Pennon Group (LON:PNN) Releases Quarterly Earnings Results

Pennon Group (LON:PNN) released its quarterly earnings results on Wednesday. The company reported GBX 28.30 earnings per share 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 firm 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%

PNN stock opened at GBX 491.60 on Wednesday. The company has a market cap of £2.32 billion, a price-to-earnings ratio of 102.42, a PEG ratio of 8.20 and a beta of 0.56. The company has a current ratio of 1.62, a quick ratio of 1.54 and a debt-to-equity ratio of 357.72. Pennon Group has a 12 month low of GBX 439.40 and a 12 month high of GBX 605. The firm has a 50-day moving average of GBX 529.79 and a two-hundred day moving average of GBX 539.39.

Wall Street Analyst Weigh In

PNN has been the subject of several research analyst reports. UBS Group restated a “buy” rating and set a GBX 650 price target on shares of Pennon Group in a research report on Friday, June 5th. Citigroup increased their price objective on shares of Pennon Group from GBX 628 to GBX 636 and gave the company a “buy” rating in a report on Wednesday, March 11th. Finally, JPMorgan Chase & Co. increased their price objective on shares of Pennon Group from GBX 565 to GBX 615 and gave the company a “neutral” rating in a report on Monday, April 13th. Four equities research analysts have rated the stock with a Buy rating and one has issued a Hold rating to the company’s stock. According to MarketBeat.com, Pennon Group currently has an average rating of “Moderate Buy” and a consensus 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.