Pennon Group FY Continuing Group Underlying Pretax Profit Declines

Pennon Group (PNN.L) reported, for Continuing Group and Viridor, pretax profit of 301.5 million pounds for fiscal 2019/20, an increase of 15.8% from prior year. Earnings per share on a statutory basis reduced by 6.7% to 47.7 pence driven by the approximately 41 million pounds non-underlying deferred tax charge relating to the change in tax rate. Group underlying profit before tax was 287.6 million pounds, an increase of 2.6%. Earnings per share on an underlying basis increased by 6.7% to 61.7 pence.

For the Continuing Group, fiscal year statutory earnings per share was down 6.7% to 47.7 pence reflecting the deferred tax charge from changes in enacted headline rates. Underlying profit before tax declined to to 183.0 million pounds from 191.7 million pounds, last year. Adjusted earnings per share was up 6.7% to 61.7 pence.

Fiscal year Group revenue declined by 6.0% to 1.39 billion pounds. The majority of the reduction was due to the planned cessation of the Greater Manchester recycling operating contract and lower landfill tax receipts in Viridor. For the Continuing Group, revenue was up marginally, to 636.7 million pounds from 632.6 million pounds.

For 2019/20, the Board has recommended a final dividend of 30.11 pence. Together with the interim dividend, this will result in a total dividend of 43.77 pence, an increase of 6.6% from last year.The Board has evaluated the Group’s dividend for 2019/20 in light of the COVID-19 pandemic and has concluded that it is appropriate for Pennon to continue to deliver on its dividend commitment.

The Group has a cash and liquidity of 1.6 billion pounds. The completion of the Viridor disposal is expected early summer 2020.

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