Pennon Group plc (LON:PNN) saw a strong performance by its waste recycling unit offset higher costs at its South West Water business and help the utility to increase its full-year profits.
For the 12 months ended March 31, the FTSE 250-listed firm reported an 8.3% rise in underlying pre-tax profit to £280.2mln, up from £258.8mln a year earlier.
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The group said underlying earnings (EBITDA) growth of 19.1% at its waste business Viridor was supported by the build out and performance of its Energy Recovery Facilities (ERFs).
It pointed out that South West Water increased revenues and EBITDA thanks to higher customer demand over the summer, albeit net of costs made to deliver a resilient service to them.
Chris Loughlin, Pennon’s chief executive commented: “South West Water has invested over £7bn since 1989 with over £650mln invested in this regulatory period alone.”
“This investment enabled South West Water to demonstrate its resilience over the course of this year in extreme weather conditions, recording the lowest ever supply interruptions and again meeting our leakage target,” he added.
Pennon, which along with other water utilities has been rattled by Labour Party plans for a return to state ownership, added re-nationalisation to its risk factors without giving any further details.
The firm increased its total 2018/19 dividend by 6.4% to 41.06p per share.
In early morning trading, Pennon shares edged 0.2% higher to 735.80p.