Pennon grows profits in H1 despite Viridor weakness

28th Nov 2013 07:44

- Pre-tax profit rises 3.5 per cent in H1- South West Water makes up for Viridor weakness- Dividend raised by 7.2 per centStrong growth at Pennon's South West Water business made up for a slump in profits at its Viridor waste management business during the first half, helping the group's bottom line inch higher over last year.The utilities infrastructure company said that pre-tax profit totalled £110.9m during the six months to September 30th, up 3.5% from the £107.1m reported the previous year. Adjusted earnings per share were up 2.6% at 23.8p.South West Water profits rose 7.6% to £87.3m while Viridor profits dropped 28.8% to £15.3m.Group revenues rose 5.3% to £667m from £633.7m. Meanwhile, the interim dividend was hiked by 7.2% to 9.39p per share, in line with its policy to grow the payout by 4% per annum above inflation until next year."I am pleased to report further progress in the group in the half year," said Chairman Ken Harvey.He revealed that South West Water is continuing its strong performance against the 2010-2015 regulatory contract. Revenues were up 4.9% to £269.1m during the half due to tariff increases and new connections, slightly offset by the effects of customers switching to a metered tariff."I am also pleased to report that financial performance at Viridor in the first half of this year has been in line with management expectations," Harvey added.Viridor's revenues rose 5.3% to £398.2m in the first half as higher landfill and construction revenues offset a fall in recycling.However, despite the fall in earnings the company stressed that it is a "transitional year" for Viridor with full-year profits including joint ventures expected to be broadly similar to last year. "The company has continued to make strong progress on building its EfW business and securing base-load contracts. These projects are expected to drive Viridor's long-term profit growth," Harvey continued.The stock was up 0.78% at 643p in early trading on Thursday.BC