The parent firm of South West Water and Bristol Water has seen half-year profits slump by three quarters after it was hit by a doubling of power costs amid the energy crisis.
Exeter-based Pennon Group said pre-tax profits fell by 75.1% to £22.5m in the six months to September 30, despite revenues rising by 9.3% to £425.5m.
The FTSE utilities firm, which provides water to around 3.5 million people across the South West, said its power costs had jumped to around £49m from £24m a year ago, and shot up by around £23m on a like-for-like basis.
The company recently said it expects full-year power costs to rise to around £106m, up from £56m the previous year.
Bosses said the group’s strong balance sheet was helping to offset the surge in power bills, while it was offsetting wider cost pressures through savings across the business.
Pennon also said it was helping financially struggling customers, with more than 100,000 in its region being supported by affordability initiatives and around £78m earmarked for these programmes.
The firm also announced on Wednesday (November 30) it would be doubling its apprenticeship and graduate schemes to 1,000 by 2030, while also offering 5,000 work placements to schoolchildren over the same period. The initiative comes as firms launch innovative drives to boost recruitment in a difficult jobs market across the UK.
Pennon chief executive Susan Davy said: “We are delivering over £78m of benefits to customers at a time when customers need it most", and the apprenticeship and graduate scheme was designed to support “those in our region to live local and prosper”.
Ms Davy also hailed record investment to help bolster Pennon’s environmental performance and build water supply resilience for the future, “having experienced the hottest, driest year since records began”.
"We are announcing a further increase in investment in water resilience schemes of around £45m to repurpose ex-quarries and mines and introduce de-salination units to ensure our resilience to 2050 is in place now. Together with the investment announced earlier this month, this brings the total reinvestment in these initiatives to around £75m.”
Earlier this year, South West Water came under the glare of regulator Ofwat over its environmental performance and sewage treatment works. The watchdog opened an additional enforcement case at South West Water in June amid an industry-wide probe, as it said concerns were growing over the supplier’s operation of sewage works and environmental performance.
Pennon said on Wednesday it continues to “work openly, constructively and transparently with Ofwat as part of this ongoing process”. The Competitions and Markets Authority approved Pennon’s £425m takeover of Bristol Water in March.
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- Devon-based pharmaceutical firm Accord planning new UK factory
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