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REG - Pennon Group PLC - Pennon Group Half Year Results 2015/16 <Origin Href="QuoteRef">PNN.L</Origin> - Part 3

- Part 3: For the preceding part double click  ID:nRSa1477Hb 

funds                                                                                                                       (14.9)                          (0.6)                                     
 Purchase of ordinary shares by the Pennon                                                                                                                                                                                   
                                                                                           Employee Share Trust                                                                    (1.1)                            (0.8)      
 Proceeds from new borrowing                                                                                                                       130.0                           130.0                                     
 Repayment of borrowings                                                                                                                           (95.1)                          (20.1)                                    
 Finance lease sale and leaseback                                                                                                                  0.9                             89.6                                      
 Finance lease principal repayments                                                                                                                (15.0)                          (88.0)                                    
 Dividends paid                                                                                                                                    (37.7)                          (26.8)                                    
                                                                                                                                                                                                                             
 Net cash received from financing                                                                                                                                                                                            
                                                                                           Activities                                                                              69.2                             86.6       
                                                                                                                                                                                                                             
 Net increase in cash and cash equivalents                                                                         20.0                            80.4                                                                    
                                                                                                                                                                                                                             
 Cash and cash equivalents at beginning of period                                          14                                                      574.8                           439.9                                     
                                                                                                                                                                                                                             
 Cash and cash equivalents at end of period                                                14                                                      594.8                           520.3                                     
                                                                                                                                                                                                                             
                                                                                                                                                                                                                             
 The notes on pages 37 to 52 form part of this condensed half year financial information.                          
                                                                                                                                                                                                                             
                                                                                                                                                                                                                             
 PENNON GROUP PLC                                                                                                  
                                                                                                                   
 Notes to the condensed half year financial information                                                            
                                                                                                                   
 1.                                                                                        General information                                     
                                                                                                                                                   
                                                                                           Pennon Group Plc is a                                   
                                                                                           company registered in                                   
                                                                                           the United Kingdom under                                 
                                                                                           the Companies Act 2006.                                  
                                                                                           The address of the                                      
                                                                                           registered office is                                    
                                                                                           given on page 52.                                       
                                                                                           Pennon Group's business                                 
                                                                                           is operated through                                     
                                                                                           three main subsidiaries.                                 
                                                                                            South West Water                                       
                                                                                           Limited holds the water                                 
                                                                                           and wastewater services                                 
                                                                                           appointments for Devon,                                 
                                                                                           Cornwall and parts of                                   
                                                                                           Dorset and Somerset.                                    
                                                                                           Bournemouth Water                                       
                                                                                           Limited holds the water                                 
                                                                                           appointments for parts                                  
                                                                                           of Dorset, Hampshire and                                 
                                                                                           Wiltshire. Viridor                                      
                                                                                           Limited's business is                                   
                                                                                           renewable energy,                                       
                                                                                           recycling and waste                                     
                                                                                           management.                                             
                                                                                                                                                   
                                                                                           This condensed half year                                 
                                                                                           financial information                                   
                                                                                           was approved by the                                     
                                                                                           Board of Directors on 26                                 
                                                                                           November 2015.                                          
                                                                                                                                                   
                                                                                           The financial                                           
                                                                                           information for the                                     
                                                                                           period ended 30                                         
                                                                                           September 2015 does not                                 
                                                                                           constitute statutory                                    
                                                                                           accounts within the                                     
                                                                                           meaning of section 435                                  
                                                                                           of the Companies Act                                    
                                                                                           2006.  The statutory                                    
                                                                                           accounts for 31 March                                   
                                                                                           2015 were approved by                                   
                                                                                           the Board of Directors                                  
                                                                                           on 22 June 2015 and have                                 
                                                                                           been delivered to the                                   
                                                                                           Registrar of Companies.                                  
                                                                                           The independent                                         
                                                                                           auditor's report on                                     
                                                                                           these financial                                         
                                                                                           statements was                                          
                                                                                           unqualified, and did not                                 
                                                                                           contain a statement                                     
                                                                                           under section 498 of the                                 
                                                                                           Companies Act 2006.                                     
                                                                                                                                                   
 2.                                                                                        Basis of preparation                                    
                                                                                                                                                   
                                                                                           This condensed half year                                 
                                                                                           financial information                                   
                                                                                           has been prepared in                                    
                                                                                           accordance with the                                     
                                                                                           Disclosure and                                          
                                                                                           Transparency Rules of                                   
                                                                                           the Financial Services                                  
                                                                                           Authority and with IAS                                  
                                                                                           34 "Interim financial                                   
                                                                                           reporting" as adopted by                                 
                                                                                           the European Union (EU).                                 
                                                                                           This condensed half year                                 
                                                                                           financial information                                   
                                                                                           should be read in                                       
                                                                                           conjunction with the                                    
                                                                                           Pennon Group Plc Annual                                 
                                                                                           Report and Accounts for                                 
                                                                                           the year ended 31 March                                 
                                                                                           2015, which were                                        
                                                                                           prepared in accordance                                  
                                                                                           with International                                      
                                                                                           Financial Reporting                                     
                                                                                           Standards (IFRSs) as                                    
                                                                                           adopted by the EU.                                      
                                                                                                                                                   
                                                                                           Having made enquiries,                                  
                                                                                           the Directors consider                                  
                                                                                           that the Company and its                                 
                                                                                           subsidiary undertakings                                 
                                                                                           have adequate resources                                 
                                                                                           to continue in business                                 
                                                                                           for the foreseeable                                     
                                                                                           future, and that it is                                  
                                                                                           therefore appropriate to                                 
                                                                                           adopt the going concern                                 
                                                                                           basis in preparing the                                  
                                                                                           condensed half year                                     
                                                                                           financial information.                                  
                                                                                                                                                   
                                                                                           This condensed half year                                 
                                                                                           financial information                                   
                                                                                           has been reviewed but                                   
                                                                                           not audited by the                                      
                                                                                           independent auditor                                     
                                                                                           pursuant to the Auditing                                 
                                                                                           Practices Board guidance                                 
                                                                                           on the "Review of                                       
                                                                                           Interim Financial                                       
                                                                                           Information".                                           
                                                                                                                                                   
                                                                                           The preparation of the                                  
                                                                                           half year financial                                     
                                                                                           information requires                                    
                                                                                           management to make                                      
                                                                                           judgements, estimates                                   
                                                                                           and assumptions that                                    
                                                                                           affect the application                                  
                                                                                           of accounting policies                                  
                                                                                           and the reported amounts                                 
                                                                                           of assets and                                           
                                                                                           liabilities, income and                                 
                                                                                           expense. Actual results                                 
                                                                                           may differ from these                                   
                                                                                           estimates. The                                          
                                                                                           significant judgements                                  
                                                                                           made by management in                                   
                                                                                           applying the Group's                                    
                                                                                           accounting policies and                                 
                                                                                           the key sources of                                      
                                                                                           estimation uncertainty                                  
                                                                                           are consistent with                                     
                                                                                           those that applied to                                   
                                                                                           the consolidated                                        
                                                                                           financial statements for                                 
                                                                                           the year ended 31 March                                 
                                                                                           2015, with the exception                                 
                                                                                           of changes in estimates                                 
                                                                                           that are required in                                    
                                                                                           determining the half                                    
                                                                                           year provision of income                                 
                                                                                           taxes.                                                  
                                                                                                                                                   
 3.                                                                                        Accounting policies                                     
                                                                                                                                                   
                                                                                           The accounting policies                                 
                                                                                           adopted in this                                         
                                                                                           condensed half year                                     
                                                                                           financial information                                   
                                                                                           are consistent with                                     
                                                                                           those applied and set                                   
                                                                                           out in the Pennon Group                                 
                                                                                           Plc Annual Report and                                   
                                                                                           Accounts for the year                                   
                                                                                           ended 31 March 2015 and                                 
                                                                                           are in accordance with                                  
                                                                                           all IFRSs and                                           
                                                                                           interpretations of the                                  
                                                                                           IFRS Interpretations                                    
                                                                                           Committee expected to be                                 
                                                                                           applicable for the year                                 
                                                                                           ended 31 March 2016 in                                  
                                                                                           issue which have been                                   
                                                                                           adopted by the EU.                                      
                                                                                                                                                   
                                                                                           New standards or                                        
                                                                                           interpretations which                                   
                                                                                           were mandatory for the                                  
                                                                                           first time in the year                                  
                                                                                           beginning 1 April 2015                                  
                                                                                           did not have a material                                 
                                                                                           impact on the net assets                                 
                                                                                           or results of the Group.                                 
                                                                                                                                                   
                                                                                           The tax charge for                                      
                                                                                           September 2015 and                                      
                                                                                           September 2014 has been                                 
                                                                                           derived by applying the                                 
                                                                                           anticipated effective                                   
                                                                                           annual rate to the first                                 
                                                                                           half year profit before                                 
                                                                                           tax.                                                    
 PENNON GROUP PLC                                                                                                                                                                                                            
                                                                                                                   
 Notes to the condensed half year financial information (continued)                                                
                                                                                                                                                   
 4.                                                                                        Segmental information                                   
                                                                                                                                                   
                                                                                           Operating segments are                                  
                                                                                           reported in a manner                                    
                                                                                           consistent with internal                                 
                                                                                           reporting provided to                                   
                                                                                           the Chief Operating                                     
                                                                                           Decision-Maker, which                                   
                                                                                           has been identified as                                  
                                                                                           the Pennon Group Plc                                    
                                                                                           Board.                                                  
                                                                                                                                                   
                                                                                           The water business                                      
                                                                                           comprises the regulated                                 
                                                                                           water and wastewater                                    
                                                                                           services undertaken by                                  
                                                                                           South West Water Limited                                 
                                                                                           and the regulated water                                 
                                                                                           services undertaken by                                  
                                                                                           Bournemouth Water                                       
                                                                                           Limited. The waste                                      
                                                                                           management business is                                  
                                                                                           the renewable energy,                                   
                                                                                           recycling and waste                                     
                                                                                           management services                                     
                                                                                           provided by Viridor                                     
                                                                                           Limited.                                                
                                                                                                                                                                                                                           
                                                                                                                   Unaudited                                                                                        
                                                                                                                   Half year                       Half year                                                               
                                                                                                                   ended                           ended                                                                   
                                                                                                                   30 September                    30 September                                                            
                                                                                                                   2015                            2014                                                                    
                                                                                                                   £m                              £m                                                                      
                                                                                           Revenue                                                                                                                         
                                                                                           Water                   279.3                           268.3                                                                   
                                                                                           Waste management        410.1                           424.4                                                                   
                                                                                           Other                   6.1                             5.3                                                                     
                                                                                           Less intra-segment      (6.4)                           (5.7)                                                                   
                                                                                           trading                                                                                                                         
                                                                                           689.1                   692.3                                                                                            
                                                                                           Segment result                                                                                                                  
                                                                                                                                                                                                                           
                                                                                           Operating profit before                                                                                                         
                                                                                           depreciation,                                                                                                                   
                                                                                           amortisation                                                                                                                    
                                                                                                                   and exceptional items (EBITDA)                                                                            
                                                                                           Water                   173.6                           172.2                                                                   
                                                                                           Waste management        61.0                            28.1                                                                    
                                                                                           Other                   (2.9)                           (0.3)                                                                   
                                                                                           231.7                   200.0                                                                                            
                                                                                           Operating profit before                                                                                                         
                                                                                           exceptional items                                                                                                               
                                                                                           Water                   117.7                           119.2                                                                   
                                                                                           Waste management        20.5                            0.2                                                                     
                                                                                           Other                   (2.9)                           (0.2)                                                                   
                                                                                                                   135.3                           119.2                                                                   
                                                                                           Profit before tax and                                                                                                           
                                                                                           exceptional items                                                                                                               
                                                                                           Water                   87.0                            86.2                                                                    
                                                                                           Waste management        12.9                            4.7                                                                     
                                                                                           Other                   6.9                             9.1                                                                     
                                                                                                                   106.8                           100.0                                                                   
                                                                                           Profit before tax                                                                                                               
                                                                                           Water                   87.0                            98.0                                                                    
                                                                                           Waste management        12.9                            6.6                                                                     
                                                                                           Other                   6.9                             10.3                                                                    
                                                                                                                   106.8                           114.9                                                                   
                                                                                                                                                                                                                           
                                                                                           Intra-segment           
                                                                                           transactions between and 
                                                                                           to other segments are   
                                                                                           under normal commercial 
                                                                                           terms and conditions.   
                                                                                           Intra-segment revenue or 
                                                                                           interest receivable of  
                                                                                           one segment is a cost or 
                                                                                           interest payable of     
                                                                                           another.                
                                                                                                                                                                                                                           
                                                                                           Factors such as seasonal 
                                                                                           weather patterns can    
                                                                                           affect sales volumes,   
                                                                                           income and costs in both 
                                                                                           the water and waste     
                                                                                           management segments.    
                                                                                                                                                   
                                                                                                                                                   
                                                                                                                                                                                                                                                         
 
 
 PENNON GROUP PLC                                                    
                                                                                                                                                                                                                                                                                                                                                             
 Notes to the condensed half year financial information (continued)  
                                                                                                                                                                                                                                                                                                                                                                                               
 4.                                                                  Segmental information (continued)                                                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                                                                                                                                                               
                                                                     Geographic analysis of revenue based on location of customers                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                             Unaudited                                                          
                                                                                                                                                                                                                                                                                                                                                             Half year ended 30 September2015  Half year ended30 September2014    
                                                                                                                                                                                                                                                                                                                                                             £m                                £m                                 
                                                                     UK                                                                                                                                                                                                                                                                                      664.2                             671.5                              
                                                                     Rest of European Union                                                                                                                                                                                                                                                                  4.5                               5.0                                
                                                                     China                                                                                                                                                                                                                                                                                   12.2                              13.7                               
                                                                     Rest of World                                                                                                                                                                                                                                                                           8.2                               2.1                                
                                                                                                                                                                                                                                                                                                                                                             689.1                             692.3                              
                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                     The Group's country of domicile is the United Kingdom and is the country in which it generates the majority of its revenue. The Group's non-current assets are located in the United Kingdom.                                                                                         
                                                                                                                                                                                                                                                                                                                                                           
 5.                                                                  Exceptional items                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                                                                                                           
                                                                     Exceptional items are those that in the Directors' view are required to be separately disclosed by virtue of their size or incidence to enable a full understanding of the Group's financial performance.                                                                             
                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                             Unaudited                                                          
                                                                                                                                                                                                                                                                                                                                                             Half year ended 30 September2015  Half year ended30 September2014    
                                                                                                                                                                                                                                                                                                                                                             £m                                £m                                 
                                                                     Operating costs                                                                                                                                                                                                                                                                                                                                              
                                                                     Pension costs - past service credit                                                                                                                                                                                                                                                     -                                 14.9                               
                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                     Tax charge on exceptional items                                                                                                                                                                                                                                                         -                                 (3.0)                              
                                                                                                                                                                                                                                                                                                                                                                                                                                  
                                                                     Credit for the period after tax                                           

- More to follow, for following part double click  ID:nRSa1477Hd

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