Pennon Group (LON:PNN) Releases Earnings Results

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

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 Down 3.1%

LON PNN opened at GBX 491.60 on Wednesday. The stock has a market cap of £2.32 billion, a PE ratio of 102.42, a P/E/G ratio of 8.20 and a beta of 0.56. Pennon Group has a fifty-two week low of GBX 439.40 and a fifty-two week high of GBX 605. The business has a 50 day moving average price of GBX 529.79 and a two-hundred day moving average price of GBX 539.39. The company has a quick ratio of 1.54, a current ratio of 1.62 and a debt-to-equity ratio of 357.72.

Wall Street Analyst Weigh In

A number of analysts have recently issued reports on PNN shares. UBS Group reiterated a “buy” rating and set a GBX 650 target price on shares of Pennon Group in a report on Friday, June 5th. Citigroup boosted their target price on Pennon Group from GBX 628 to GBX 636 and gave the stock a “buy” rating in a report on Wednesday, March 11th. Finally, JPMorgan Chase & Co. boosted their target price on Pennon Group from GBX 565 to GBX 615 and gave the stock a “neutral” rating in a report on Monday, April 13th. Four research analysts have rated the stock with a Buy rating and one has assigned a Hold rating to the stock. Based on data from MarketBeat, Pennon Group has a consensus rating of “Moderate Buy” and an average target price of GBX 634.20.

Pennon Group Company Profile

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.