Pennon Group returns to profit as revenues surge

(Sharecast News) - Pennon Group swung back into the black in the first half, the utility confirmed on Thursday, boosted by higher bills and strong demand over the hot summer months.

The owner of South West Water saw revenues surge 24.8% in the six months to September end to £658.1m, while underlying pre-tax profits came in at £65.9m. Pennon posted pre-tax losses of £18.6m a year previously.

Susan Davy, group chief executive, said the FTSE 250 firm had made a "robust" start to the year.

She continued: "With a strong return to profitability and disciplined cost control, we are on track financially and growing sustainably.

"We are delivering step change improvements in our wastewater business, with pollution incidents half compared to last year. This reflects our operational focus and continued momentum of record capital investment over last two years."

Looking ahead, Pennon said it expected to return to profitability for the full year as well as at the interim results.

Group underlying earnings before interest, depreciation, tax and amortisation are expected to increase by around 60% year-on-year, assuming normalised demand in the second half.

It is also targeting a 7% return on regulated equity.