Profits slump by 90 per cent at South West utilities firm
Profits slumped by 90 per cent at utilities firm Pennon over the last six months.
The owner of Bristol Water and South West Water said profit after tax dropped from £18.5m to just £1.8m in the first half of the year.
The company blamed higher costs on the fall in profits and added that the trend is likely to continue into the second half of the year.
The fall in profits came even though revenues increased by 5.4 per cent to £448.6m.
The increase in revenue was driven by inflationary tariff increases which are moderated through regulatory adjustments, minimising the impact on customer bills.
There were non-underlying cost items before tax of £5.9m – which included one-off costs of business transformation, drought and renewable energy acquisitions.
Earlier this year chief executive Susan Davy decided not to take her annual bonus of £522,000 following public anger over pollution in the South West’s rivers and coastline.
She said: “Pennon has continued to make progress in the last six months on delivering for customers and shareholders, improving operational resilience across the group through an 87 per cent step up in investment, supported by a healthy balance sheet. We are executing on our twin track strategy of organic and acquisitive growth in UK water, creating long term value and making progress on what matters most to those across our regions.
“I am very clear that if we serve our customers well, we serve our shareholders well, which is why we are focused on improving environmental performance, keeping bills as low as possible, developing new water resources, and investing in renewable energy generation. This has helped us deliver a 100 per cent bathing water quality assessment for the third year running and reduce serious pollution incidents this year, but we know there is more to do.
“Our twin track strategy of both organic and acquisitive growth in UK water ensures we continue to drive long term value, with the Bristol acquisition benefits on track, alongside a growing portfolio of complementary services delivered through our business to business retailers and growing renewable energy business.
“Everyone at Pennon and in our wider supply chain works relentlessly to make change happen and I want to thank all my colleagues for their contribution to these results. I also want to thank them in advance for what they are about to do, as we look ahead to 2030, creating 2,000 new jobs in the region and delivering a sustainable future for all.”