Half Year Results 2012/13 29 November 2012
Pennon Group Plc (“Pennon Group”) Disclaimers For the purposes of the following disclaimers, references to this "document" shall mean this presentation pack and shall be deemed to include references to the related speeches made by or to be made by the presenters, any questions and answers in relation thereto and any other related oral or written communications. This document contains certain "forward-looking statements" with respect to Pennon Group's financial condition, results of operations and business and certain of Pennon Group's plans and objectives with respect to these matters. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as "anticipates", "aims", “believes", “continue”, "could", "due", "estimates“, "expects", "goal", “intends", "may", “plans", “project”, “seeks”, "should", "targets ", “will” and related and similar expressions, as well as statements in the future tense. 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. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These 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. All written or verbal forward-looking statements, made in this document or made subsequently, which are attributable to Pennon Group or any other member of the Pennon Group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. Pennon Group may or may not update these forward-looking statements. This document is not an offer to sell, exchange or transfer any securities of Pennon Group or any of its subsidiaries and is not soliciting an offer to purchase, exchange or transfer such securities in any jurisdiction. Without prejudice to the above, whilst Pennon Group accepts liability to the extent required by the Listing Rules, the Disclosure Rules and the Transparency Rules of the UK Listing Authority for any information contained within this document which the Company makes publicly available as required by such Rules: (a) neither Pennon Group nor any other member of Pennon Group or persons acting on their behalf shall otherwise have any liability whatsoever for loss howsoever arising, directly or indirectly, from use of the information contained within this document; and (b) neither Pennon Group nor any other member of Pennon Group or persons acting on their behalf makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained within this document Without prejudice to the above, no reliance may be placed upon the information contained within this document to the extent that such information is subsequently updated by or on behalf of Pennon Group. Past performance of securities of Pennon Group cannot be relied upon as a guide to the future performance of any securities of Pennon Group. 2
Pennon Group Plc H1 2012/13 Financial Highlights • Profit before tax up 3.4% to £111.1m South West Water up 10.0% to £83.8m Viridor down 26.5% to £22.5m • Earnings per share before deferred tax up 3.4% to 24.3p (1) • Dividend Interim dividend per share up 6.6% to 8.76p • Capital investment up 88% to £188m (2) includes 4 EfWs under construction • Substantial cash resources and committed funding £85m new/refinanced facilities since 31 March 2012 £995m cash/committed facilities at 30 September 2012 (3) (1) Basic earnings per share were 26.2p (2) Including construction spend on service concession arrangements (3) Including £126m deposits with Letter of Credit providers and lessors 3
Pennon Group Plc H1 2012/13 Operational and Business Highlights South West Water • Strong performance against 2010 – 2015 regulatory contract • PBT up, in spite of atypical weather • Average funding cost 4.0% • Strong operational performance • Preparing for PR14 • Unable to accept Ofwat Section13 licence proposals but responded constructively on how concerns can be addressed 4
Pennon Group Plc H1 2012/13 Operational and Business Highlights Viridor • Continuing growth in profits from joint ventures outweighed by reduction in recycling primarily price as flagged previously • Significant progress in developing pipeline of long-term projects including − financial close reached for the Glasgow DBFO (1) − financial close reached (2) for the South London Waste Partnership PPP − preferred bidder for the Peterborough PPP − Dunbar planning relaxed (2) ; proposed EfW can now serve all of Scotland (1) DBFO – Design Build Finance Operate (2) Post half year 5
6
Pennon Group Plc Summary Financial Results For the half year ended 30 September Full Year 2012 2011 Change 2011/12 £m £m £m Group revenue 633.7 642.6 (1.4%) 1,233.1 Group operating profit 136.3 143.1 (4.8%) 268.8 - SWW 115.0 107.9 6.6% 204.7 - Viridor 21.0 35.2 (40.3%) 63.7 Viridor PBIT plus joint ventures 27.8 40.0 (30.5%) 75.2 Group profit before tax 111.1 107.4 3.4% 200.5 - SWW 83.8 76.2 10.0% 141.5 - Viridor 22.5 30.6 (26.5%) 57.6 - Plc/Other 4.8 0.6 - 1.4 Capex (1) 188.2 99.9 88.4% 273.4 Earnings per share (2) 24.3p 23.5p 3.4% 47.3p Dividend per share 8.76p 8.22p 6.6% 26.52p (1) Including construction spend on service concession arrangements 7 (2) Before deferred tax
Pennon Group Plc For the half year ended Cash Flow 30 September Full Year 2012 2011 2011/12 £m £m £m Cash inflow from operations 190.6 185.1 389.9 Net interest paid (31.3) (32.5) (61.3) Dividends paid (18.4) (21.6) (69.1) Tax paid (15.2) (23.2) (41.4) Capital expenditure (1) (184.8) (93.3) (273.6) Acquisitions and investment in joint ventures (6.5) (5.7) (42.6) Loan repayments and dividends received from joint 4.1 3.6 3.6 ventures Pension contributions (7.5) (8.6) (49.2) Net cash (outflow)/inflow (69.0) 3.8 (143.7) Shares issued 3.0 1.6 1.6 Debt acquired with acquisitions (1.1) - (0.1) Non-cash movements (1.3) (1.5) (28.6) (Increase)/decrease in net borrowings (68.4) 3.9 (170.8) Significantly increased capital expenditure to support future growth 8 (1) Including construction spend on service concession arrangements
Pennon Group Plc Net Borrowings As at 30 September As at 31 March 2012 2011 2012 £m £m £m Loans and finance leases 2,632 2,440 2,530 Less: cash and cash deposits (459) (510) (425) Net borrowings 2,173 1,930 2,105 Net gearing (1) 72% 72% 72% SWW debt/RCV 59% 58% 56% • Gearing stable • Net borrowings include £252m for EfW plants (Runcorn II, Exeter, Oxfordshire and Cardiff) 9 (1) Net borrowings / (equity + net borrowings)
Pennon Group Plc Viridor EfW Capex – Impact on Net Debt Cumulative Remaining spend to spend Total 30 September to project Project 2012 completion spend EfW projects under construction £m £m £m Runcorn II 129 87 216 Exeter 23 22 45 Oxford 47 159 206 Cardiff 53 170 223 252 438 690 • Net debt includes £252m for Runcorn II/Exeter/Oxfordshire/Cardiff – a sizeable proportion of £690m total spend on these projects • 2012/13 and 2013/14 are expected to be ‘peak years’ for Viridor EfW capex and increase in Group net debt • Cash generation from above EfWs to start in 2014/15 10
Pennon Group Plc Net Interest Analysis (1) For the half year ended Full Year 30 September 2012 2011 2011/12 £m £m £m Interest payable (44.4) (48.2) (94.3) Capitalised interest payable (4.5) (1.3) (3.0) Interest receivable on shareholder loans to joint ventures 4.6 3.3 7.5 Other finance income 9.9 6.2 11.9 Net interest payable (34.4) (40.0) (77.9) Average rate of interest 3.2% 4.1% 3.9% Net interest cover 4.6x 3.7x 3.6x • Effective management of interest rates Group 3.2% SWW 4.0% (1) Excludes pensions net interest, IFRIC12 “contract interest receivable” and discount unwind on provisions 11
Water Industry 2011/12 Average Interest Rate on Net Debt • SWW interest rate consistently low Source: Pennon calculation based on company Annual Reports Basis: Net interest payable (excluding pensions net interest) / average net debt 12
Recommend
More recommend
