Pennon Group PLC PNN Trading Statement

  Pennon Group PLC (PNN) - Trading Statement

RNS Number : 2545R
Pennon Group PLC
15 November 2012


Pennon is today providing an update on trading performance ahead of the Half
Year Results announcement on 29 November 2012.

As flagged in the Interim Management Statement of 17 August 2012, Viridor's
performance has been impacted by recyclate prices which have remained under
pressure reflecting world economic conditions. Overall average price per
tonne for the half year fell to £103, 17.6% lower than for H1 2011/12. However
prices were significantly lower than this by the end of the second quarter.
Recycling revenues for H1 2012/13 are expected to be £18.8m lower than the
same period last year. While we have taken action to reduce our cost base and
have recovered about half of the impact of the reduction in recyclate prices
through the terms of customer supply contracts and cost reductions, PBIT plus
joint ventures is expected to be £27.8m in H1 2012/13, down 30.5% on H1
2011/12. Analyst forecasts for the full year currently assume a recovery in
recyclates prices in the second half of the year. However, we have not seen
an improvement in prices to date in the third quarter and are therefore
cautious on the prospects for recyclate prices. Accordingly we expect
Viridor's PBIT plus joint ventures for the full year to be somewhat below the
bottom of the current range of market expectations.

However, Viridor continues to make strong progress on its growing pipeline of
PPP/EfW projects which underpins its long term profit momentum. Since March
it has reached financial close on both the Glasgow DBFO and the South London
PPP, become preferred bidder on the Peterborough PPP and achieved a planning
relaxation for its proposed Dunbar EfW enabling it to serve the whole of

South West Water is continuing its strong operational performance against the
2010/15 regulatory contract with further advances in operating efficiency and
customer service. Rigorous cost control, efficiency delivery and stable
interest costs are expected to deliver profit before tax for the half year for
South West Water up 10% to more than £83m.

We expect to report Pennon Group profit before tax for the half year up over
3% to £111m and to announce an interim dividend up 6.6% to 8.76p per share.

A conference call will be held this afternoon (Thursday 15 November) at

Dial in details are as follows:

Telephone number: +44 (0) 20 3003 2666

Password: Pennon

Further information on Pennon, South West Water and Viridor can be found on
the Group's website,

Cautionary statement in respect of forward-looking statements

This Statement contains forward-looking statements relating to Pennon Group's
operations, performance and financial position based on current expectations
of, and assumptions and forecasts made by, Pennon Group management. Words
such as "aims", "anticipates", "believes", "continue", "could", "due",
"estimates", "expects", "goal", "intends", "may", "plans", "projects",
"remains", "seeks", "should", "targets", "will" and related and similar
expressions as well as statements in the future tense identify forward-looking
statements. By their very nature forward-looking statements are inherently
unpredictable, speculative and involve risk and uncertainty because they
relate to events and depend on circumstances that will or will not occur in
the future. Various known and unknown risks, uncertainties and other factors
could lead to substantial differences between the actual future results,
financial situation, development or performance of the Group and those
expressed or implied in this statement. These risks, uncertainties and
factors include, but are not limited to, changes in the economies and markets
in which Pennon Group operates; changes in the regulatory and competition
frameworks in which Pennon Group operates; the impact of legal or other
proceedings against or which affect Pennon Group; and changes in interest and
exchange rates. Further details of Pennon Group's principal risks and
uncertainties are set out in Pennon Group's 2012 Annual Report which can be
viewed online at Undue reliance
should not be placed on forward-looking statements which are made only as of
the date of this Statement. Nothing in this Statement should be construed as
a profit forecast. The Group accepts no obligation publicly to revise or
update these forward-looking statements or adjust them as a result of new
information or for future events or developments, except to the extent legally


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