Shareholders in South West Water鈥檚 parent firm could be in for a windfall 鈥 if the company can鈥檛 find another business to buy with the 拢3billion it still has washing about from selling its waste management arm.
The Exeter-headquartered Pennon said it is in a strong financial position with 鈥渆xpected cash and committed facilities鈥 amounting to well in excess of 拢3billion.
In at statement to investors, FTSE 100 company Pennon said it believes there is significant potential from the reinvesting the cash it received for selling its Viridor division for 拢4.2billion in 2020.
The sale of the waste management business to private equity firm KKR left it with 拢3.7billion in cash and it has been looking at investing into the 海角视频 water sector.
Pennon said it continues to 鈥渘arrow down its review of potential growth opportunities鈥. In late 2020 it was and earlier in the year chief executive Susan Davy of another company in an interview with Business Live, saying: 鈥淲e are looking at growth opportunities in the 海角视频 water sector.鈥
In its trading statement, ahead of announcing full-year results in June, it said that if it can鈥檛 find a suitable acquisition then it will pay shareholders a big bonus.
The statement read: 鈥淚n the event a major value accretive investment opportunity is not available, Pennon expects to make a substantial return of capital to shareholders. The group expects to provide clarity on this position by the time of its full year results on June 3, 2021.鈥
In 2020 Pennon, the largest company in the South West according to the Western Morning News鈥 annual listing,, many of whom decided to take it as shares rather than a cut to their bill.
In its statement to the stock market, Pennon stressed it is on track to deliver resilient financial results in line with management expectations.
It said there was disciplined management of the 拢3.7billion net proceeds from the Viridor sale and it has established a sustainable capital structure using about 拢1billion utilised to efficiently cut its debt pile, leaving a sustainable position of about 拢200million in gross debt.It also paid 拢36million in pension contributions during 2020/21.
The statement also said the firm had seen resilient delivery of critical services during the pandemic, and the financial impact of the Covid crisis was in line with expectations and its capital investment programme was 鈥渄elivering improvements in the areas that matter most for customers whilst supporting the regional economy鈥. Its Pennon Water Services business-to-business water retailer continues to win new contracts, with about 拢20million in new contracts.
The statement said that during the second half of 2020/21 Pennon saw a net increase in demand and associated revenues as increased household demand more than offset a decline in non-household demand driven by Covid-19 related restrictions.
鈥淥perational costs have increased in line with these higher levels of demand, and we have worked to maximise the safety and wellbeing of our customers and our employees, whilst delivering improvements to services,鈥 the company said.
