Utilities company Pennon throws water on ideas of nationalisation saying leakage levels have halved since privatisation

 
Lucy White
CHILE-WATER-EMERGENCY
Pennon said it had invested significantly in its networks (Source: Getty)

Utilities company Pennon, which provides water to 2.3m people in the UK, has today aimed to douse any talk of renationalising water networks as it released half-year results.

The business said it was “continuing to invest significantly” in its plants and distribution network, and had improved water quality and halved leakage levels since privatisation.

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Pennon's revenue was up 5.6 per cent year-on-year to £723.9m, while operating profit had risen 5.5 per cent to £162.4m. This was attributed by customer demand for water, the completed integration of Bournemouth Water, and growth in the Viridor waste management business.

“In water, our focus on cost savings means bills are lower now than they were eight years ago,” said Pennon chief executive Chris Loughlin.

The emphasis by the company on proving its worth comes as water companies are getting increasingly concerned about the popularity of renationalisation.

“With the Labour Party gaining momentum, the threat of nationalisation is no longer academic,” wrote Investec analyst Roshan Patel in a note earlier this month, adding that “the private sector has enabled an unprecedented acceleration of investment”.

Read more: Utilities industry defends privatisation as Labour promises water nationalisation

Pennon's dividend was also up 7.9 per cent to 11.97p today, as it announced positive developments for Viridor.

It said a “satisfactory financial outcome” had been achieved with the Greater Manchester Waste Disposal Authority, and their relationship would continue.

The authority had said it would end its private finance initiative with Viridor, after an attempt to secure savings through the partnership proved unsuccessful.

Read more: Pennon on track to hit financial targets as it delivers 'robust' performance

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