Pennon updates on Covid impact and plans for Viridor funds

Pennon, the parent company of South West and Bournemouth Water, has said it expects revenue for this financial year to take a £10 million hit from coronavirus.

In a trading update ahead of its half-year results in November, the company said it remains in a strong financial position with more than £3 billion in cash and committed facilities.

Much like United Utilities’ trading update earlier this week, Pennon said reduced non-household consumption has been partly offset by an increase in domestic demand during lockdown. Pennon Water Services has implemented cash collection initiatives to minimise bad debt risk, which the company will monitor as the situation evolves and customer protections put in place by Ofwat and MOSL wind down.

Following the sale of the Viridor business in July, the group embarked on a debt restructure programme and repaid around £600 million and contributed £36 million to pension schemes.

The company said it continued to weigh up options for deploying the proceeds of the Viridor sale and was considering market opportunities.

It also revealed that South West Water has signed a new sustainable £30 million long-funding finance lease  as well as extending a maturing lease for the same amount.

During the six-month period to 30 September the company completed its expansion into the Isles of Scilly after securing the license to take over supply and wastewater services to the archipelago.

Previously the islands relied largely on desalination. The company said it plans to invest significantly in infrastructure and make improvements for customers and the environment.

Earlier this month the company launched WaterShare+ to share outperformance payments from AMP6 with billpayers and the opportunity for customers to hold a share in the company.