Biffa sees signs of driver shortage easing after rubbish collection delays

Waste collection giant Biffa has said there are signs the lorry driver shortage is easing after households across the UK have suffered months of delays to rubbish services caused by the crisis.

The group, which collects waste for more than 30 councils across the country, said it had hiked pay to retain and recruit drivers after suffering disruption to its services from a shortfall in drivers of its rubbish trucks.

The HGV driver shortage left at least 18 councils experiencing delays to their rubbish collections earlier in the autumn.

Biffa said it had been forced to temporarily halt some council rubbish services due to the driver issues, with the group also hit by vehicle, fuel and container shortages.

But it said it had “seen signs of stabilisation in recent weeks”.

“Close and ongoing management of these issues continues,” it added.

The group said: “Like most businesses, we have been affected by supply chain challenges impacting the UK economy, including shortages of HGV drivers, vehicles, fuel and waste containers.

“We responded decisively to the challenges in the driver market by offering increased pay, amongst other measures.”

It added it would be hiking prices for its services across the second half of its year to March as it faces pressure from rising costs due to the supply chain troubles.

The comments came as Biffa said first-half underlying earnings had nearly recovered to levels seen before the pandemic struck.

It reported adjusted operating profits of £45.4 million for the six months to September 24, down 0.7% on a two-year basis, while revenues lifted 2.5% versus 2019-20 with acquisitions stripped out.

Pre-tax losses narrowed to £25.6 million from £52.5 million a year ago.

But shares fell more than 10% despite its post-Covid rebound.

Michael Topham, chief executive of Biffa, said: “During the first half of the year we have successfully restored Biffa’s adjusted operating profit to full-year 2019-20 levels, managed the impact of the supply chain challenges that are affecting the entire economy, and continued to make good progress in delivering our strategic priorities.”

He added: “Whilst like all businesses we are currently experiencing some cost inflation, most of our business has a level of pricing flexibility meaning we are well placed to mitigate these pressures.”

Biffa said it remained in line with guidance for the full-year, which was upgraded in July after the reopening of the wider economy boosted trading.

It said at the time that annual underlying earnings were set to be 10% higher than previously guided.