Pennon Group share price: 4 things to watch out for in its full-year results
The water utility and waste management company offered investors an update on its performance on Monday, reassuring shareholders that its full-year 2018 results that will be announced in May are in line with its expectations.
Over the last 12 months, Pennon Group's share price has climbed more than 30% higher to £7.89, recovering from a low of £5.83 in March last year, with investors eagerly awaiting an update on its performance in its full-year results scheduled for publication on 30 May.
However, the water utility and waste management company did release a trading update on Monday that confirmed its underlying financial performance for the year ending 31 March is in line with its own guidance.
South West Water momentum continues
South West Water continues to deliver strong operational and financial performance, with a focus on efficiency and customer service. RORE is on track for consistent continued outperformance for 2018/19 with an expected cumulative rate of 11.8%.
Momentum is being maintained in respect of achieving both the £300 million target for Total Expenditure (Totex) outperformance and delivery of further net Outcome Delivery Incentive (ODI) rewards.
South West Water's business plan for 2020-2025 has qualified for a 'fast track' process, the only water company to have achieved this status for two consecutive price reviews.
Pennnon hit by £16 million Interserve bill
The water utility and waste management company revealed that it will take a £16 million hit as a result of financial problems at its collapsed infrastructure partner Interserve. Pennon had previously allocated £8 million to cover its exposure to Interserve but was forced to announce to shareholders that this figure has since doubled.
‘We will continue to pursue recovery of all amounts due from the operating subsidiary Interserve Construction Ltd and will take all the necessary legal and procedural steps to achieve this,’ the company said.
Viridor drives underlying EBITDA growth
The three new ERFs at Glasgow, Beddington and Dunbar have all progressed through commissioning to service commencement ahead of full operation. Optimisation is ongoing and operations will continue to ramp up over the next 18 months in line with the pattern experienced already in our existing portfolio.
In line with management expectations, the existing assets in our ERF portfolio have continued to perform ahead of our base case scenario, underpinning the full year results forecast.
Work at the Avonmouth ERF has progressed as expected this year with all major process equipment parts and steelwork for the building in place.
‘Recyclate prices have remained largely stable over the period albeit with increasing customer quality requirements in line with recent trends,’ the company said.
‘Viridor has continued with targeted investment in its recycling assets in order to improve output quality, including a focus on reliability centred maintenance and working with its customers to improve the quality of input materials.’
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
See an opportunity to trade?
Go long or short on more than 16,000 markets with IG.
Spread bet and trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.