Interim Management Statement

RNS Number : 3441X

Pennon Group PLC

14 February 2012

 

14 February 2012

PENNON GROUP PLC

INTERIM MANAGEMENT STATEMENT

Overall Group financial performance since 30 September 2011 remains on track to meet management expectations.  

South West Water

South West Water is continuing its strong performance against the 2010-2015 (K5) regulatory contract, with capital investment increased substantially over the prior year.

The 9,300km sewer network increased by approximately 50% from 1 October 2011 following the adoption of private sewers and lateral drains.  It is anticipated that shareholders will receive appropriate returns for K5 private sewer expenditure spent efficiently through the regulatory pricing mechanisms.

The water resource position is at a similar level to this time last year despite record breaking low rainfall last spring.  During last autumn and early winter South West Water used its pumped storage facilities to help to refill Colliford, Stithians and Wimbleball Reservoirs and installed new distribution pumps in East Devon to optimise use of its boreholes.

Viridor

As flagged at the Half Year results announcement, Viridor has experienced a reduction in recyclate prices over the winter months reflecting world economic conditions. At the same time a higher level of activity year to date associated with its growing pipeline of long-term projects has led to an increase in bid costs.  Full year profits are therefore expected to be a little below those of last year.

Since 1 October 2011 Viridor has made significant progress in developing its pipeline of long-term projects including:

·     confirmation as the successful participant for the 25 year contract for the treatment of Glasgow's residual waste;

·     becoming preferred bidder for the 25 year contract to treat the South London Waste Partnership's residual waste; and

·     the successful resolution of the legal challenge for the Ardley Energy from Waste (EfW) plant with the Oxford PPP Notice to Proceed issued.

Viridor has also further developed its business activities through the acquisition of:

·     Community Waste Holding Limited and Community Waste Recycling Limited for £15.75m, which operate Materials Recycling Facilities in Bedfordshire and Oxfordshire;

·     JWS Churngold Limited for £14.25m which provides transport and logistics solutions to the Lancashire Waste PFI; and

·     trade waste collection interests of Veolia in Cornwall, Devon and Somerset for an aggregate £8.2m.

Group

Since 1 October 2011 South West Water has signed a £60m facility with the European Investment Bank (EIB).  This represents the second tranche of a £125m loan approved by the EIB towards K5 funding.  South West Water has also signed an additional £40m revolving credit facility and £140m of finance lease facilities.

Further information on Pennon, South West Water and Viridor can be found on the Group's website, www.pennon-group.co.uk

For further information, please contact:

Pennon:           David Dupont - Group Director of Finance               
                         01392 443998
                         Edward Jackson - Group Financial Controller
                         01392 443059

RLM Finsbury: Sara Evans                                                                
                         0207 251 3801
 
Cautionary statement in respect of forward-looking statements

This Statement contains forward-looking statements relating to Pennon Group's operations, performance and financial position based on current expectations of, and assumptions and forecasts made by, Pennon Group management.  Words such as "aims", "anticipates", "believes", "continue", "could", "due", "estimates", "expects", "goal", "intends", "may", "plans", "projects", "remains", "seeks", "should", "targets", "will" and related and similar expressions as well as statements in the future tense identify forward-looking statements.  By their very nature forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will or will not occur in the future.  Various known and unknown risks, uncertainties and other factors could lead to substantial differences between the actual future results, financial situation, development or performance of the Group and those expressed or implied in this statement.  These risks, uncertainties and factors include, but are not limited to, changes in the economies and markets in which Pennon Group operates; changes in the regulatory and competition frameworks in which Pennon Group operates; the impact of legal or other proceedings against or which affect Pennon Group; and changes in interest and exchange rates.  Further details of Pennon Group's principal risks and uncertainties are set out in Pennon Group's 2011 Annual Report which can be viewed online at http://www.pennonannualreport2011.co.uk/   Undue reliance should not be placed on forward-looking statements which are made only as of the date of this Statement.  Nothing in this Statement should be construed as a profit forecast.  The Group accepts no obligation publicly to revise or update these forward-looking statements or adjust them as a result of new information or for future events or developments, except to the extent legally required.

 

END

 

 

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