Delivering for Customers and Shareholders

Chris Loughlin, Pennon Group Chief Executive said:

'2015/16 has been a transformative year for Pennon. The Group has delivered a strong performance, notwithstanding the financial impact of our commitment to keep South West Water customer bills below inflation to 2020. We have seen significant earnings growth driven by the build-out of Energy Recovery Facilities across the UK. Bournemouth Water has now been integrated into South West Water and the combined water business is outperforming its regulatory contract. This strong performance across the Group underpins our sector-leading dividend policy of 4% growth per annum above RPI inflation to 2020.'

Financial Highlights

  • 2015/16 results in-line with management expectations
  • Profit Before Tax consistent with 2014/15 following South West Water revenue reset, but reflecting +44.9% growth in Energy Recovery Facilities (ERFs) EBITDA
  • Return on Regulated Equity at 11.7%, unique WaterShare mechanism benefiting customers
  • Sustainable, low cost funding position underpinning capital investment
  • Dividend per share +5.6% to 33.58p
Underlying 2015/16 2014/15 Change
Group Revenue £1,352.3m £1,357.2m (0.4%)
Group EBITDA £448.4m £411.0m +9.1%
Group Adjusted EBITDA £508.4m £465.9m +9.1%
Group Operating Profit £261.8m £246.6m +6.2%
Group Profit Before Tax (PBT) £211.3m £210.7m +0.3%
Earnings per share 39.5p 39.8p (0.8%)
Dividend per share 33.58p 31.80p +5.6%
Underlying PBT to Statutory Profit After Tax (PAT)
Non-underlying Items (Profit Before Tax) (£5.0m) (£13.7m) +63.5%
Tax (£38.0m) (£54.7m) +30.5%
PAT (attributable to holders of hybrid capital) (£16.2m) (£16.0m) (1.3%)
PAT (attributable to shareholders) £152.1m £126.3m +20.4%

Operational Highlights

  • Water business outperforming the regulatory contract, net ODI reward delivered for 2015/16
    • Well-prepared to take opportunities in a changing regulatory environment
  • Eight operational ERFs, ramp-up progressing well at the 6 ERFs brought on-stream between 2014/15 and H2 2015/16
    • Construction of three further ERFs ongoing - Glasgow entering commissioning in H1 2016/17, Dunbar and South London (Beddington) progressing well
  • A more homogeneous risk profile, c.80% of ERF portfolio volumes (and associated price) contracted long-term
  • Recycling 'self-help' driving margin improvement
  • Driving value through efficiency - integrating, sharing best practice, reducing costs
  • Capital allocation - optimising Pennon's risk/reward profile

Presentation of Results

A presentation for City audiences will be held today, Wednesday 25 May 2016, at 10am at the London Stock Exchange, 10 Paternoster Square, London, EC4M 7LS.

A live videocast of the presentation can also be accessed using the following link:

www.pennon-group.co.uk/investor-information

For further information, please contact:

Pennon
Susan Davy - Chief Financial Officer - Pennon
Sarah Heald - Head of Investor Relations - Pennon
01392 443 401

Finsbury
James Murgatroyd
Faeth Birch
0207 251 3801

About Pennon Group

As one of the largest environmental infrastructure groups in the UK, Pennon is at the top end of the FTSE 250. Pennon has assets of around £5.7 billion and a workforce of over 4,800 people.

South West Water provides water and wastewater services to a population of c.1.7 million in Cornwall, Devon and parts of Dorset and Somerset. South West Water was awarded enhanced status for its 2015-2020 Business Plan, and has the highest potential returns in the water sector.

Bournemouth Water provides water services to a population of c.0.5 million in parts of Dorset, Hampshire and Wiltshire. Bournemouth Water was acquired in April 2015 and has been substantially integrated into South West Water.

Viridor is a leading UK energy recovery, recycling and waste management company, providing services to more than 150 local authorities and major corporate clients as well as over 32,000 customers across the UK.

Notes:
Before non-underlying items
Statutory EBITDA plus share of Joint Venture EBITDA and IFRIC 12 interest receivable (previously reported as 'underlying EBITDA')
Before deferred tax. Basic earnings per share (statutory basis) 37.0p

Pennon Group plc published this content on 25 May 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 25 May 2016 07:10:02 UTC.

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