UK water utility Pennon Group plc (LON:PNN) said it is on track to meet its full-year expectations with its South West Water business boosted by an increase in customer demand during the hot summer months.
Despite higher demand and dry weather, there were no water restrictions in the UK, which lifted revenues at South West Water. However, Pennon said the rise in revenue is expected to be broadly offset by the operational cost of delivery.
In early September, South West Water submitted its business plan to regulator Ofwat for 2020-2025 and the company said it was "well positioned to deliver outstanding services to customers" given its "strong operational and financial delivery".
Water companies are required to submit their business plans to Ofwat to ensure they meet requirements for affordable bills and good customer service.
Ofwat will report on its assessments by 31 January 2019 and draft determinations are expected between 1 March and 31 July with final determinations due December of next year.
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The group’s waste management division, Viridor, has seen a pick-up in recyclate pricing since the end of the last financial year, particularly for paper. Pennon said the group’s recycling performance for the half year and full year remain in line with its expectations.
Three new energy recovery facilities (ERF) at Glasgow, Dunbar and South London are receiving waste through the process of final commissioning and operations will ramp up over the next 18 months.
Works at the Avonmouth ERF are on track for commissioning in 2020/21.
Pennon said it has a strong liquidity and funding position, having secured £430mln of financing since the end of March.