25th Sep 2020 08:28
(Alliance News) - Pennon Group PLC on Friday said it expects the Covid-19 pandemic to hurt revenue for the current financial year to the tune of GBP10 million as it noted progress on its debt restructuring programme.
The FTSE 100 water firm stated that while revenue from household water usage went up, this was offset by a large reduction in water usage from businesses and commercial customers. It added that its Business-to-Business retailer Pennon Water Services has continued to work to minimise bad debt risk through the implementation of cash collection initiatives, highlighting that cash collections across the group has remained "robust".
Pennon said South West Water remains on track to deliver continued return-on-regulated-equity outperformance, driven by efficient financing and total expenditure as it added that delivery of the unit's GBP1 billion investment programme to 2025 to improve services for customers, protect and enhance the environment, and strengthen resilience is underway.
South West Water has signed a new GBP30 million finance lease with a deferred draw-down period and a margin in line with those seen pre-Covid-19. A maturing GBP30 million lease has also been extended.
In July, the Exeter-based company completed the sale of its Viridor waste management business to private equity group Kohlberg Kravis Roberts & Co LP for GBP4.2 billion. It is using some of the GBP3.7 billion net proceeds to pay off GBP900 million in debt with about two-thirds of the amount repaid so far. It has also paid GBP36 million into its pension schemes.
It said it was considering what to do with the rest of the money, stating that "any use of capital to pursue an investment opportunity will be compared with the alternative of returning that capital to shareholders".
Shares in Pennon were trading 0.4% lower a 1,036.00 pence each on Friday morning in London.
By Ife Taiwo; [email protected]
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