Business
Interim Management Statement
Interim Management Statement.
About this update from Pennon Group Plc
[{"type":"text","content":"\n \nRNS Number : 9606O Pennon Group PLC 13 August 2014 \n\n13 August 2014\n \nPENNON GROUP PLC\n \nINTERIM MANAGEMENT STATEMENT\n \n \nOverall financial performance of Pennon Group since 31 March 2014 remains in line with management expectations. \n \n \nSouth West Water\nSouth West Water is continuing its strong financial performance with robust operational delivery and high standards of customer service and expects to complete the successful delivery of the K5 (2010-2015) regulatory contract.\n \n2014/15 profits will be impacted by the 2014/15 tariff freeze already announced. However, the revenues foregone are included in the Draft Determination for K6 (2015-2020) on an NPV neutral basis.\n \nFollowing early receipt of its Draft Determination for the K6 regulatory contract in April this year, South West Water is able to accelerate a number of key projects (eg bathing water improvements) ahead of significant legislative changes. With the company's track record of efficiency and outperformance, South West Water is well placed to deliver its business plan in K6 and will have an opportunity to outperform the assumed returns on equity.\n \n \nViridor\n \nViridor continues its transformation from being predominantly a landfill operator to being one of the country's leading recycling, renewable energy and waste management companies.\n \nAs flagged at the Preliminary Results, Viridor's H1 2014/15 EBITDA will be materially lower than in H1 2013/14. However with five Energy Recovery Facilities (ERFs)(1) scheduled to come on stream this year H2 EBITDA is expected to increase significantly and result in 2014/15 full year EBITDA exceeding 2013/14.\n \nYear to date performance has primarily been impacted by the expected continuation of the decline of the landfill business. Also, as expected, landfill gas generation has declined from peak and the recycling business has been moderately affected by near term weakness in recycling prices. \n \nViridor has been investing to improve the productivity of its assets and quality of its recyclate products. The Rochester plastics plant is expected to come on stream in the next month and the Scottish glass separation plant shortly thereafter. The strategic focus on improving the productivity ...