I know that the mode for these threads tends to be smaller cap stocks but Pennon is looking so good at present I was interested to see if anyone else out there is holding or thinking of buying. The SP is on a fantastic run, it pays a nice fat dividend and even if the water regulators decision on prices was not what any of the water companies were looking for, Pennon is probably the least affected and the most favoured by analysts. Seems to me to be a winning combination!

Half Yearly Report

H1 2013/14 FINANCIAL AND CORPORATE HIGHLIGHTS

· Profit before tax(1) up 3.5% to £110.9m

- South West Water up 7.6% to £87.3m
- Viridor down 28.8% to £15.3m

· Viridor PBIT plus joint ventures down 15.8% to £23.4m

- Viridor PBIT plus joint ventures up 31% compared with H2 2012/13

· Adjusted earnings per share up 2.6% to 23.8p(1) (2) (3)

· Dividend

- Interim dividend per share up 7.2% to 9.39p

· Capital investment(4) up 9.0% to £205m

· Strong liquidity and funding position

- £210m facilities secured/renewed since 31 March 2013

- Total of £1,132m cash/committed facilities at 30 September 2013

· Pennon Group achieved top 10% position in FTSE350 Carbon Disclosure Project participants for quality of disclosure

GROUP OVERVIEW(1)

· Revenue up by 5.3% to £667.0m
· Operating profit up by 2.6% to £139.7m
· Net interest payable reduced by 5% to £29.6m
· Profit before tax up 3.5% to £110.9m
· Adjusted earnings per share up by 2.6% to 23.8p(2). Basic earnings per share increased from 25.4p to 29.4p

· Capital investment(3) up 9.0% to £205.1m
· Net borrowings £2,098m, an increase of £89m since 31 March 2013. Gearing, being net borrowings to (shareholders' funds plus net borrowings) was 65% (2012/13 - 65%). Net debt includes £549m for EfW plants under construction (Runcorn II, Exeter, Oxford, Cardiff and Glasgow)

· Substantial cash resources and committed facilities of £1,132m(4) to fund future investment - well placed in current financial market conditions

· South West Water net debt to RCV was 56.1% (31 March 2013 - 54.9%)

· Net interest cover (excluding pensions net interest, IFRIC 12 contract interest receivable and discount unwind on provisions) was 5.2 times (H1 2012/13 - 4.6 times)

· Average debt maturity 22 years

· Fair value of debt £261m less than book value

Ex-divi wed 29th Jan 2014 (9.39p)

Hoping for 700p before the divi date.

Hoping for 650p before divi date. :-)

Hmmmm......looks like you will get your wish skinny. Bloody shorters! ;o)

:-)

Well, you've had your run skinny, now it's my turn! 660p......more please.

Harry - I wasn't short - I was looking for an entry - which I have as of yesterday.

So I agree - more please.

Pushing ahead and not far off the 200 DMA. Might be confronted by the dilemma of taking profit pre-divi date.......hopefully!

"We (J P Morgan) retain our Overweight recommendation for PNN and our Neutral recommendation for UU, although we have reduced our price targets for both companies by 6.0% and 1.7% respectively to 700p and 735p."

I can live with that! :-)

What do you reckon skinny? A concerted push through the 200 DMA on the cards?

Yes - 680 looks quiet pivotal - like you , I'm unsure whether to hold for the dividend or trade it.

Divi isn't really that great, so if the sp gets close to 700p I will probably take profit. (hopefully before you cash in and move the sp!)

Nicely through the 200. Approaching decision time.

Goldman Sachs Neutral 688.50 684.00 - 758.00 Retains

Nearing your TP Harry (ex tomorrow), these and SVT strong today though!

Deutsche Bank Hold 691.00 650.00 650.00 Reiterates

Sold a few days ago with a moderate profit and punted all into QPP. No regrets.....so far!

StockMarketWire.com
Waste and water firm Pennon Group said its financial performance remains on track to meet expectations, with South West Water outperforming.

South West Water
South West Water is continuing its robust performance against the 2010-2015 regulatory contract and is well placed to outperform its assumptions. Despite the exceptional weather and resultant flooding in the South West, the company continues to deliver effective operational performance and high standards of customer service, underpinned by strong financial performance.

On 2 December 2013, South West Water submitted to Ofwat its Business Plan for the next five year period, 2015-2020 (K6). The plan reflects the most extensive customer/ stakeholder engagement and research ever undertaken by the company and feedback indicates it has achieved 84% acceptability from customers. Details of the Business Plan and an investor summary can be found on the South West Water website, http://waterfuture.southwestwater.co.uk/investor-summary.

On 19 December 2013, Ofwat published a revision to the ongoing K6 price review process. As part of this revision on 27 January 2014 Ofwat published risk and reward guidance for the industry. This included guidance on key financial parameters, including the cost of capital for the K6 period. The company is currently reviewing this guidance.

Viridor

As stated previously, this is a transitional period for Viridor. The company has made excellent progress in establishing its Energy from Waste ("EfW") business which will transform Viridor into a leading player in the UK renewable energy sector. Notwithstanding the adverse weather and difficult trading conditions, Viridor is successfully holding operational performance broadly in line with management expectations and operating contribution is slightly ahead of last year. PBIT plus joint ventures is still expected to be broadly similar to last year but has been impacted by increased pension costs as a result of auto-enrolment and by the outage previously flagged at Lakeside.

Since 30 September 2013 Pennon Group Plc has:

· Drawn down £60m from the EIB and a further £130m facility being progressed

· Renewed and increased a £60m term loan to £100m

· Drawn down a £30m Revolving Credit Facility (RCF)

The Company intends to announce its Preliminary Results for 2013/14 on Tuesday 3rd June 2014.

StockMarketWire.com
Analysts at Deutsche Bank believe the recent announcement from OFWAT on financial parameters and incentives is helping improve regulatory visibility, specifically on returns, and should enable UK water companies to outperform, going forward. The broker believes another likely outcome of the review will be to provide companies with flexibility over cashflow which, in turn, should support steady dividend growth. Deutsche has therefore upgraded its recommendations for Severn Trent (LON:SVT) and Pennon (LON:PNN) to "buy" from "hold" and reaffirmed its existing "buy" rating on United Utilities. Target price have been increased across the board with SVT rising to 2,000 pence per share (from 1,550 pence), PNN to 800 pence (from 650 pence) and UU to 1,000 pence (from 800 pence). "Within a year we believe the sector will have regulatory and dividend visibility and a resumption of bid speculation is possible," the broker said in a note to clients. "These factors could drive a re-rating of listed water stocks to levels comparable with UK and US regulated peers." Given an implied upside of around 30 per cent to its upgraded target price, Deutsche highlights United Utilities as its top pick in the sector.