Utilities group Pennon has said it is 鈥渙n track鈥 to deliver financial results in line with bosses鈥 expectations after completing the merger of South West Water with Bristol Water.

In a trading update on Tuesday (March 14), the Exeter-based company told investors, following the CMA鈥檚 approval of its 拢425m takeover of Bristol Water last year, the combined water business was now operating under one licence, as of last month.

The FTSE firm which provides water to around 3.5 million people across the South West, said it was reinvesting to increase water resilience and enhance the environment.

It comes after South West Water came under the glare of regulator Ofwat last year over its environmental performance and sewage treatment works.

The watchdog opened an additional enforcement case at South West Water in June amid an industry-wide probe, as it said concerns were growing over the supplier鈥檚 operation of sewage works and environmental performance.

Pennon said it had improved its wastewater pollutions performance by more than 50% in two years, including a 75% reduction in serious pollutions in 2022 from 8 to 2, alongside its "best ever" wastewater treatment works compliance at 99.4%.

The group said it was accelerating plans to achieve around 50% self-generation by 2030, and it was in 鈥渁dvanced discussions鈥 over possible large scale solar developments across the 海角视频, ranging up to 60 MW. The group said these opportunities would initially be funded through a group capital allocation of around.拢160m.

It added that after 鈥渟ome of the driest, hottest weather on record鈥 last year and a 鈥渧ery dry鈥 February, its water resilience initiatives, including the purchase of Hawkstor reservoir in Cornwall last year, were 鈥減rogressing well鈥.

Pennon said it would publish details of its full-year performance on June 1. It comes after the company saw half-year profits slump by three quarters after it was hit by a doubling of power costs amid the energy crisis.

Last November the parent firm of South West Water said pre-tax profits fell by 75.1% to 拢22.5m in the six months to September 30, despite revenues rising by 9.3% to 拢425.5m.

The business said it would deliver 鈥渂elow inflation bill increases鈥 for its customers in 2023/24.

Read next:

Like this story? Why not sign up to get the latest South West business news straight to your inbox.