Pennon Group says it has a solid platform for success over next 5 years

The Pennon Group (LON:PNN) said that its water utility business, South West Water, has a “solid platform” for continued success in the K5 regulatory period (2010 - 2015), after a successful K4 (2005-2010). In a trading update this morning Pennon told investors that it has been trading inline with expectations, in the period since 31 March 2010.

Despite 2010’s particularly dry summer, Pennon highlighted that water restrictions are highly unlikely this year, in the South West.

South West Water raised £150m through debt financing, primarily to refinance existing debt, the new 30 year £150m bond has a coupon of 5.875%. Furthermore, the company noted that since 1st April, the group has secured a further £175m of funding, including re-financing £75m of existing funding.

In reference to its recycling business, Viridor, Pennon said it remains confident that it can grow pre-tax profits over the full year.  Previously, Viridor warned that brown energy prices remain significantly lower than last year, and consequently full year power generation results will be ‘materially affected’.

That said, Pennon believes its recycling business has performed well given the weak economic conditions in the UK.

http://www.proactiveinvestors.co.uk/companies/news/20141/pennon-group-says-it-has-a-solid-platform-for-success-over-next-5-years-20141.html