Pennon Group (LON:PNN) Releases Earnings Results

Pennon Group (LON:PNN) issued its quarterly earnings results on Wednesday. The company reported GBX 28.30 earnings per share for the quarter, Digital Look Earnings reports. The business had revenue of GBX 129.14 billion for the quarter. Pennon Group had a return on equity of 3.09% and a net margin of 4.73%.

Here are the key takeaways from Pennon Group’s conference call:

• Pennon reported a return to profitability in the year, with EBITDA up 55% and underlying operating profit more than doubling to GBP 326 million, driven by higher revenues and efficiency gains.
• The company proposed a 29.29p per share dividend, in line with policy, while group CapEx remained elevated at GBP 644 million to support continued investment in the asset base.
• Operational performance was challenged by extreme weather, leading to net ODI penalties, and Pennon received a provisional one-star EPA rating after four WINEP projects were not completed by year-end.
• Management highlighted improvement in wastewater performance, including a 33% reduction in absolute pollution incidents and a 17% decline in storm overflow spills, with spill duration down about 25% year on year.
• New CEO Keith Haslett outlined a strategic reset focused on customer transformation, culture, operating model simplification, asset reliability, and capital delivery, while also submitting over GBP 250 million of cost change claims to Ofwat.

Pennon Group Stock Performance

Shares of LON PNN opened at GBX 486 on Thursday. The business’s 50-day simple moving average is GBX 529.18 and its 200-day simple moving average is GBX 539.45. The company has a debt-to-equity ratio of 357.72, a quick ratio of 1.54 and a current ratio of 1.62. Pennon Group has a 52 week low of GBX 439.40 and a 52 week high of GBX 605. The firm has a market cap of £2.29 billion, a price-to-earnings ratio of 101.25, a P/E/G ratio of 8.20 and a beta of 0.54.

Analysts Set New Price Targets

PNN has been the topic of a number of research reports. UBS Group reiterated a “buy” rating and issued a GBX 650 target price on shares of Pennon Group in a report on Friday, June 5th. JPMorgan Chase & Co. upped their price objective on shares of Pennon Group from GBX 565 to GBX 615 and gave the company a “neutral” rating in a research note on Monday, April 13th. Finally, Citigroup lifted their target price on shares of Pennon Group from GBX 628 to GBX 636 and gave the company a “buy” rating in a research note on Wednesday, March 11th. Four investment analysts have rated the stock with a Buy rating and one has given a Hold rating to the company’s stock. According to MarketBeat, the company currently has an average rating of “Moderate Buy” and an average price target of GBX 634.20.

About Pennon Group

At the top end of the FTSE 250, Pennon is an infrastructure group, focused on the UK water market is one of only three listed water companies in the UK. Operating in a stable regulatory environment with a positive outlook, we are focused on long-term sustainable growth, through disciplined capital allocation, organic and acquisitive. Our 25-year rolling licence provides predictable index-linked growth and visibility over future revenues.

We provide clean and wastewater services through our businesses across the Great South West.