Pennon Group (LON:PNN) Posts Quarterly Earnings Results

Pennon Group (LON:PNN) issued its quarterly earnings data on Wednesday. The company reported GBX 28.30 earnings per share (EPS) for the quarter, Digital Look Earnings reports. Pennon Group had a return on equity of 6.61% and a net margin of 7.09%.The business had revenue of GBX 129.14 billion for 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 Performance

LON PNN opened at GBX 478.80 on Friday. The business’s 50-day moving average price is GBX 528.11 and its 200 day moving average price is GBX 539.24. Pennon Group has a twelve month low of GBX 439.40 and a twelve month high of GBX 605. The company has a market capitalization of £2.26 billion, a PE ratio of 99.75, a price-to-earnings-growth ratio of 8.20 and a beta of 0.54. The company has a current ratio of 1.51, a quick ratio of 1.54 and a debt-to-equity ratio of 347.81.

Analyst Ratings Changes

Several equities analysts recently weighed in on the company. Citigroup increased their target price on Pennon Group from GBX 628 to GBX 636 and gave the stock a “buy” rating in a research report on Wednesday, March 11th. UBS Group reiterated a “buy” rating and set a GBX 650 target price on shares of Pennon Group in a research report on Friday, June 5th. Finally, JPMorgan Chase & Co. increased their target price on Pennon Group from GBX 565 to GBX 615 and gave the stock a “neutral” rating in a research 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 company’s stock. Based on data from MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus price target of GBX 634.20.

About Pennon Group

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.