Annual Report and Accounts 2016

Chief Financial Officer's report

Financial Review

Pennon Group delivered a strong financial performance, underpinned by a robust funding position, continuing to support our dividend policy of 4% growth above RPI inflation to 2020.

PERFORMANCE OVERVIEW

The principal measures used to assess the Group’s financial performance are:

Adjusted Ebitda(1)
before non-underlying items (£m)

2011/12
430.8
2012/13
433.0
2013/14
456.9
2014/15
465.9
2015/16
+9.1%
508.4
EARNINGS PER SHARE
before non-underlying items and deferred tax (pence)

2011/12
47.3
2012/13
40.3
2013/14
42.6
2014/15
39.8
2015/16
-0.8%
39.5
PROFIT BEFORE TAX
before non-underlying items (£m)

2011/12
200.5
2012/13
190.0
2013/14
207.3
2014/15
210.7
2015/16
+0.3%
211.3(2)
DIVIDEND PER SHARE
(pence)

2011/12
26.52
2012/13
28.46
2013/14
30.31
2014/15
31.80
2015/16
+5.6%
33.58
RECONCILIATION OF EARNINGS(3)
2015/16 profit
after tax
£m
2015/16 Basic
earnings per
share
p
2014/15 Profit
after tax
£m
2014/15 Basic
earnings per
share
p
Statutory earnings attributable to shareholders 152.1 37.0 126.3 32.3
Deferred tax before non-underlying items 39.2 9.5 18.2 4.7
Non-underlying items (post-tax) (29.1) (7.0) 11.0 2.8
Earnings before non-underlying items and deferred tax 162.2 39.5 155.5 39.8

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  1. Earnings before interest, tax, depreciation, amortisation and non-underlying items (EBITDA); adjusted EBITDA includes IFRIC 12 interest receivable and share of joint venture EBITDA
  2. Statutory basis £206.3m
  3. Earnings per ordinary share in this strategic report exclude non-underlying items and deferred tax. The Directors believe excluding non-underlying items and deferred tax provides a more useful comparison on business trends and performance. Deferred tax distorts earnings per share through the effects of changes in corporation tax rates and the level of long-term capital investment.
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