25th Nov 2016 07:23
LONDON (Alliance News) - Pennon Group PLC on Friday said it delivered a "good performance" in the first half of its financial year, as South West Water continued to deliver sector-leading returns, helping the water and wastewater company post a 20% lift in profit.
The FTSE 250-listed company said underlying pretax profit in the six months to the end of September totalled GBP128.1 million, while the reported profit that includes exceptional items amounted to GBP102.4 million. They can both be compared to the underlying and reported profit of GBP106.8 million the year before.
Revenue in the first half declined 0.5% year-on-year to GBP685.5 million from GBP689.1 million, but lower operating costs allowed earnings before interest, tax, depreciation and amortisation to rise slightly to GBP234.7 million from GBP231.7 million.
Operating profit increased year-on-year to GBP143.2 million from GBP135.3 million.
Pennon raised its interim dividend by 6.0% to 11.09 pence from the 10.46 pence paid a year before, and the company said it should deliver dividend growth of 4.0% above RPI inflation over the full year.
"We believe Pennon is well positioned for the future and is on track to meet management expectations for the full year 2016/17," said the company.
South West Water, the division supplying water to its customers, is continuing to deliver "sector-leading" return on retained earnings at 11.7%, Pennon said, while the waste business Viridor is on track to deliver GBP100.0 million of Ebitda from its energy recovery business over the full year, while margins should also improve.
Pennon said, as part of its ongoing investment in growth, that it will invest GBP252.0 million to build an energy recovery facility in Avonmouth, bringing the total amount of plants up to 12.
Pennon said South West Water delivered GBP80.0 million worth of total expenditure savings since the start of 2015, when the current five-year regulatory period started, while a recent review will also increase total group savings to GBP17.0 million per year from 2019 rather than the previous expectation to save GBP11.0 million annually.
By Joshua Warner; [email protected]; @JoshAlliance
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