Pennon eyes acquisitions as it sits on £3bn cash pile
Water utility firm Pennon today said it was eyeing acquisition opportunities as it expects to end the financial year with over £3bn of cash.
The firm said it had established a sustainable capital structure as it continued a review of growth opportunities benchmarked against a return of capital to shareholders.
The FTSE 250 firm said it plans to reinvest the money gained from selling its former waste business Viridor for £4.2bn.
“Pennon believes there is significant value potential from the reinvestment of the Viridor sale proceeds in the UK water sector and continues to narrow down its review of potential growth opportunities,” the company said in a statement.
“In the event a major value accretive investment opportunity is not available, Pennon expects to make a substantial return of capital to shareholders.”
The firm’s South West Water arm performed particularly well, with Pennon expecting a doubling of base returns on regulated equity to 3.9 per cent.
Meanwhile, its business to business water retailer, Pennon Water Services, also continued to win new contracts.