28th Nov 2013 08:56
LONDON (Alliance News) - Environmental utility infrastructure company Pennon Group PLC Thursday reported an increase in profit and revenue for the first half, boosted by its water business.
The company, which owns South West Water, posted pretax profit of GBP110.9 million for the six month period ended September 30, up 3.5% from GBP107.1 million a year earlier. The water arm saw a 7.6% increase in pretax profit to GBP87.3 million from GBP81.1 million in 2012.
Viridor, the company's struggling waste management, business saw pretax profit decline 29% to GBP15.3 million from GBP21.5 million a year earlier, despite rising revenue, as the division was hit by an increase interest charge from higher provisions.
Group revenue rose to GBP667.0 million during the period from GBP633.7 million a year ago, attributed largely to a strong performance from South West Water which services Cornwall, Devon and small areas in Dorset and Somerset.
The water division posted a 4.9% increase in revenue to GBP269.1 million from GBP256.5 million, due in part to tariff increases and new connections.
Pennon said it would freeze tariffs for 2014/15 for South West Water's customers. There also will be no average bill increase in 2015/16, Pennon said.
The waste management division, which undertakes waste collection and landfill disposals, reported revenue of GBP398.2 million, up 5.3% from GBP378.1 million in 2012.
Recycling revenue decreased by GBP5.5 million due to lower prices, while landfill revenue grew by the same amount due to higher landfill tax and construction revenues were up, reflecting growth in assets under construction.
Despite the division's struggles, Pennon said it expects Viridor to have a 15% market share by 2020 with network of strategic facilities which will underpin the company's long term profit growth.
It said it also hopes to transform the division's fortunes by building its energy-from-waste business and securing base-load contracts
Pennon will pay an interim dividend of 9.39 pence up 7.2% from 8.76 pence.
In early trading Thursday, Pennon shares were up 1.7% at 649.00 pence per share.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
Copyright © 2013 Alliance News Limited. All Rights Reserved.
Related Shares:
Pennon