Improved revenue and earnings flow through at Pennon Group

Pennon Group posted its full-year results for the 12 months to 31 March on Wednesday, with revenue rising 0.1% to £1.353bn on an underlying basis.

The FTSE 250 company said underlying EBITDA improved 8.4% to £486m, while adjusted EBITDA was 7.4% firmer at £546.2m.

Its operating profit was up 16.3% at £304.6m, while profit before tax surged 18.3% on an underlying basis to £250m.

Earnings per share were 19% higher at 47p.

On a statutory basis, profit before tax rose 2% to £210.5m, profit after tax increased 7.2% to £180.5m, and earnings per share were 7.6% higher at 39.8p.

The board confirmed a dividend per share of 35.96p, an improvement of 7.1% year-on-year.

“Pennon has delivered a strong performance in 2016/17 across its water and waste businesses,” said chief executive Chris Loughlin.

“South West Water's Return on Regulated Equity continues to lead the sector while Viridor is growing through its Energy Recovery Facility portfolio, delivering EBITDA of £107m, ahead of our £100m target.”

Across the group, Loughlin said Pennon was investing for growth while driving efficiency to keep costs low for the benefit of customers.

“We have delivered savings of £129m in total expenditure at South West Water since the beginning of the current regulatory period, cementing our commitment to reduce the real cost of water bills to 2020.

“We believe Pennon is well positioned now and for the future and our performance underpins our long established sector-leading 10 year dividend policy of 4% growth per annum above RPI inflation out to 2020.”