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Pennon Group PLC on Wednesday said it is well positioned for the future, citing a diversified debt portfolio, as it announced a higher dividend for shareholders, even as it swung to a half-year loss. The Exeter, England-based water utility company turned to a pretax loss of £38.8 million in the six months to September 30 from a profit of £3.2 million a year prior. Revenue rose 18% to £527.2 million from £448.6 million. Notably, other operating costs increased to £270.4 million from £202.3 million, while employment costs increased to £80.5 million from £61.3 million. Finance costs increased to £96.5 million from £83.0 million. Pennon declared an interim dividend of 14.69 pence, up 4.6% from 14.04p a year ago. Looking ahead, Chief Executive Officer Susan Davy said: ‘Overall, we are well positioned for the future, with lower revenues protected by regulatory mechanisms, as we continue to focus on sustainable growth. Our financial position remains resilient to the challenges ahead, with good liquidity and a diversified debt portfolio. Our plans to restructure the business, as well as the benefits being delivered through integration of Sutton & East Surrey Group [SES] into our group, will allow us to deliver efficiently as we move forward.’ Pennon expects continued elevated non-commodity power costs in South West Water to be partially offset by increasing efficiency savings. For the current financial year, which ends on March 31, Pennon anticipates revenue to be higher than the £907.8 million it had reported for financial 2024, with operating costs, depreciation and net interest charge also expected to be higher. The company said it is tackling sewer overflow spills through its WaterFit 2025 programme, preventing about 12,500 spills with over 350 interventions, adding that two thirds of its top spillers in 2023 were resolved this year. In September, Pennon had announced rising cases of sewage spills and a hit of about £16 million from the parasite contamination crisis in Devon earlier this year. The group had said it racked up the costs from the contamination incident in Brixham, after paying compensation to affected households, providing bottled water for two months, and after ‘extensive’ action to clean the network. The outbreak in May left some people in hospital and hundreds of others were ill after contamination of the water supply by cryptosporidium, a parasite which causes sickness and diarrhoea. About 17,000 households and businesses in the Brixham area of Devon, supplied by South West Water SWW, were issued with a ‘boil water’ notice in May, as scores of reported cases of illness emerged in the town. Pennon shares rose 2.3% to 593.50 pence each on Wednesday morning in London. Copyright 2024 Alliance News Ltd. All Rights Reserved.
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