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  • by Trevor Loveday

Pennon Group interim pre-tax profits tumble 75% as cost soar

Pennon Group reported a 75% year-on-year fall in profit before tax to £22.5m during the six months to 30 September 2022 as operating costs increased by close to one third to £250.9m for the period.


Group revenue was up 9.3% to £425.5m. due to growth in non-household demand and contract wins at Pennon Water Services, and a full six-month contribution from Bristol Water. Group Return on Regulated Equity (RORE) for the half year was 13.4% – an increase of 4.1% on the same period in the previous year.


The company attributed the drop in pre tax income chiefly to increased power bills and greater finance costs which were up twofold to £74.7m with interest payments on borrowing up 128% to £60.1m.


Pre tax profit at its South West Water business was down 75.8% to £20.5m with operating costs up 29% to £154.5m for the half year period. Its net interest charge was up 77.1% to £58.8m. Revenue fell 1.3% to £294.1m.


Pennon's recently acquired Britol Water Group reported a half year loss before tax of £1.3m from a profit of £7.2m in the first half year of 2021-22. Its net interest charge for the period was up 280% to £19.8m. Revenue was up 67.5% to £69.7m.


Pennon Water Services hosted an increase in profit before tax of from £0.3m during the same period of 2021-22 to £1.1m in the current reporting period. This was offset by a 16.2% lift in operating costs at £105.9m. Revenue at the non-household retail was up 16.7% to £108.2m.


The group upped its dividend per share by 10.8%.

Pennon said it is aiming to double the number of customers it supports with social tariffs by 2025, while delivering a second £20 million issuance of its customer sharing mechanism, WaterShare+

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