LSE:BIFF

Stock Analysis Report

Executive Summary

Biffa plc provides waste management services in the United Kingdom.

Rewards

Trading at 67.3% below its fair value

Earnings are forecast to grow 15.89% per year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 2.9% is not well covered by earnings



Snowflake Analysis

Fair value with limited growth.


Similar Companies

Share Price & News

How has Biffa's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: BIFF has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.4%

BIFF

1.1%

GB Commercial Services

0.9%

GB Market


1 Year Return

29.0%

BIFF

26.2%

GB Commercial Services

8.7%

GB Market

Return vs Industry: BIFF exceeded the UK Commercial Services industry which returned 26.2% over the past year.

Return vs Market: BIFF exceeded the UK Market which returned 8.7% over the past year.


Shareholder returns

BIFFIndustryMarket
7 Day0.4%1.1%0.9%
30 Day-1.4%2.6%-0.5%
90 Day13.5%4.2%0.9%
1 Year33.4%29.0%30.0%26.2%14.3%8.7%
3 Year54.0%41.7%26.2%15.4%18.8%3.6%
5 Yearn/a38.4%16.0%42.6%9.9%

Price Volatility Vs. Market

How volatile is Biffa's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Biffa undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BIFF (£2.48) is trading below our estimate of fair value (£7.58)

Significantly Below Fair Value: BIFF is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: BIFF is poor value based on its PE Ratio (31.6x) compared to the Commercial Services industry average (18.8x).

PE vs Market: BIFF is poor value based on its PE Ratio (31.6x) compared to the UK market (17.2x).


Price to Earnings Growth Ratio

PEG Ratio: BIFF is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: BIFF is good value based on its PB Ratio (1.7x) compared to the GB Commercial Services industry average (2.2x).


Next Steps

Future Growth

How is Biffa forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

15.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BIFF's forecast earnings growth (15.9% per year) is above the savings rate (0.5%).

Earnings vs Market: BIFF's earnings (15.9% per year) are forecast to grow faster than the UK market (12.4% per year).

High Growth Earnings: BIFF's earnings are forecast to grow, but not significantly.

Revenue vs Market: BIFF's revenue (1.7% per year) is forecast to grow slower than the UK market (3.6% per year).

High Growth Revenue: BIFF's revenue (1.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BIFF's Return on Equity is forecast to be low in 3 years time (14.8%).


Next Steps

Past Performance

How has Biffa performed over the past 5 years?

45.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BIFF has high quality earnings.

Growing Profit Margin: BIFF's current net profit margins (1.7%) are lower than last year (2.4%).


Past Earnings Growth Analysis

Earnings Trend: BIFF has become profitable over the past 5 years, growing earnings by 45% per year.

Accelerating Growth: BIFF's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: BIFF had negative earnings growth (-25.8%) over the past year, making it difficult to compare to the Commercial Services industry average (16.1%).


Return on Equity

High ROE: BIFF's Return on Equity (5.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Biffa's financial position?


Financial Position Analysis

Short Term Liabilities: BIFF's short term assets (£315.1M) do not cover its short term liabilities (£331.5M).

Long Term Liabilities: BIFF's short term assets (£315.1M) do not cover its long term liabilities (£614.9M).


Debt to Equity History and Analysis

Debt Level: BIFF's debt to equity ratio (79%) is considered high.

Reducing Debt: BIFF had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: BIFF's debt is well covered by operating cash flow (49.8%).

Interest Coverage: BIFF's interest payments on its debt are not well covered by EBIT (2.1x coverage).


Balance Sheet

Inventory Level: BIFF has a high level of physical assets or inventory.

Debt Coverage by Assets: BIFF's debt is covered by short term assets (assets are 1.1x debt).


Next Steps

Dividend

What is Biffa's current dividend yield, its reliability and sustainability?

2.90%

Current Dividend Yield


Dividend Yield vs Market

company2.9%marketbottom25%2.0%markettop25%5.2%industryaverage2.8%forecastin3Years3.3%

Current dividend yield vs market & industry

Notable Dividend: BIFF's dividend (2.9%) is higher than the bottom 25% of dividend payers in the UK market (1.95%).

High Dividend: BIFF's dividend (2.9%) is low compared to the top 25% of dividend payers in the UK market (5.19%).


Stability and Growth of Payments

Stable Dividend: BIFF has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: BIFF's dividend payments have increased, but the company has only paid a dividend for 2 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (94%), BIFF's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BIFF's dividends in 3 years are forecast to be well covered by earnings (35.2% payout ratio).


Next Steps

Management

What is the CEO of Biffa's salary, the management and board of directors tenure and is there insider trading?

5.6yrs

Average management tenure


CEO

Michael Robert Topham (47yo)

1.3yrs

Tenure

UK£1,398,983

Compensation

Mr. Michael Robert Mason Topham serves as Chief Executive Officer and Director at Biffa Group Limited since September 29, 2018. Mr. Topham had been the Chief Financial Officer of Biffa Group Limited since  ...


CEO Compensation Analysis

Compensation vs Market: Michael Robert's total compensation ($USD1.84M) is above average for companies of similar size in the UK market ($USD1.18M).

Compensation vs Earnings: Michael Robert's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

5.6yrs

Average Tenure

52yo

Average Age

Experienced Management: BIFF's management team is seasoned and experienced (5.6 years average tenure).


Board Age and Tenure

2.3yrs

Average Tenure

61yo

Average Age

Experienced Board: BIFF's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: BIFF insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUK£104,00015 Nov 19
David Gooding
EntityIndividual
Shares40,000
Max PriceUK£2.60
SellUK£101,60014 Nov 19
Jane Pateman
EntityIndividual
Role
Head of Human Resources
Group Human Resource Director
Shares40,000
Max PriceUK£2.54
SellUK£178,50007 Oct 19
Roger Edwards
EntityIndividual
Role
Senior Key Executive
Managing Director of Municipal Division
Shares75,000
Max PriceUK£2.38
BuyUK£19,92630 Jul 19
Richard Pike
EntityIndividual
Role
Member of the Board of Directors
CFO & Director
Shares9,355
Max PriceUK£2.13
BuyUK£155,25001 Jul 19
Roger Edwards
EntityIndividual
Role
Senior Key Executive
Managing Director of Municipal Division
Shares75,000
Max PriceUK£2.07
SellUK£126,65113 Jun 19
David Gooding
EntityIndividual
Shares56,794
Max PriceUK£2.23
SellUK£180,47813 Jun 19
Jane Pateman
EntityIndividual
Role
Head of Human Resources
Group Human Resource Director
Shares80,932
Max PriceUK£2.23
SellUK£248,78113 Jun 19
Jeff Anderson
EntityIndividual
Role
Senior Key Executive
Chief Operating Officer of Collections
Shares111,561
Max PriceUK£2.23
SellUK£183,64513 Jun 19
Roger Edwards
EntityIndividual
Role
Senior Key Executive
Managing Director of Municipal Division
Shares82,352
Max PriceUK£2.23
SellUK£294,01213 Jun 19
Michael Robert Topham
EntityIndividual
Role
Chief Executive Officer
CEO & Executive Director
Shares131,844
Max PriceUK£2.23
SellUK£183,64513 Jun 19
Mick Davis
EntityIndividual
Role
Senior Key Executive
Chief Operating Officer of Resources & Energy
Shares82,352
Max PriceUK£2.23
BuyUK£4,69514 Jan 19
Richard Pike
EntityIndividual
Role
Member of the Board of Directors
CFO & Director
Shares2,458
Max PriceUK£1.91
BuyUK£84,58017 Dec 18
David Gooding
EntityIndividual
Shares43,002
Max PriceUK£1.99

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Richard Pike (49yo)

    CFO & Director

    • Tenure: 1.3yrs
    • Compensation: UK£535.28k
  • Roger Edwards (50yo)

    Managing Director of Municipal Division

    • Tenure: 9.2yrs
  • Jane Pateman (61yo)

    Group Human Resource Director

    • Tenure: 9yrs
  • Michael Robert Topham (47yo)

    CEO & Executive Director

    • Tenure: 1.3yrs
    • Compensation: UK£1.40m
  • Jeff Anderson (58yo)

    Chief Operating Officer of Collections

    • Tenure: 8.3yrs
  • Mick Davis (54yo)

    Chief Operating Officer of Resources & Energy

    • Tenure: 9.3yrs
  • Rachael Hambrook

    General Counsel

    • Tenure: 3yrs
  • Sarah Parsons

    Company Secretary

    • Tenure: 0.4yrs
  • Mike Thair

    Director of Business Development & Treatment

    • Tenure: 0yrs

Board Members

  • Ken Lever (66yo)

    Independent Director

    • Tenure: 3.3yrs
    • Compensation: UK£187.10k
  • Carol Chesney (56yo)

    Independent Non-Executive Director

    • Tenure: 1.4yrs
    • Compensation: UK£41.07k
  • Michael Charles Averill (68yo)

    Independent Non-Executive Director

    • Tenure: 3.3yrs
    • Compensation: UK£57.00k
  • David Martin (68yo)

    Senior Independent Non-Executive Director

    • Tenure: 0yrs
    • Compensation: UK£57.00k
  • Richard Pike (49yo)

    CFO & Director

    • Tenure: 1.3yrs
    • Compensation: UK£535.28k
  • Michael Robert Topham (47yo)

    CEO & Executive Director

    • Tenure: 1.3yrs
    • Compensation: UK£1.40m
  • Gab Barbaro

    Independent Non-Executive Director

    • Tenure: 0.9yrs
    • Compensation: UK£12.50k

Company Information

Biffa plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Biffa plc
  • Ticker: BIFF
  • Exchange: LSE
  • Founded: 1912
  • Industry: Environmental and Facilities Services
  • Sector: Commercial Services
  • Market Cap: UK£620.000m
  • Shares outstanding: 250.00m
  • Website: https://www.biffa.co.uk

Number of Employees


Location

  • Biffa plc
  • Coronation Road
  • Cressex
  • High Wycombe
  • Buckinghamshire
  • HP12 3TZ
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
86BBST (Boerse-Stuttgart)YesOrdinary SharesDEEUROct 2016
BIFFLSE (London Stock Exchange)YesOrdinary SharesGBGBPOct 2016
BIFFLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPOct 2016
BFFB.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDOct 2016

Biography

Biffa plc provides waste management services in the United Kingdom. The company operates through four divisions: Industrial & Commercial, Municipal, Resource Recovery & Treatment, and Energy. It is involve ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/10 22:58
End of Day Share Price2019/12/10 00:00
Earnings2019/09/27
Annual Earnings2019/03/29


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.