Despite tough macro-economic conditions Pennon is expecting results for the half year to September 2022 to be in line with expectations.
There have been operational challenges, not least the driest weather in 100 years and significant population increases in the South West of England, where it provides water and wastewater services. Pennon is meeting these challenges head on and expects a good report from the regulator.
Derren Nathan, Head of Equity Research at Hargreaves Lansdown:
“A growing population in the South West should be good news for Pennon as long as it’s infrastructure remains well invested. In the short term there may be further hits to energy and financing costs.
Earnings per share estimates are down about three quarters over the last 12 months, That being said its done well to avoid a downgrade today, and Pennon’s drive towards 50% self-generation from renewable electricity should help to reduce volatility in the cost base going forward.”
