FTSE 250-listed Pennon, which owns South West Water, yesterday said it would keep water bill increases in line with inflation next year, as it unveiled half-year results broadly in line with expectations.
The utility and waste management firm has increased its dividend by 7.2 per cent, in-keeping with company policy to grow shareholder payouts by four per cent above inflation.
Pennon group’s pre-tax profit grew by 3.5 per cent to £110.9m over the first half of the year, while South West Water’s pre-tax profit increased by 7.6 per cent to £87.3m.
“South West Water is continuing its strong performance against the 2010 to 2015 regulatory contract and is well placed to outperform its assumptions,” said chairman Ken Harvey.
Pennon plans to increase bills by less than inflation over the 2015 to 2020 period in its business plan, which will be submitted on 2 December.
Political pressure has been growing on utility companies to keep customers’ bills down and peer United Utilities said on Wednesday that it plans to keep prices in line with inflation next year.
But Thames Water had a proposed eight per cent price hike rejected by regulator Ofwat earlier this month.
Pennon’s waste management firm Viridor posted a 14.3 per cent decline in profit before interest and taxes (PBIT), but the company reiterated its full year guidance of flat PBIT.
Shares closed up 0.9 per cent in London at 644p.