In my first annual statement to you as Chairman of Pennon Group, I am pleased to report another year of strong performance and solid financial results, which translate directly to shareholder value.
Following my appointment as Chairman in August 2015, I took time to familiarise myself with the Group’s operations and the strengths of the business, and concluded that a strong platform exists upon which we can further build to achieve a successful future. It was clear to me that Pennon was ready to move to the next phase; South West Water had embarked on a new five-year regulatory cycle whilst working towards the full integration of Bournemouth Water’s business acquired in April 2015, and Viridor was progressing from 'construction' to 'operation', with eight Energy Recovery Facilities (ERFs) operating successfully and the construction of three more progressing well. In addition, I found talented and committed people throughout the organisation, with a very strong executive leadership team in place. The autumn of 2015 was therefore a natural time for reflection in terms of the Group's strategic priorities.
Whilst this strategic review has not given rise to a ‘new’ Group strategy, it has led to differences of nuance and focus. In particular, we identified that with the maturity of Viridor’s business, as it moves away from waste disposal to landfill, greater commonality exists between the Group’s businesses. We also recognised that we were able to move towards a more homogeneous risk profile across the two businesses, with Pennon’s investment proposition now premised on an increased proportion of contracted long-term, index-linked revenues over a long-lived asset base.Read our Chairman's statement in full (PDF)