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REG - Pennon Group PLC - Pennon Group Half Year Results 2015/16 <Origin Href="QuoteRef">PNN.L</Origin> - Part 6

- Part 6: For the preceding part double click  ID:nRSa1477He 

                                                                                                                                                                                                                 
   16.                                                                 Capital expenditure                                                                                                                                                                                                                                                                                                                                                                                                                    
   Unaudited                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
   Half year ended 30 September                                        Year ended 31 March                                                                                                                                                                                                                                                                                                                                                                                                                                         
   2015                                                                2015                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                       £m                                                                                                                                                                                                                                                                                                                                                                                                                                     £m                          
   Property, plant and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
   Additions                                                           145.7                                                                                                                                                                                                                                                                                                                                                                                                                                  301.4                       
   Net book value of disposals                                         7.5                                                                                                                                                                                                                                                                                                                                                                                                                                    2.0                         
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
   Capital commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
   Contracted but not provided                                         446.5                                                                                                                                                                                                                                                                                                                                                                                                                                  350.3                       
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
   17.                                                                 Contingent liabilities                                                                                                                                                                                                                                                                                                                                                                                                                 
                                                                       Unaudited                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                       Half year ended 30 September                                                                                                                                                                                                                                                                                                                                                                                                           Year ended 31 March         
                                                                       2015                                                                                                                                                                                                                                                                                                                                                                                                                                   2015                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              £m                   £m       
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                       Performance bonds                                                                                                                                                                                                                                                                                                                                                                                                                      164.2                169.8    
                                                                       Other                                                                                                                                                                                                                                                                                                                                                                                                                                  4.0                  4.0      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              168.2                173.8    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                       Performance bonds are entered into in the normal course of business.  No liability is expected to arise in respect of the bonds.                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                       The Group is subject to litigation from time to time as a result of its activities.  The Group establishes provisions in connection with litigation where it has a present legal or constructive obligation as a result of a past event and where it is more likely than not an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.                                               
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
   18.                                                                 Acquisitions                                                                                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                       On 15 April 2015 Pennon Group Plc acquired 100% of the issued share capital of Sembcorp Bournemouth Water Investments Limited (renamed 'Bournemouth Water Investments Limited') including its non-regulated subsidiaries from Sembcorp Holdings Limited for a cash consideration of £100.3m. Sembcorp Bournemouth Water Investments Limited is the holding company for Sembcorp Bournemouth Water Limited (renamed 'Bournemouth Water  
                                                                       Limited').                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                       The acquisition was in line with the Group's strategy to increase shareholder returns from the anticipated future synergies and outperformance arising from the merger into South West Water.                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                       The acquisition has been accounted for using the acquisition method. Goodwill of £42.3m has been capitalised attributable to the profitability of the acquired business and the anticipated future synergies and outperformance arising from the merger into South West Water.                                                                                                                                                         
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                       On 1 June 2015 Viridor Waste Management Limited acquired Commercial Recycling Limited's waste collection division in Dorset and Somerset for an initial £3.5m. An additional payment of up to £2.0m could be made in the future depending upon certain performance related criteria. The acquisition has been accounted for using the acquisition method.                                                                              
                                                                       
                                                                       
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
 
 
 PENNON GROUP PLC                                                    
                                                                                                                                                                                                                                                                                                                        
 Notes to the condensed half year financial information (continued)  
                                                                                                                                                                                                                                                                                                                  
 18.                                                                 Acquisitions (continued)                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                                                                  
                                                                     Provisional goodwill of £5.0m has been capitalised attributable to the profitability of the acquired business.  Final fair values of assets and liabilities plus associated goodwill will be reported in the full year results for 2015/16.  
                                                                                                                                                                                                                                                                                                                  
                                                                     No amount of goodwill related to these acquisitions is expected to be deductible for tax purposes.                                                                                                                                           
                                                                                                                                                                                                                                                                                                                  
                                                                     The residual excesses over the net assets acquired in each business combination has been recognised as goodwill.                                                                                                                             
                                                                                                                                                                                                                                                                                                                  
 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Fair values on acquisition                                                                                                                                                                                       Bournemouth Water Investments Limited           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        £m              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Intangible assets                                                                                                                                                                                                                                       2.3             
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Property, plant and equipment                                                                                                                                                                                                                           228.5           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Inventories                                                                                                                                                                                                                                             0.1             
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Trade and other receivables                                                                                                                                                                                                                             23.8            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Cash and cash deposits                                                                                                                                                                                                                                  13.8            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Retirement benefit surplus                                                                                                                                                                                                                              1.9             
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Borrowings                                                                                                                                                                                                                                              (160.2)         
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Trade and other payables                                                                                                                                                                                                                                (19.7)          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Other liabilities                                                                                                                                                                                                                                       (0.5)           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Taxation - current                                                                                                                                                                                                                                      (2.7)           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Deferred tax liabilities                                                                                                                                                                                                                                (24.8)          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Provisions                                                                                                                                                                                                                                              (0.2)           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Net assets acquired                                                                                                                                                                                                                                     62.3            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Goodwill                                                                                                                                                                                                                                                42.3            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Total consideration                                                                                                                                                                                                                                     104.6           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Satisfied by:                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Cash                                                                                                                                                                                                                                                    100.3           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Transfer of amounts due to Bournemouth Water                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 Investments Ltd                                 4.3      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        104.6           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Net cash outflow arising on acquisition:                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Cash consideration                                                                                                                                                                                                                                      100.3           
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Cash and cash deposits acquired                                                                                                                                                                                                                         (13.8)          
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        86.5            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Revenue for the period since acquisition to 30 September 2015                                                                                                                                                                                           20.2            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Profit before tax for the period since acquisition to                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 30 September 2015                               3.5      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Directly attributable costs included in other operating expenses                                                                                                                                                                                        2.9             
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                The fair value of acquired trade and other receivables on acquisition was £23.8m.  This included gross contracted amounts receivable of £17.4m, of which cash flows of £1.0m were not expected to be collected.  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

- More to follow, for following part double click  ID:nRSa1477Hg

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