Why Biffa’s chief executive refused to scrap IPO plans despite “fairly tortuous process”
The chief executive of Biffa has described taking the waste management company public this year as a “fairly tortuous process”.
Biffa pushed ahead with its initial public offering (IPO) in October, but was forced to reduce its share price offer from 220p to 180p, meaning a total raise of £210m, down from £270m.
Other companies, including Misys, Pure Gym and TI Fluid Systems pulled their flotation plans, with the EU referendum and a subsequent loss of investor interest blamed.
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Asked why he decided to push through with Biffa’s IPO in these conditions, chief executive Ian Wakelin told City PM: “Our opportunities are very real. And they’re here and now.
“That’s not to say they won’t be around in 12, 24 months’ time, but… we want to get on as a business and execute. And to do that we needed a more prudent capital structure, the ability to raise funds.”
He added: “We won’t be the first, won’t be the last, to go through a fairly tortuous process. I have been convinced for a number of years – and completely remain of the opinion – the right place for Biffa to be is on the public market.”
Biffa today reported its results for the six months to 23 September. Net revenue was up 8.6 per cent to £446.7m, while underlying earnings before interest, taxation, depreciation and amortisation (Ebitda) came in at £71m, up 14.9 per cent.
Read more: Biffa set to float next week after cutting price to save IPO from scrapheap
During the period, the company won contracts for John Lewis, KFC, Next and AB Inbev.
The group also made two acquisitions, and Wakelin said more are in the pipeline. He said Biffa controls around nine per cent of the waste management market.
Biffa’s share price was relatively flat at the time of writing at 175p, down from 180p when it floated on 20 October.
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