Pennon (PNN) offers a slightly different proposition to its fellow water companies in that more than half of its revenue comes from its waste management division, Viridor. With adjusted cash profits from the segment surging by almost a fifth to £179m in FY2019, growth was driven by demand for energy recovery facilities (ERF) - transforming waste into electricity and heat.
As the annual gap between combustible residual waste and ERF capacity is expected to remain at around 7m tonnes until 2035, the group has invested £208m in increasing existing capacity, bringing three facilities into operation and constructing another at Avonmouth.
Meanwhile, South West Water secured its highest net outperformance delivery incentive (ODI) reward of £4.1m, maintaining a cumulative return on regulatory equity (RoRE) of 11.7 per cent. Having been awarded fast-track status for the next regulatory period, AMP7, its 'New Deal' includes proposals to allow customers to become shareholders – management regards nationalisation as “something we cannot particularly influence”.
Bloomberg consensus forecasts indicate adjusted pre-tax profit of £286m and EPS of 59.1p in 2020, up from £270m and 54.7p in 2019.
PENNON (PNN) | ||||
ORD PRICE: | 728p | MARKET VALUE: | £ 3.06bn | |
TOUCH: | 727.8-728.2p | 12-MONTH HIGH: | 815p | LOW: 681p |
DIVIDEND YIELD: | 5.6% | PE RATIO: | 14 | |
NET ASSET VALUE: | 330p* | NET DEBT: | £3.1bn |
Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2015 | 1.36 | 197 | 32.3 | 31.80 |
2016 | 1.35 | 206 | 37.0 | 33.58 |
2017 | 1.35 | 211 | 39.8 | 35.96 |
2018 | 1.40 | 263 | 48.0 | 38.59 |
2019 | 1.48 | 260 | 51.1 | 41.06 |
% change | +6 | -1 | +6 | +6 |
Ex-div: | 25 Jul | |||
Payment: | 03 Sep | |||
*Includes intangible assets of £477m, or 113p a share |