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Pennon weighs M&A against boosting shareholder returns

Shareholders who were hoping that the water company would announce an acquisition or special dividend have been left disappointed
Pennon weighs M&A against boosting shareholder returns
  • Pennon has £2.7bn of funds available following the waste management sale, but is still deliberating how to deploy cash
  • Meanwhile, Severn Trent and United Utilities have increased their interim dividends to 40.63p and 14.41p per share, respectively
IC TIP: Buy at 972p

Water utility Pennon (PNN) saw its adjusted pre-tax profit fall by 15 per cent year on year in the six months to 30 September, to £87m, due to lower tariffs in the new five-year regulatory period and demand from commercial customers dropping by a fifth. The group was spared a more severe blow from pandemic disruption as revenue was weighted towards residential customers, who increased their water usage as they spend more time at home.    

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