27th Nov 2015 07:28
LONDON (Alliance News) - Pennon Group PLC on Friday said its profit and earnings both improved in the first half thanks to energy recovery facilities in its Viridor business and a better-than-expected contribution from recently-acquired Bournemouth Water.
The FTSE 250-listed water company, which owns South West Water and waste management business Viridor, along with the recently-acquired Bournemouth Water unit, said its pretax profit for the six months to the end of September was GBP106.8 million, up from GBP100.0 million a year earlier.
Earnings before interest, taxation, depreciation and amortisation for the group rose to GBP231.7 million from GBP200.0 million.
Total earnings for its water business rose, as a decline in the core South West Water business was offset by a higher-than-expected first-time contribution from Bournemouth Water. Operating energy recovery facilities coming on line in its Viridor business helped earnings from that unit more than double in the half.
Revenue declined 0.5%, down to GBP689.1 million from GBP692.3 million, with sales at Viridor falling due to lower construction revenue from service concession arrangements, while revenue in the water business rose, boosted by Bournemouth Water as South West Water revenue declined in line with Pennon's expectations.
Pennon said it will pay an interim dividend of 10.46 pence, up from 9.98p a year earlier, and said it remains on track to meet its expectations for the year to the end of March 2016.
"The water and waste businesses are performing strongly, driving sustainable profit and dividend growth," said Pennon Chairman John Parker.
"Moving towards a more homogeneous risk profile across the group is a strategic priority. We are increasing the proportion of contracted long-term index-linked revenues at Viridor. At the same time, we will continue to invest in growth where it fits with our strategy," he added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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