Renewi PLC on Thursday said revenue and profit had slipped in its latest financial year, as the company announced the disposal of its UK Municipal business in an effort to prioritise its European operations.

For the year ended March 31, the Milton Keynes-based waste management company reported €68.0 million in underlying pretax profit, down 35% from €105.2 million a year prior.

Revenue for the year dropped 0.9% to €1.69 billion from €1.70 billion.

Underlying earnings before interest, tax, depreciation and amortisation fell 9.1% to €232.3 million from €255.6 million.

Given this drop in profit, underlying earnings per share sank to 61 cents from 89 cents.

Renewi recommended a final dividend of 5 cents per share, the company’s first dividend since 2019.

Following a strategic review of its portfolio, Renewi has agreed to sell its UK Municipal business to Biffa Ltd, a waste management firm headquartered in High Wycombe.

Renewi’s UK Municipal business comprises five waste processing contracts for local authorities across England and Scotland, the longest of which runs until the 2040s.

As its only UK operation, and given the ‘limited operational or strategic synergy’ this has with the rest of the firm’s activities, Renewi said the disposal will allow it to focus on its core activities in the Benelux region, while expanding its Maltha, Coolrec and Mineralz & Water specialties businesses.

Chief Executive Officer Otto de Bont said: ‘The sale of UK Municipal to Biffa is a transformational milestone which marks the beginning of a new chapter for Renewi. The exit of UK Municipal will immediately improve our cashflow and profit margins, and enable us to drive sustainable growth.

‘We will now fully focus on growing in Europe’s most attractive and advanced recycling markets. Biffa’s financial position, operational expertise, and presence in the UK municipal landscape make them the right new home for our UK Municipal business and we are confident this transaction benefits all stakeholders.’

Renewi expects the divestment to immediately increase its free cash flow by between €15 and €20 million per year, which fell 4.5% to €69.6 million in financial 2024.

The net cost of the sale is expected to be around €57 million, Renewi said, with a total cash impact of €154 million including transaction costs.

The divestment is anticipated to complete by the end of 2024.

Shares in Renewi were down 1.0% at 627.01 pence each in London on Thursday morning.

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