Pennon’s half-year results come with the spotlight shining bright again on water companies and how much sewage they are pumping into the UK’s rivers and bathing spots.
South West Water has many of the country’s best beaches within its arc and it has frequently been in the firing line for the state of the water on its coastlines due to discharges.
Regulator Ofgem ordered it to repay £13.3mln to customers last week because of ‘missed targets on water treatment works compliance, pollution incidents and internal sewer flooding across 2021-22’.
Pennon also has inflation-linked debts, a 1% increase in inflation results in an additional £8min in financing costs.
Matt Britzman, equity analyst at Hargreaves Lansdown said the interest bill and how big acquisition Bristol Water is doing will be things to watch as well as how much extra is set aside to improve its sewage performance.
Last year, it made an interim profit before tax of £79.9mln. Results are due Wednesday.