Pennon Group PLC

PNN

Equity

ISIN GB00BNNTLN49 / Valor 111961427

LSE London Stock Exchange, SETS (2024-12-23)

GBP 5.88+1.20%

Pennon Group PLC
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About company

Pennon Group PLC is a leading UK water specialist company, listed on the FTSE 250, with a focus on providing clean water and wastewater services to a population of approximately 3.5 million in the Great South West region. The company also serves around 380,000 business customers across the UK through its subsidiary, Pennon Water Services Limited, which holds a 6% market share in water retail services for non-household customer accounts. Recently, Pennon Group acquired Bristol Water, further expanding its reach and gaining CMA clearance for the merger with South West Water. The company's strategic focus on integration and operational improvements aims to enhance service delivery and efficiency across its businesses.

Summarized from source with an LLMView SourceSector: Energy

Revenue Growth

Pennon Group PLC reported a significant increase in revenue for the full year ended 31 March 2024. The underlying revenue reached £907.8 million, marking a 10.0% increase from the previous year's £825.0 million. Statutory revenue also saw a notable rise, growing by 13.9% from £797.2 million in 2022/23 to £907.8 million in 2023/24.

Operating Profit

The Group's underlying operating profit improved by 8.6%, reaching £166.3 million compared to £153.1 million in the previous year. Statutory operating profit also increased, rising from £109.4 million in 2022/23 to £140.4 million in 2023/24. This improvement reflects the company's efforts to stabilize operating costs and benefit from its transformation program.

Dividend Policy

Pennon Group PLC has recommended a final dividend of 30.33p per share, bringing the total dividend per share for 2023/24 to 44.37p. This is in line with their policy of CPIH + 2%, adjusted to reflect a £2.4 million fine from South West Water prosecution. The company has carefully considered Ofwat’s new dividend guidance for water businesses in making this decision.

Capital Expenditure

The Group reported a peak investment year with capital expenditure reaching £583 million in the water business. This investment is aimed at protecting customers, the network, and the environment. The cumulative capital expenditure for years 4 and 5 of the K7 period is expected to be around £930 million, reflecting the company's commitment to sustainable growth and infrastructure improvement.

Outlook for 2024/25

Looking ahead, Pennon Group PLC expects organic revenue growth driven by inflationary tariff increases and growth in non-household retail businesses. Operating costs in South West Water are expected to remain broadly flat net of inflation, while total Group operating costs will increase overall. The Group's RCV is anticipated to grow in line with K7 business plan levels of investment, regulatory true-ups, and inflationary impacts.

Summarized from source with an LLMView Source

Key figures

-21.4%1Y

-49.9%3Y

-42.2%5Y

Performance

30.8%1Y

29.6%3Y

28.5%5Y

Volatility