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Pennon Group PLC (PNN)

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Thursday 30 July, 2009

Pennon Group PLC

Interim Management Statement

RNS Number : 5430W
Pennon Group PLC
30 July 2009

30 July 2009



Financial performance at Pennon Group Plc since 31 March 2009 has been in line with management expectations.  

South West Water is now in the fifth year of the K4 period (2005 - 2010) and remains on target to meet the current regulatory contract. OFWAT's Draft Determination for the K5 period (2010 -2015) was published on 23 July, and allows for a weighted average cost of capital of 4.5% and a K5 capital programme of approximately £640m.  South West Water is considering the Draft Determination and will be responding to OFWAT prior to its Final Determination in November. Circa £15m of required investment identified in the K5 Final Business Plan is being advanced into 2009/10 in line with Government plans to stimulate infrastructure spending during the economic downturn.

Viridor is performing well in current conditions and remains confident of delivering continued full year growth in profits.  In the  2008/09 Preliminary Results announcement we noted the very high recyclate prices in the first half of 2008/09, which have now returned to trend, and the closure of the Beddingham landfill since the year end. These factors will impact the first half year results compared to the same period last year.   Financial close on the Greater Manchester Waste PFI 25 year contract was achieved on 8 April. London Recycling Limited, the independent resource management company, was acquired in June for a cash consideration of £11.0m.

£25m of the £43m of bank facilities required to be renewed by the end of the current calendar year were renewed in the first quarter of 2009/10 and increased to £35m.

The Company is also announcing today that it intends to make an offering of approximately £120m of senior unsecured convertible bonds due 2014 which will be convertible into fully paid ordinary shares.  The net proceeds of the offering will be used for general corporate purposes and to refinance acquisitions including London Recycling Limited.  Further details are included in a separate notice.

Further information on Pennon, South West Water and Viridor can be found on the 

Group's website,

Pennon intends to announce its Half Year Results on Thursday19 November 2009.

For further information, please contact:



David Dupont - Group Director of Finance        01392 443998

Jo Finely - Investor Relations Manager              01392 443401


Sally Hogan                                                        0207 251 3801

Cautionary statement in respect of forward-looking statements

This document contains forward-looking statements relating to the Pennon Group's operations, performance and financial position based on current expectations of, and assumptions and forecasts made by, Pennon Group management. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans', 'targets', 'goal' or 'estimates'. 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 document. 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. Undue reliance should not be placed on forward-looking statements which are made only as of the date of this document. Nothing in this document 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 required.


30 July 2009

End transmission

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