operations from landfill gas and from anaerobic digestion processes, which generate electricity from biodegradable waste material (primarily food waste). The largest unit in Biffa's Energy division is its network of landfill gas operations, in place at 34 landfill sites across the UK, which utilise 94 electricity generators to produce electricity for sale to third parties and use by the Group. Additionally, Biffa's Energy division operates anaerobic digestion energy facilities at three sites, including a mechanical and biological treatment facility that it operates on behalf of West Sussex County Council under a long-term contract. The Energy division contributed 9.6 percent of the Group's revenue, 30.6 percent of the Group's Underlying EBITDA2 (excluding Group costs) and 45.3 percent of the Group's Underlying Operating Profit3 (excluding Group costs) during FY 2016.

 

Market opportunity

 

In FY 2015, an estimated 222mT of controlled waste was produced in the UK. Of this, approximately 198 million tonnes was waste produced by I&C, municipal and construction & demolition waste producers ("Controlled Waste"), which are the subject of EU and UK legislation. Biffa operates in the industrial, commercial and municipal waste sectors, which produced an estimated 84mT of Controlled Waste in FY 2015.

The generation of waste in the UK is dependent on various economic and demographic factors, such as gross domestic product, activity in the manufacturing and service industries, levels of employment and population and household growth. Credo Business Consulting LLP ("Credo") estimates that between FY 2013 and FY 2015 the volume of Controlled Waste in the UK has increased with a compound annual growth rate of approximately 2.4 percent1. Industry growth in recent years has been driven by increased regulation, including for waste segregation, and heightened complexity of the waste supply chain.

Over the same period, the value of the I&C and municipal waste markets, Biffa's primary collection markets, increased rapidly with an estimated compound annual growth rate of approximately 3.7 percent (excluding Landfill Tax), driven primarily by I&C collection activities in the UK waste management services market. The market value of treatment and disposal of waste increased at an even faster rate, with an estimated compound annual growth rate of approximately 5.2 percent according to Credo.

The directors of Biffa (the "Directors") expect increasing levels of regulation to lead to an increasingly complex waste value chain and continued growth in the UK waste management market in the medium term.

 

Operational strengths of Biffa

 

Diversified and integrated operations on a national scale

 

·       Biffa operates across a national footprint, offering an array of waste management services to approximately 75,000 I&C customers and over 2.4 million households, with collection services covering over 95 percent of UK postcodes and facilities in key locations across the country.

 

·       The Group's operations span a range of services, customer types and geographies across the UK, within each stage of the waste management value chain - from collection services, to the treatment, processing and disposal of waste and recyclable materials, as well as the production of energy and sale of recovered commodities.  The Group's scale enables it to invest in innovative technologies, continue developing its waste management expertise and to respond to both changing regulatory and customer demands.

 

·       Biffa's diverse service offering also allows it to integrate operations across the waste management value chain. The Group benefits from strategic integration across its facilities, such as the co-location of depots, transfer stations and processing facilities used by multiple divisions with the four operating divisions supporting each other by providing control over waste flows and security of disposal routes.

 

·       As the Group continues to offer customers a full range of waste management services, and to further integrate its service offerings, the Directors believe that it is well positioned to capitalise on numerous opportunities to generate further revenue from the waste that it handles.

 

Operational and technical know-how

 

·       The Group benefits from an experienced management team, with extensive industry knowledge and specialist skills developed over years of operating in an increasingly complex waste industry, as well as significant technical resources and expertise throughout its operations. This experience and operational knowledgebase supports the Group's current operating activities, and positions it to continue driving operational efficiencies in each of its divisions and developing innovative waste management solutions for its customers.

 

·       The Group's operational know-how has also supported its development of a disciplined approach to evaluating operations, from collection methods and routes to processing and disposal activities. In particular, the Group evaluates key operational indicators and other operational information on a facility-by-facility basis (including, for example, at specific depots, landfill sites, and processing and energy production facilities). Combined with the scale of the Group's operations, which enables it to evaluate best practices across a wide range of activities, this approach allows the Group to analyse performance and respond effectively and in a targeted fashion, driving efficiencies.

 

·       The Directors believe that the Group's extensive industry knowledge will allow it to drive further efficiencies in its current operations and continue to adapt to future changes in the provision of waste collection and processing activities.

 

Merger & Acquisition ("M&A") experience & opportunities

 

·       The Group's management team has developed considerable experience in all the stages of the acquisition process. The Group's focus when sourcing acquisition targets is to identify and deliver earnings-accretive in-fill opportunities, leading to benefits across the Group's operations, such as vehicle utilisation and improvements to route density, higher utilisation of transfer stations, new efficiencies in shared and back-office services, internalisation of sub-contracted work, benefits in procurement activities, and rationalisation of operating properties.

 

·       As a result of this experience and approach to acquisitions, Biffa has delivered considerable value through its M&A activity in recent years, as evidenced by the significant post-integration synergies. The Group's M&A experience is expected to deliver considerable opportunities for Biffa to leverage its scale and experience in the area in the coming years.

 

·       The Directors believe that Biffa is well-placed to participate in future consolidation, with leading positions in many segments and significant experience in identifying and integrating acquisition targets, by capturing future synergies from both in-fill and potential bolt-on acquisitions.

 

Service delivery, reputation and brand

 

·       Biffa has developed a strong reputation for service delivery across its operations, reflected both in customer surveys and key service operating measures.

 

·       The Directors believe the Group's reputation for service delivery and experience in expanding and developing its services to meet changing customer demands helps both win and retain customers while improving operational efficiencies, across the full range of its service offerings.

 

·       The Directors believe that the Group's strong record of service delivery, together with its national presence and history, has led to the Biffa brand becoming one of the most highly recognisable in the UK waste industry and a key asset for the Group.

 

Workforce engagement and safety

 

·       Biffa operates in a highly regulated sector and has a strong record on environmental compliance, continually striving to reduce any negative impacts the business may have on the environment.

 

·       Biffa's people are one of its key assets, and the Group works to ensure it provides a safe and engaging working environment for its employees. Biffa have reduced their Lost Time Injury Frequency rate8 from 0.72 in FY 14 to 0.38 in FY 16, whilst increasing employee engagement (as measured by its annual Aon Hewitt survey) from 40% to 55% over the same period.

 

·       The Directors believe that strong employee engagement and providing a safe work environment are important factors in both attracting and retaining staff, and that they are particularly significant for the Group given its reliance on a large workforce for the delivery of its collection and processing services, as well as those in customer relations and support roles.

 

Headline Financial Information

 

Biffa has delivered strong revenue growth, both organic and acquisitive, in particular in the I&C division. Underlying EBITDA2 and Underlying Operating Profit3 margin have expanded in recent years due to operational improvements in I&C and RR&T, pricing discipline and acquisition synergies. Top line growth and margin improvement has also converted to improved cash performance.

 

Biffa has had a good start to FY 17 with continued momentum in Q1 17 across the business, including the integration of the recently acquired Cory business progressing as planned, with the impact in Q1 17 limited given the acquisition was completed on 8 June 2016 (16 days before quarter end), and a pipeline of potential further M&A targets being considered.

 

£m - March YE

FY 14

FY 15

FY 16

FY 14-16 CAGR

Q1 16

Q1 17

YoY Growth

Statutory Revenue

859.6

878.0

927.5

3.9%

228.3

245.1

7.4%

Net Revenue4

705.2

771.3

830.3

8.5%

201.0

219.5

9.2%

Underlying EBITDA2

96.8

105.1

122.3

12.4%

27.2

35.0

28.7%

Underlying EBITDA2 margin (%)

11.3%

12.0%

13.2%

 

11.9%

14.3%

 

Underlying Operating Profit3

33.6

49.1

62.5

36.4%

13.0

19.4

49.2%

Underlying Operating Profit3 margin (%)

3.9%

5.6%

6.7%

 

5.7%

7.9%

 

 

Capital Structure and Dividend Policy

 

Post Admission, Biffa intends to maintain leverage at a level appropriate for the business, while retaining flexibility to pursue its in-fill M&A strategy. Biffa has arranged with a syndicate of banks to put in place upon listing a new term loan of £200m and an undrawn revolving facility of £100m, both of which terminate in October 2021. Additionally Biffa will have an accordion facility available for M&A financing.

 

The Board intends to adopt a progressive dividend policy for Biffa to reflect its earnings potential and cash flow characteristics, while allowing it to retain sufficient capital to fund ongoing operating requirements and to invest in the Group's long-term growth. The Board may revise the dividend policy from time to time. The Group intends to pay annual dividends based on a targeted dividend payout ratio of approximately 35 percent of the Group's consolidated annual underlying post-tax profit.  The first dividend payment post Admission is expected to be a final dividend in respect of the period between Admission and the end of FY 2017, expected to be paid following approval of the year end accounts at the annual general meeting of Biffa, likely to be held in July 2017. Following this, Biffa intends to pay interim dividends in December in the relevant financial year and final dividends in July of the following financial year, with the amount being paid in an approximate one-third (interim) and two-thirds (final) split.

 

Overview of the Offer

 

Biffa intends to apply for admission of the Shares to the premium listing segment of the Official List of the FCA and to trading on the London Stock Exchange's main market for listed securities.

The Offer will comprise an offer of Ordinary Shares: (i) to institutional investors in the UK and elsewhere outside of the US in reliance on Regulation S under the U.S. Securities Act of 1933, as amended (the "US Securities Act") and in accordance with locally applicable laws and regulations, and (ii) in the US only to persons who are reasonably believed to be "qualified institutional buyers" (as defined in Rule 144A under the US Securities Act) in reliance on Rule 144A of the US Securities Act or another exemption from registration under the US Securities Act.

Biffa intends to raise gross primary proceeds of approximately £270 million (the "Offer") from which fees and other IPO related expenses, related to the issue of new ordinary shares in the capital of Biffa to be allotted and issued under the Offer ("New Shares"), will be deducted.

Biffa intends to apply the net proceeds towards a payment of funds to HMRC with respect to the ongoing legacy EVP Claims10 and towards repayment of its current debt facilities to achieve approximately 2.0x Net Debt / LTM11 Underlying EBITDA2 immediately following IPO.

The Offer comprises an offer of New Shares to be issued by Biffa and the expected sale of existing Shares (the "Sale Shares") by the Selling Shareholders12.

It is expected that an over-allotment option will be provided by the Shareholders (including Angelo Gordon, Avenue Capital Credit and Bain Capital Credit)13.

Each existing shareholder (other than each Director) and Biffa is subject to a 180 calendar day lock-up period following Admission, and each of the Directors and members of senior management who hold Shares is subject to a 365 calendar day lock-up period following Admission, in each case during which time they may not, inter alia, dispose of (and in the case of Biffa, issue) any Shares, any interests in Shares or any securities of Biffa that are substantially similar to Shares, including but not limited to any securities that are convertible into, or exchangeable for, or that represent the right to receive, Shares or any such substantially similar securities, without the prior written consent of the Joint Global Co-ordinators (on behalf of themselves and the other Underwriters) and subject to certain exceptions.

 

It is expected that, following Admission, Biffa will be eligible for inclusion in the FTSE UK index series.

 

In relation to the Offer and Admission, Citigroup Global Markets Limited ("Citi") and J.P. Morgan Securities plc, which conducts its UK investment banking activities as J.P. Morgan Cazenove ("J.P. Morgan"), are acting as Joint Global Co-ordinators, Joint Bookrunners and Joint Sponsors, HSBC Bank plc ("HSBC") is acting as Joint Bookrunner. Peel Hunt LLP ("Peel Hunt") is acting as Lead Manager. N.M. Rothschild & Sons Limited ("Rothschild") is acting as Financial Adviser.

 

Full details of the Offer will be included in the Prospectus expected to be published in due course.

 

Enquiries

 

Joint Global Co-ordinator, Joint Bookrunner and Joint Sponsor

 

Citi:

+44 (0) 20 7986 4000

Edward McBride

 

Alex Carter

 

Peter Brown

 

 

 

Joint Global Co-ordinator, Joint Bookrunner and Joint Sponsor

 

J.P. Morgan Cazenove:

+44 (0) 20 7742 4000

Robert Constant

 

James Deal

 

Wendy Hohmann

 

 

 

Joint Bookrunner

+44 (0) 20 7991 8888

HSBC:

 

Adrian Lewis

 

Greg Hely Hutchinson

 

Stuart Dickson

 

 

 

Lead Manager

+44 (0) 20 7418 8900

Peel Hunt:

 

Indy Bhattacharyya

 

Jock Maxwell Macdonald

 

 

 

Financial Adviser

+44 (0) 20 7280 5000

Rothschild:

 

Adam Young

 

Stuart Vincent

 

William Marshall

 

 

 

Media Enquiries

 

Instinctif (public relations adviser to Biffa):

+44 (0) 20 7547 2020

Mark Garraway

 

Helen Tarbet

 

James Gray

 

 

ADDITIONAL BACKGROUND TO THE GROUP

 

History of the Group

 

Biffa was founded in 1912 and in the 1960s expanded its operations into the industrial waste market. Following a series of acquisitions, and organic growth, into services ranging from collection, treatment and disposal of waste materials, the business was acquired from the Biffa family by industrial services group BET Plc in 1971, after which it was sold to Severn Trent in 1991 for £212 million.

 

In 2006, the Biffa business was demerged from Severn Trent and listed on the London Stock Exchange as Biffa PLC. The business was taken private in 2008 by WasteAcquisitionCo Ltd.-an entity formed by a consortium of investors led by Montagu Private Equity, Global Infrastructure Partners and Uberior Co-Investment Ltd.

 

In 2010, Biffa acquired Greenstar UK, bringing into the Group its significant operations in recycling and municipal waste collection and expanding the Group's commercial and industrial client base, and made certain strategic changes to its senior management team. In 2013, a restructuring of the Group's debts was required, and equity ownership was transferred to a group of Biffa's senior lenders led by Angelo Gordon, Avenue Capital Group and Bain Capital Credit through a scheme of arrangement, resulting in a reduction of the Group's debts.

 

Between 2013 and 2015, Biffa's management team undertook a strategic programme aimed at recapturing lost volumes and market share, improving profitability, and making a series of further acquisitions and investments. Biffa completed the acquisition of the solid waste collections business of Shanks Waste Management Ltd in January 2014, followed by the commercial waste collections business (known as PHS Wastetech) of PHS All Clear Ltd in 2014 and a series of additional small acquisitions in 2015 and 2016, expanding its Industrial & Commercial operations significantly. In September 2015, Biffa acquired PHS Chemical Waste Limited, and in October 2015 it completed its acquisition of the trading assets of Enviroco Limited's Sheffield-based hazardous waste business, following its strategy to expand its capabilities in the RR&T division. In June 2016 it completed the acquisition of Cory, further expanding its Industrial & Commercial operations and increasing the scale of its Municipal business.

 

Board of Directors and Senior Management

 

Biffa is led by an experienced management team with a proven track record who have successfully repositioned the business and are undertaking various initiatives to drive profits. The team have deep industry knowledge and experience in the UK, with 137 years of waste management experience between them. The Board, as set out below, will be led by the Chairman, Steve Marshall. Key individual members of the Board and the senior executive management team are:

 

Board of Directors

 

Name

 

Age

 

Position

Steve Marshall

 

59

 

Non - Executive Chairman

Ian Wakelin

 

53

 

Chief Executive Officer

Michael Topham

 

43

 

Chief Financial Officer

David Martin

 

64

 

Senior Independent Non - Executive Director

Michael Averill

 

65

 

Independent Non - Executive Director

Ken Lever

 

63

 

Independent Non - Executive Director

 

Executive Directors

 

Ian Wakelin

Ian Wakelin was appointed CEO of Biffa in September 2010. He was previously co-founder and Chief Executive Officer of Greenstar UK (2001 to 2010), which was subsequently sold to Biffa in 2010. Prior to joining Greenstar UK, Ian was Managing Director of UK Waste Management, a British subsidiary of America's Waste Management Inc. Prior to that Ian spent 8 years with Arthur Andersen, as a Chartered Accountant.

 

Michael Topham

Michael Topham is Chief Financial Officer, having joined the business in September 2010. He has previously held the roles of Divisional Finance Director and Divisional Managing Director, before being appointed to his current role of Chief Financial Officer in 2013. Prior to joining Biffa, Michael was finance director at Greenstar UK from 2005 to 2010. He trained as a Chartered Accountant with PwC in London, and held positions in both the audit and transaction services practices.

 

Non-Executive Directors

 

Steve Marshall

Steve Marshall was appointed Chairman of the Biffa group in June 2013. He is also chairman of Wincanton Plc and previously Executive Chairman of Balfour Beatty Plc, Non-Executive Chairman of Delta Plc, Torex Retail Plc and Queens' Moat Houses Plc. Steve was previously Group Chief Executive of both Thorn Plc and Railtrack Group Plc, having served as CFO of both companies. His earlier career included a variety of corporate and operational roles at British Oxygen, Black & Decker, Grand Metropolitan Plc (now Diageo Plc) and Burton Group Plc. He is a Fellow of the Chartered Institute of Management Accountants (CIMA) and a member of its governing council.

 

Michael Averill

Michael Averill was appointed as Non-Executive Director the Biffa group in February 2013. He is also chairman of Fishers Services Ltd and Rochford Capital Pty in Sydney and Non-Executive Director of Van Gansewinkel Group in the Netherlands. Michael was previously CEO of Shanks Group Plc from 1994-2007 where he oversaw the growth of the group. Michael was previously Non-Executive Director at Care UK plc (2006-2010) and Speedy Hire plc (2008-2015) and is a Fellow of the Chartered Institute of Waste Management and a former chairman of the Environmental Services Association.

 

David Martin

David Martin was appointed as Non-Executive Director of the Biffa group in August 2016. He is also, since 2013, a Non-Executive Director of Ladbrokes PLC. David was Chief Executive of Arriva, one of the largest bus and train transport services organisations in Europe, from 2006 to December 2015, having formerly been International Managing Director from 1998 to 2005. He remains on their Board. Prior to joining Arriva, David was Director, Operations and Acquisitions at British Bus PLC from 1986 to 1998 and previously was Financial Director at Holyhead group.

 

Ken Lever

Ken Lever was appointed as Non-Executive Director of the Biffa group in August 2016.  He is also a Non-Executive Director of Vertu Motors plc, Blue Prism plc and Gresham House Strategic plc. Until December 2015 Ken was Chief Executive of Xchanging plc, the technology and business services group. Ken has also previously held Board Executive Director positions with Numonyx BV, Tomkins plc, Albright and Wilson plc and Alfred McAlpine plc and was previously Non-Executive Director of iSoft plc and Vega Systems plc. Ken is a Fellow of the Institute of Chartered Accountants having trained with Arthur Andersen. Ken served for six years on the UK Accounting Standards Board between 2006 and 2012.

 

Senior Management Team

Biffa's current senior management, in addition to the Executive Directors listed above, is as follows:

 

Name

 

Age

 

Position

Jeff Anderson

 

55

 

Managing Director - I&C Division

Roger Edwards

 

47

 

Managing Director - Municipal Division

Mick Davis

 

51

 

Managing Director - RR&T Division

John Casey

 

49

 

Managing Director - Energy Division

Keith Woodward

 

62

 

Legal Director and Company Secretary

Jane Pateman

 

58

 

Group HR Director

Steve Jones

 

58

 

Group Procurement and Property Director

David Gooding

 

39

 

Group IT Director

 

The experience and expertise of each of the Senior Management Team is set out below.

 

Jeff Anderson

Jeff Anderson joined Biffa in September 2011 as Managing Director of the Industrial & Commercial division. His previous experience includes the roles of Executive Board Director at Wincanton Plc. and Divisional Board Director at Securicor Plc.

 

Roger Edwards

Roger Edwards was appointed as Managing Director of the Municipal division in October 2010, following the acquisition of Greenstar. Roger was previously Managing Director at Greenstar's municipal division. Roger trained as a quantity surveyor and has over 25 years' experience within the waste industry in commercial, operational and international roles.

 

Mick Davis

Mick Davis is Managing Director of the RR&T division and was appointed in September 2010, following the acquisition of Greenstar. At Greenstar, Mick was Managing Director of the recycling division. Mick trained as a chartered surveyor and has over 25 years' experience within the waste management sector. He has held various senior and board level roles in landfill, recycling, PFI and technology development. Mick is a trustee of the charity Biffa Award.

 

John Casey

John Casey has been Managing Director of the Energy division since October 2008. Prior to joining Biffa, John had an extensive career of technical and general management roles with US-based multinational General Electric.

 

Keith Woodward

Keith Woodward joined Biffa in April 2006 as Company Secretary. Prior to joining Biffa, Keith had in-house experience in the commercial and industrial environment in the roles of Counsel and/or Company Secretary at listed corporates Distillers plc, Berisford International plc and John Mowlem.

 

Jane Pateman

Jane Pateman joined Biffa in December 2010. Prior to joining Biffa, Jane held a number of senior HR Director positions in Centrica and was Group HR Director at Connaught Plc.

 

Steve Jones

Steve Jones was appointed to the position of Group Procurement and Property Director in November 2008. Prior to joining Biffa, he held senior procurement and supply chain roles across a number of blue chip organisations including Dixons Retail, Dunlop Slazenger Sports Group, Smithkline Beecham and Black & Decker.

 

David Gooding

David Gooding was appointed Group IT Director in July 2011 overseeing IT, Process Improvement and Management Information. David has been involved in the waste industry for 10 years.

________________________________________________________

 

NOTES

 

FY 14 ("FY 2014") refers to the 52 week period ended 28 March 2014.

FY 15 ("FY 2015") refers to the 52 week period ended 27 March 2015.

FY 16 ("FY 2016") refers to the 52 week period ended 25 March 2016.

FY 17 ("FY 2017") refers to the 52 week period ended 24 March 2017.

Q1 16 ("First Quarter 2016") refers to the 13 week period ended 26 June 2015.

Q1 17 ("First Quarter 2017") refers to the 13 week period ended 24 June 2016.

 

1.      Source: Credo Report (the report dated 31 August 2016 prepared by Credo Business Consulting LLP at the request of the Group for the purposes of the Prospectus).

2.      Underlying EBITDA defined as the profit earned by the Group before depreciation and amortisation, exceptional items, Amortisation of Acquisition Intangibles, finance costs and income tax expense.

3.      Underlying Operating Profit defined as the operating profit earned by the Group before exceptional items and Amortisation of Acquisition Intangibles.

4.      Net Revenue defined as the Group's revenue less landfill tax with Net Revenue Growth defined as the Group's Net Revenue in the relevant period less its Net Revenue in the prior period.

5.      Organic Net Revenue Growth defined as the Net Revenue Growth in the relevant period, less the Acquisition Net Revenue Growth in that period. Organic Revenue Growth is calculated on the same basis, using revenue in place of Net Revenue in the Net Revenue Growth calculation. Acquisition Net Revenue Growth in any period represents the Net Revenue Growth in the relevant period from (i) acquisitions completed in the relevant period and (ii) acquisitions completed in the twelve months immediately prior to the start of the relevant period up to the twelve-month anniversary of the relevant acquisition date (to the extent such Net Revenue falls in the current period). Acquisition Revenue Growth is calculated on the same basis, using revenue in place of Net Revenue.

6.      Includes purchase price and assumed finance leases. Excludes transaction fees, integration costs and working capital requirements.

7.      Source: (England and Wales) Regulations 2011, Waste (Scotland) Regulations 2012 and Waste Regulations (Northern Ireland) 2011.

8.      Net of RDF utilisation. Uncommitted waste is waste collected by Biffa and for which Biffa controls the destination.

9.      Safety benchmarking measure calculated as the number of lost time injuries occurring in a workplace per 1m hours worked.

10.    The dispute between Biffa Waste Services Limited and HMRC regarding whether or not landfill tax is payable in respect of the regulation layer and/or materials engineered into the void permanently, at landfill sites arising out of HMRC's assessment on 29 May 2013, being the subject of the EVP Proceedings. EVP Proceedings relates to (a) the appeal proceedings relating to the assessment reference 20621201673 of 29 May 2013 of the first-tier tax tribunal reference TC/2014/06132 in connection with the EVP Dispute; and (b) any other proceedings brought by either HMRC or Biffa Waste Services Limited arising out of or in connection with the EVP Dispute, but excluding the amount by which the assessment was ordered to be amended as a result of the Judicial Review Proceedings.

11.    LTM calculated as the 52 weeks to 25 March 16, less the 13 weeks to 26 June 15, plus the 13 weeks to 24 June 16.

12.    Shareholders who sell existing Shares as part of the Offer.

13.    Comprising Botticelli LLC, GL Europe Luxembourg Sarl, GL Europe ASRS Investments Sarl, GL Europe Luxembourg III (EUR) Investments Sarl, GL Europe Luxembourg III (US) Investments Sarl, Sankaty European Investments Sarl and Minot Light Mezz Debt Ltd.

 

Forward Looking Statements

 

This announcement contains "forward-looking" statements, beliefs or opinions. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the control of Biffa and all of which are based on the Directors' current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as "expects", "may", "will", "could", "should", "shall", "risk", "intends", "estimates", "aims", "plans", "anticipates", "continues", "positioned" or "anticipates" or the negative thereof, other variations thereon or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. Forward-looking statements may and often do differ materially from actual results. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Directors or Biffa with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to Biffa's business concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth and strategies of Biffa and the industry in which it operates.

These forward-looking statements and other statements contained in this announcement regarding matters that are not historical facts involve predictions. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing Biffa. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed or implied in such forward-looking statements. In addition, even if the operations, results of operations, financial position and the development of the markets and the industry in which Biffa operates is consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. A number of factors could cause results and developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, competition, changes in regulation and currency fluctuations.

Forward-looking statements may, and often do, differ materially from actual results. Any forward-looking statements in this announcement reflect Biffa's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to Biffa's financial position, operations, results of operations, growth, strategy and expectations. The forward-looking statements contained in this announcement speak only as of the date of this announcement. New factors will emerge in the future, and it is not possible for Biffa to predict what factors they will be. In addition, Biffa cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those described in any forward-looking statements. The Group disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in its expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law, the Prospectus Rules, the Listing Rules or the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.

Each of J.P. Morgan, Citi, HSBC, Rothschild and Peel Hunt (together, the "Banks") and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward looking statements contained in this announcement whether as a result of new information, future developments or otherwise. 

Important Notice

The contents of this announcement, which has been prepared by and is the sole responsibility of Biffa, have been approved by J.P. Morgan and Citi solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000, as amended.

Neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia). Neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly into Australia (other than to persons in Australia to whom an offer may be made without a disclosure document in accordance with Chapter 6D of the Corporations Act 2001 (CTH) of Australia), Canada, South Africa or Japan, to any persons in any of those jurisdictions or any other jurisdiction where to do so might constitute a violation of the relevant laws or regulations of such jurisdiction. Any failure to comply with these restrictions may constitute a violation of United States, Australian, Canadian, South African, Japanese or other applicable securities laws. The Offer and the distribution of this announcement and information in connection with Admission and the Offer may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about, and observe, any such restrictions.

The Shares referred to herein may not be offered or sold in the United States unless registered under the US Securities Act of 1933, as amended (the "Securities Act"), or any securities laws of any state or other jurisdiction of the United States, and may not be offered or sold within the United States unless registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with applicable state law. The offer and sale of Shares referred to herein has not been and will not be registered under the Securities Act. There will be no public offer of the Shares in the United States.

The offer and sale of Shares referred to herein has not been and will not be registered under the applicable securities laws of Australia, Canada, South Africa or Japan. Subject to certain exceptions, the Shares referred to herein may not be offered or sold within Australia, Canada, South Africa or Japan or to, or for the account or benefit of any national, resident or citizen of Australia, Canada, South Africa or Japan. There will be no public offer of the Shares in Australia, Canada, South Africa or Japan.

This announcement is not an offer of, or solicitation of an offer to buy or subscribe for, the securities referred to herein to any person in the United States or any other jurisdiction. This announcement is an advertisement and not a prospectus. Investors should not subscribe for or purchase any transferable securities referred to in this announcement except on the basis of information in the Prospectus intended to be published in due course in connection with the proposed admission of Biffa's Shares to the premium listing segment of the Official List of the FCA and to trading on the main market for listed securities of the London Stock Exchange. Copies of the Prospectus will, following publication, be available for inspection from the Company's registered office at Coronation Road, Cressex, High Wycombe, Buckinghamshire, HP12 3TZ and from the Company's website www.biffa.co.uk.

Any purchase of Shares in the proposed Offer should be made solely on the basis of the information contained in the final Prospectus to be issued in connection with the Offer. Before purchasing any Shares, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Prospectus when published. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its completeness, accuracy or fairness. Before purchasing any Shares, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Prospectus when published.

This announcement is addressed to and is only directed and being communicated at: (A) if in the European Economic Area ("EEA"), persons who are "qualified investors" within the meaning of Article 2(1)(e) of Directive 2003/71/EC (as amended, including by Directive 2010/73/EU to the extent implemented in the relevant member state of the EEA and any relevant implementing measure in each relevant member state) ("Qualified Investors"); and (B) if in the UK, persons who are Qualified Investors and who (i) have professional experience in matters relating to investments so as to qualify them as "investment professionals" under Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"); or (ii) high net worth bodies corporate, unincorporated associations and partnerships or the trustees of high value trusts falling within Article 49(2)(a) to (d) of the Order; and/or (iii) persons to whom it may otherwise lawfully be communicated (all such persons together referred to as "Relevant Persons").

This announcement must not be acted or relied on (a) in the UK, by persons who are not Relevant Persons and (b) in any member state of the EEA, other than the UK, by persons who are not Qualified Investors. Any investment or investment activity to which this announcement relates is available only to (i) in the UK, Relevant Persons and (ii) in any member state of the EEA, other than the UK, Qualified Investors, and may be engaged in only with such persons. Nothing in this announcement constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. If you have received this announcement and you are not a Relevant Person and/or Qualified Investor, as applicable, you must not rely or act upon this announcement or any of its contents.

The Offer timetable, including the date of Admission may be influenced by things such as market conditions. There is no guarantee that the Offer and Admission will occur and you should not base your financial decisions on Biffa's intentions in relation to the Offer and Admission at this stage. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making such investments should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the initial public offering. The value of Shares can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of the Offer for the entity or person concerned. Past performance cannot be relied upon as a guide to future performance.

Each of J.P. Morgan, Citi, Rothschild and HSBC is authorised by the Prudential Regulation Authority (the "PRA") and regulated by the FCA and the PRA in the United Kingdom and Peel Hunt is authorised and regulated by the FCA. They will not regard any other person as their respective clients in relation to the Offer and will not be responsible to anyone other than Biffa for providing the protections afforded to their respective clients, nor for providing advice in relation to the Offer, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

Each of the Banks and any of their respective affiliates, acting as investors for their own accounts, may hold or may, in connection with the Offer, subscribe for or purchase Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Shares and other securities of Biffa or related investments in connection with the Offer or otherwise. Accordingly, references in the Prospectus, once published, to the Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by any of the Banks and any of their respective affiliates acting as investors for their own accounts. In addition the Banks may enter into financing arrangements and swaps in connection with which they or their affiliates may from time to time acquire, hold or dispose of Shares. None of the Banks nor any of their respective affiliates do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

To the fullest extent permitted under applicable law, none of the Banks or any of their respective affiliates, directors, officers, limited or unlimited partners, employees, advisers or agents accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to Biffa or the Group, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

In connection with the Offer, Citigroup Global Markets Limited (the "Stabilising Manager"), or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, over-allot Shares or effect other transactions with a view to supporting the market price of the Shares at a higher level than that which might otherwise prevail in the open market. The Stabilising Manager is not required to enter into such transactions and such transactions may be effected on any stock market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the commencement of conditional dealings of the Shares on the London Stock Exchange and ending no later than 30 calendar days thereafter. However, there will be no obligation on the Stabilising Manager or any of its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be undertaken. Such stabilising measures, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilise the market price of the Shares above the offer price. Save as required by law or regulation, neither the Stabilising Manager nor any of its agents intends to disclose the extent of any over- allotments made and/or stabilisation transactions conducted in relation to the Offer.

In connection with the Offer, the Stabilising Manager may, for stabilisation purposes, over-allot Shares. For the purposes of allowing it to cover short positions resulting from any such over-allotments and/or from sales of Shares effected by it during the stabilising period, it is expected that certain existing shareholders will grant to the Stabilising Manager on behalf of the Banks, an option (the "Over-allotment Option"), pursuant to which the Stabilising Manager may purchase, or procure purchasers for, additional Shares (the "Over-allotment Shares") at the offer price. The over-allotment arrangements may be exercised in whole or in part upon notice by the Stabilising Manager at any time on or before the 30th calendar day after the commencement of conditional dealings in the Shares on the London Stock Exchange. Any Over-allotment Shares made available pursuant to the over-allotment arrangements will rank pari passu in all respects with the Shares, including for all dividends and other distributions declared, made or paid on the Shares, will be purchased on the same terms and conditions as the Shares being issued or sold in the Offer and will form a single class for all purposes with the other Shares.

Certain figures contained in this document, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this document may not conform exactly with the total figure given.

 


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