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Thursday, 09 February 2017 08:57

Pennon Group: water and waste businesses performing well

Pennon, one of the UK’s largest environmental infrastructure groups which owns South West Water and Bournemouth Water, has issued its latest trading update.

The Board said Pennon is continuing to focus on delivering for customers, communities and shareholders across its water and waste businesses and that the Group will deliver trading performance consistent with its expectations and prior guidance.

Operational performance is being supported by cost savings and synergies across the Group, while growth is being delivered through Viridor’s portfolio of twelve Energy Recovery Facilities (ERFs) across the UK.

As announced at the half year, Glasgow's Recycling and Renewable Energy Centre (GREEC) is being completed by an experienced team assembled by Viridor, which will work with a new Engineering, Procurement and Construction (EPC) contractor. The Glasgow-based firm Doosan Babcock are currently finalising an assessment and project plan at the site.

This follows the decision to terminate the EPC contract with Interserve due to repeated delays in the completion of GREEC, for which Viridor has contractual remedies. The Board said Glasgow City Council, had been consulted throughout and was supportive of Viridor's actions and the revised plan for completion.

In Greater Manchester, Pennon said Viridor recognised the financial challenges faced by its client, the Greater Manchester Waste Disposal Authority, due to prolonged austerity. Viridor is working together with its partners to respond. Modifications are being undertaken and funded at a handful of sites by the original construction contractor Costain PLC, to ensure the facilities operate effectively for the mix and profile of waste arisings.

Pennon intends to announce its full year results for 2016/17 on Wednesday 24 May 2017.

Chris Loughlin, Pennon Group Chief Executive commented:

“Our water and waste businesses are performing well and we are on track to deliver a good set of results for the full year 2016/17. South West Water is on course to remain at a sector-leading 11.7% RORE and Viridor is on track to contribute the targeted c.£100 million of EBITDA from its portfolio of Energy Recovery Facilities. With our sector-leading dividend policy, our growth profile and our strong balance sheet, Pennon is well-placed to continue to deliver for customers, communities and shareholders.”

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