Utilities group Pennon has said it is “on track” to deliver financial results in line with bosses’ expectations after completing the merger of South West Water with Bristol Water.
In a trading update on Tuesday (March 14), the Exeter-based company told investors, following the CMA’s approval of its £425m takeover of Bristol Water last year, the combined water business was now operating under one licence, as of last month.
The FTSE firm which provides water to around 3.5 million people across the South West, said it was reinvesting to increase water resilience and enhance the environment.
It comes after South West Water came under the glare of regulator Ofwat last year over its environmental performance and sewage treatment works.
The watchdog opened an additional enforcement case at South West Water in June amid an industry-wide probe, as it said concerns were growing over the supplier’s operation of sewage works and environmental performance.
Pennon said it had improved its wastewater pollutions performance by more than 50% in two years, including a 75% reduction in serious pollutions in 2022 from 8 to 2, alongside its "best ever" wastewater treatment works compliance at 99.4%.
The group said it was accelerating plans to achieve around 50% self-generation by 2030, and it was in “advanced discussions” over possible large scale solar developments across the UK, ranging up to 60 MW. The group said these opportunities would initially be funded through a group capital allocation of around.£160m.
It added that after “some of the driest, hottest weather on record” last year and a “very dry” February, its water resilience initiatives, including the purchase of Hawkstor reservoir in Cornwall last year, were “progressing well”.
Pennon said it would publish details of its full-year performance on June 1. It comes after the company saw half-year profits slump by three quarters after it was hit by a doubling of power costs amid the energy crisis.
Last November the parent firm of South West Water said pre-tax profits fell by 75.1% to £22.5m in the six months to September 30, despite revenues rising by 9.3% to £425.5m.
The business said it would deliver “below inflation bill increases” for its customers in 2023/24.
Read next:
- Utilities consultancy opens South West base at Exeter Science Park
- Exeter University appoints former Applegate boss in new senior business role
- Exeter Airport creates 25 jobs as it looks to continue pandemic rebound
- Work begins on final phase of giant industrial park in Exeter
Like this story? Why not sign up to get the latest South West business news straight to your inbox.
