Pennon dismisses claims of company break-up and eyes share offer to customers

Pennon has dismissed reports that it intends to break off the waste management arm of its business.

Chris Loughlin, chief executive at Pennon Group, told Utility Week Viridor was performing “exceptionally well” and the idea the companies were to be split up was pure speculation.

He explained the group had gone through a phase of investment to add 11 large energy recovery facilities across the country.

“We have invested between£1.5 billion and £2 billion in facilities across the country and those are now coming online and starting to generate strong revenues and it’s time to start thinking about what the next phase is for Pennon.”

The waste management business was formerly a part of South West Water but renamed as it grew to be the largest UK recycler and UK-owned energy recovery infrastructure player.

“In our trading statement we said its time for a strategic review,” he said. “We simply announced it’s time to take stock, as we routinely do, and think through the future for the business.”

Meanwhile South West Water is preparing to launch a customer share scheme called Water Share Plus from April next year.

Loughlin said if the company outperformed on its regulatory targets, each customer would receive a share in the company, thus entitling them to attend AGMs and have a voice in the running of the company.

“We give them a stake and a voice,” Loughlin explained. “It taps into some emotions of why people think there is merit in renationalisation: is it “our water company” and is it serving the needs of local people and communities.”

Customers can continue to build on their shares and increase their ownership following company research that said the majority of its customers were interested in having a share of the company.