Pennon posts rise in first half profit, lifts dividend

FTSE 250 water company Pennon posted a rise in first half profit and earnings despite a small drop in revenue, as all businesses across the group performed well.

For the half year to the end of September, pre-tax profit rose 6.8% from the same period last year to £106.8m, while earnings before interest, taxes, depreciation and amortisation grew 15.9% to £231.7m.

Revenue nudged a bit lower, however, down to £689.1m from £692.3m, with sales at the waste unit, Viridor, falling due to lower construction revenue from service concession arrangements as facilities come on-stream.

Revenue in the water business was up, however.

Chairman Sir John Parker said: “The group is increasingly well-positioned and operationally effective with a talented and committed leadership team. The water and waste businesses are performing strongly, driving sustainable profit and dividend growth.”

Pennon lifted its interim dividend by 4.8% to 10.46p. It said results for the year are likely to be weighted towards the first half and are on track to meet management expectations.

“This underpins our confidence in delivering a sector-leading dividend policy of +4% growth above RPI inflation,” said group Susan Davy, director of finance.