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Pennon profit jumps on Viridor sale; cuts dividend

By BFN News | 07:13 AM | Tuesday 24 November, 2020

Water utility Pennon posted a large rise in first-half profit owing to a gain on the sale of its Viridor waste management division, though its underlying profit slumped 48% and it slashed its dividend. Net profit for the six months through September jumped to £1.77 billion, up from £133.5 million year-on-year, and included a £1.70 billion profit on the sale of Viridor, for which £3.70 billion of net cash proceeds were received. Underlying pre-tax profit fell to £61.9 million, down from £119.4 million year-on-year, as revenue slipped 1.9% to £319.7 million. Pennon halved its interim dividend to 6.77p, down from 13.66p year-on-year. 'We believe there is significant value potential for shareholders from the reinvestment of the Viridor sale proceeds in the UK water sector,' Pennon said. 'The group has significant funds available of £2.7 billion and we are working extensively to narrow down the potential opportunities.' 'All opportunities are benchmarked against a return of capital to shareholders.' 'If a compelling value creating opportunity is not available, capital will be returned to shareholders.' Chief executive Susan Davy said Pennon had delivered a 'resilient' operating performance against the backdrop of the Covid-19 pandemic, while preparing for the UK's new K7 regulatory period. Story provided by

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