£15 million fall in profit figure for SW Water
SOUTH West Water’s parent firm has seen a £15 million fall in halfyear profits, but bosses have stressed the business has remained “resilient” in the face of the coronavirus pandemic.
Pennon’s results for the six months to the end of September, 2020, a period characterised by the Covid-19 crisis and its economic aftershocks, show an underlying pre-tax profit of £86.7 million. This was down 14.5% from the £101.4 million profit for the same period in pre-Covid 2019.
Revenue was also down slightly, a 1.9% drop from £325.8 million to £319.7 million.
The Exeter-headquartered FTSE-100 company made a £1.7 billion profit from the sale of its waste management operation Viridor, having taken £3.7 billion in net cash proceeds from the £4.2 billion sale, and is paying off debt, with £750 million already paid back and £36 million injected into the company’s main pension scheme.
This leaves Pennon with £2.7 billion for investment, the accounts revealed. There has been speculation that the company will make a bid to buy Southern Water.
Pennon said it has rapidly adapted to the operational and financial challenges presented by Covid-19 and is well placed to weather the crisis. It stressed that, in order to meet commitments, it is advancing expenditure, including delivering two bathing water quality improvements and earlier than planned upgrades in its network to reduce leakage.
The company is now focusing on its ‘New Deal’ 2020-2025 five year plan, which has begun with its WaterShare+ scheme to return £20 million in savings to customers via either shares or bill discounts.
Susan Davy, Pennon’s chief executive, said: “I am delighted to be leading the business at this important time in Pennon’s history. The completion of the Viridor sale in July this year has seen significant shareholder value realised, allowing us to refocus our business on excellence in the water and wastewater sector. It is an incredibly exciting time for the group as we forge ahead with our New Deal plans.
“We will deliver our New Deal by being even closer to the people we serve, understanding people’s needs, demonstrating the positive impacts we’re making, and, above all else, doing the right thing. We are promoting social mobility, addressing racial and gender inequality, and providing secure jobs across our regions.
“This starts with our new WaterShare+ scheme, in which one in 16 of our household customers are now shareholders in the business, helping us to create a new kind of water company, closer to the customers and communities we serve. Environmental considerations continue to be at the heart of our decision-making, and we are focused on delivering on our commitments.
“Pennon has delivered resilient operational and financial performance through the first half of 2020/21, making good progress in the new K7 regulatory period and against the backdrop of Covid-19.
“I’d like to recognise the exceptional commitment and resilience of all our people during this time. I have been humbled by their dedication and professionalism that has allowed us to continue to deliver for customers, communities and the environment.”