Profit before tax at South West Water fell 17% to £137m for the year to 31 March 2022 as inflation fuelled the impact of operating and financing costs.
In its annal report, South West Water parent, Pennon Group, reported the water and sewage firm’s underlying operating costs up 13.5% to £252m reflecting the impact of inflation on energy, chemicals. wages and other areas including insurance. Index-linked debt interest jumped 35% for the year to £78m. Revenue was up year-on-year by 3.6% to £583m.
Pennon Group itself reported a predictably similar, inflation-led story to its subsidiary with a 31.8% rise in operating costs to £408m and profit before tax down 8.6% from the previous year to £144m. Group revenue for the year was up 22.9% to £792m boosted by £104m sales at recent £425m acquisition, Bristol Water.
Bristol Water contributed to the financial results from 3 June 2021 adding £9.2m in profit before tax with financial performance “ahead of management expectations”.
Pennon’s business retail arm, Pennon Water Services, delivered a profit before tax of £1m up from a £1m loss in the previous year on sales up 11.4% to £91m excluding the wholesale revenue for business customers. Pennon estimated the retailer to hold a 6% market share. The Bristol Water acquisition included a 30% share in retailer, water2business – with a market share also at about 6%.
Following its sale of waste management business Viridor, Pennon Group paid special dividend of some £1.5bn in the reported year. It also opened a share buy-back programme of up to about £400 million.
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