Britons moving to Cornwall and Devon during the pandemic boost revenues at water firm Pennon
- Pennon has seen a ‘substantial’ increase in population in the regions it serves
- It has seen ‘record’ water usage in the last six months – and higher revenues
- It expects profits to be in line with expectations, but shares are in the red
The exodus of Britons towards Cornwall and Devon triggered by the pandemic is boosting revenues at London-listed water firm Pennon.
The South West Water owner said Covid has led to a ‘substantial’ increase in population in the regions it serves, which also include parts of Dorset and Somerset, and the Isles of Scilly.
This, and local businesses ramping up demand as they reopened after lockdowns, have resulted in ‘record’ water usage and an increase in overall revenue in the past six months.
Pennon said the pandemic has led to a ‘substantial’ increase in population in the regions it serves, which include Cornwall and Devon (Pictured: the seaside village of St. Ives in Cornwall)
However, Pennon, which publishes its half-year results on 30 November, said it expected profits to be in line with expectations, as increased costs have been offset by higher revenues.
It also warned that pressure on its operational network remained ‘high’ due to the increased demand and ‘sustained’ increase in population in those regions.
Shares in the FTSE 250 firm fell 3.3 per cent to 1,140p in morning trading on Tuesday.
The company said the delivery of its £82million green recovery plan, which aims to improve the quality of the water in rivers and protect the environment, was now underway.
It comes as its South West Water arm was again named as being one of the worst performers in the sector this year for allowing raw sewage to spill into rivers and the sea.
In its annual report published in July, the UK Environmental Agency said South West Water performed ‘significantly below target’ for pollution for the tenth year in a row.
Its poor record comes as Pennon is a cash-rich company, which earlier this year announced that shareholders would be awarded £1.9billion in payouts.
Some £1.5billion in the form of special dividends and the remaining £400million through a share buyback scheme, which is underway.
The group also recently bought Bristol Water in an £814million deal following its sale of waste management firm Viridor in July last year to private equity house KKR for a massive £3.7billion.
Chief executive Susan Davy said: ‘Pennon Group is on track to deliver resilient financial performance in line with management expectations.
‘At the same time we are delivering a step change in environmental performance’.