Profits plunge for Pennon as inflation bites

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The highly publicised poor performances of certain water providers have had major bearing on consumers' view of the utilities sector
The highly publicised poor performances of certain water providers have had major bearing on consumers' view of the utilities sector

Profits dipped for Pennon this half year as inflationary pressures get the better of the water services group.

Underlying profit before tax slumped 75 per cent compared to 2021 levels, reflecting the near-term pressures on earnings from inflation driven power pricing and financing costs.

Profit before tax was £20.9m for Pennon, down from £79.9m in H1 2021/22.

However, underlying revenue jumped nearly ten per to £425.5m in the half year thanks to growth in non-household demand both in and out of region, contract wins from Pennon Water Services, and a full six-month contribution from Bristol Water.

Chief exec Susan Davy said the results were “resilient”, with a focus on long-term growth.

The company announced a further increase in  investment in water resilience schemes of around £45m to repurpose ex-quarries and mines and  introduce de-salination units to ensure resilience to 2050 is in place now. This brings the total investment into initiatives to around £75m.