Western Morning News (Saturday)
Revenue drops by £10m for SWW owner Pennon
THE parent firm of South West Water – which is offering customers the chance to become shareholders with a £20 gift this month – has taken a £10million hit from the coronavirus pandemic as demand from businesses went down the plughole, the company said.
Pennon Group Plc’s latest trading statement shows that the firm is expecting to record the loss during its 2020-2021 financial year.
But it stressed this was pretty much what it expected and remains in a strong financial position and on track to deliver resilient financial results in line with management predictions.
Pennon Group, one of the leading water companies in the UK, issued the update ahead of its results for the half year ended September 30, which will be announced on 24 November 24, 2020.
It comes at the end of a period when the firm completed the £4.2billion sale of its Viridor waste management arm, in July, which left it with net cash proceeds of £3.7billion.
And its newly announced Water
Share+ scheme which will see about £20million shared with customers via either a Pennon shares offer or a bill reduction or a cash rebate. Eligible customers can choose which they would like.
The statement also highlighted that the firm continues to deliver essential services through the ongoing Covid-19 pandemic - and without utilising any Government support schemes and with no employees furloughed.
“The vast majority of our operations continue as usual in Covid-19 secure environments, prioritising the health and wellbeing of our employees,” the statement said. “In addition, we have signed up to the Kickstart Scheme as part of our commitment to supporting the Government’s broader build back better campaign.
“As expected, the largest impact of Covid-19 on water usage has been on businesses and commercial customers (non-household),” the statement continued. “Overall revenue has reduced with an increase in household revenue offset by lower non-household revenue.
“Ofwat’s regulatory model allows for differences in revenue compared to the Final Determination to be trued up in future years.”
Pennon Water Services, the firm’s business-to-business retailer, continues to work to minimise bad debt risk through the implementation of cash collection initiatives, the statement said and added: “Whilst cash collections across the group to date have remained robust, we continue to closely monitor changes in revenue and payment patterns in response to new national and regional restrictions and changes in Government support for businesses and individuals.
“To support customers who have seen an impact on their household finances we have accelerated planned affordability and vulnerability initiatives ensuring accessible support to those who need it most during these challenging times.”
‘As expected the largest impact of Covid-19 has been on business water usage’ PENNON