REG - Pennon Group PLC - Half Yearly Report <Origin Href="QuoteRef">PNN.L</Origin> - Part 2

PennonAnnouncement

28/11/2014 07:11

- Part 2: For the preceding part double click  ID:nRSb2520Ya 

 Average debt maturity 21 years                                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                                                                                                                        
 ·                                         Fair value of debt £190m less than book value                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                        
                                           (1)    Before exceptional credit of £14.9m (post tax £11.9m)                                                                                                                                                                                                                                 
                                           (2)    Earnings per share before exceptional credit, deferred tax and adjusted proportionately to reflect the                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                        
                                                   half year impact of the annual hybrid capital periodic return                                                                                                                                                                                                                        
                                           (3)    Including construction spend on service concession arrangements                                                                                                                                                                                                                       
                                           (4)    Including £174m deposits with Letter of Credit providers and lessors                                                                                                                                                                                                                  
                                           (5)    Excluding pensions net interest, IFRIC 12 contract interest receivable and discount unwind on                                                                                                                                                                                         
                                                                                                                                                                                                                                                                                                                                        
                                                   provisions                                                                                                                                                                                                                                                                           
                                           
 DIVIDEND                                  
                                           
 The interim dividend of 9.98p per share   
 represents an increase of 6.3%, in line   
 with the previously announced policy to   
 grow the Group dividend by 4% per annum   
 above inflation up to the end of 2014/15. 
                                           
 The dividend will be paid on 2 April 2015 
 to shareholders on the register on 30     
 January 2015. The Company is also offering 
 a scrip dividend alternative.  The final  
 date for receipt of forms of              
 election/mandate in respect of the scrip  
 dividend alternative for the interim      
 dividend will be 9 March 2015.   As       
 announced at our Preliminary Results last 
 June, the Board will review the dividend  
 policy for the K6 period following the    
 Final Determination for South West Water  
 and will make an announcement at the      
 2014/15 Preliminary Results.              
                                           
 OUTLOOK                                   
                                           
 The Board's priority continues to be the  
 creation of shareholder value through its 
 strategic focus on water and sewerage     
 services; and recycling, renewable energy 
 and waste management.                     
                                           
 South West Water is continuing its strong 
 performance with robust operational       
 delivery and high standards of customer   
 service and financial performance. Early  
 receipt of Ofwat's Draft Determination is 
 allowing the accelerated delivery of key  
 projects identified in the company's      
 business plan for K6 (2015-2020).  With   
 South West Water's track record of        
 efficiency and outperformance, the company 
 is well placed to deliver its business    
 plan and will have an opportunity to      
 outperform the assumed returns on equity. 
                                           
 Viridor's financial performance in the    
 first half of this year has been in line  
 with management expectations.  The ERFs   
 coming on stream this year are expected to 
 boost EBITDA in the second half of 2014/15 
 and result in 2014/15 full year EBITDA for 
 Viridor exceeding 2013/14.  The company   
 has made excellent progress in            
 establishing its ERF business - two plants 
 came on stream this half year. These      
 projects and contracts already contribute 
 to Viridor's bottom line and reflect the  
 realisation of a strategy which is        
 expected to contribute circa £100m to     
 Viridor's EBITDA in 2016/17.              
                                           
 The Group is well positioned for the      
 future, with efficient long term          
 financing.                                
                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
 
 
 SOUTH WEST WATER                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
 South West Water has continued to                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
 deliver good operational                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
 performance in the last year of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
 the K5 (2010-2015) regulatory                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
 period alongside further                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
 improvements to customer service.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
 This is supported by strong                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
 financial results - arising from                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
 good cost control and continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
 efficiency delivery.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
 South West Water's business plan