27th Sep 2019 07:57
(Alliance News) - Pennon Group PLC on Friday said it intends to review its options following good performance from its Viridor and South West Water units.
However, Pennon did say revenue is expected to return to a "more normal" level in the first half, ending September, of its current financial year.
Pennon intends to "conduct a full review of its strategic focus, growth options and capital allocation policy".
South West Water continues to deliver strong operational and financial performance, Pennon said, with a focus on efficiency and improving customer service.
However, the company noted the "exceptionally" hot, dry summer last year resulted in higher revenue which has not been repeated this year, and, as a consequence, revenue for the six months to the end of September has reduced to a "more normal" level compared with the first half last year.
Waste business Viridor's portfolio of ten operating energy recovery facilities are performing well, the company noted, with optimisation and operational ramp-up for the Glasgow, Beddington and Dunbar energy recovery facilities underway.
Viridor's GBP65 million plastics reprocessing facility, co-located with the Avonmouth energy recovery facility, remains on track to contribute to earnings in Pennon's financial 2021, it said.
Pennon highlighted it requires further capacity for residual waste in the UK to meet longer term demand. Therefore, the FTSE 250-listed firm continues to look at up to three new energy recovery facilities and has signed an agreement with Grundon Waste Management Ltd for a new joint venture in Ford, West Sussex.
Under the deal, a site with planning permission has been identified, Pennon said, which neighbours one of the company's existing materials recycling facilities and Grundon's waste transfer station.
Pennon said it is exploring investment opportunities for two further reprocessing facilities co-located with its facilities in Ardley, Oxfordshire, and Dunbar, near Edinburgh.
Looking ahead, Pennon said it sees plastics reprocessing as an "exciting" area of growth and it sees opportunities to increase its market share in this area.
Pennon will announce its half-year results on November 26.
By Evelina Grecenko; [email protected]
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