Pennon Group PLC (LON:PNN) reassured that it remains “well positioned” in terms of liquidity amid the coronavirus outbreak.
Having agreed the sale of its Viridor recycling and waste business for £3.7bn cash earlier in the month, much of which will be used to pay down debt, the water company said it also had roughly £1.6bn of cash and committed borrowing facilities to providing liquidity through the burgeoning economic crisis.
At the end of the five-year period to 2020, the FTSE 100 water company said its South West Water business had outperformed on totel expenditure and financing and so will conclude the 'K6' regualtory period with a "net reward position" on regulator Ofwat's outcome delivery incentives (ODIs).
Its revenues will however be reduced in the new five-year period to reflect the new level capital allowance across the industry, the company said, although some other water companies are challenging Ofwat’s final determinations.
“The group is well positioned with strong funding and liquidity to weather the current uncertainty as a result of COVID-19, but we continue to closely monitor the current situation as it develops,” Pennon said.
With completion of the sale of Viridor, subject to shareholder approval, expected in the summer, Pennon said it will provide an update and a new dividend policy at the time full-year results in early June.