Shares in Pennon Group (LSE: PNN) slipped over 1.5% on Monday after the utility company revealed “challenging” weather conditions have weighed on its wastewater operational performance for the year ending March 31.
The FTSE 250 firm stated that annual rainfall in the South West surged 50% in the second half, leading to “significantly increased wastewater flows” that hurt metrics like pollution incidents and storm overflow usage.
Despite the adverse climate impact, Pennon affirmed it continues to trade in line with consensus forecasts. The water supplier highlighted progress on its £1 billion WaterFit scheme, with 78 interventions underway to improve water quality at 49 of 151 beaches by 2025. Furthermore, Pennon has completed 90% of projects to bolster its strategic reservoir storage across Devon and 70% in Cornwall.
Looking ahead, Pennon awaits phase 1 clearance this summer from the Competition and Markets Authority regarding its £380 million acquisition of Sutton & East Surrey Water in January. The deal is expected to boost the group’s financial year results.
Pennon shares have fallen 10% year-to-date and 21% over the past 12 months.
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