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Water utility Pennon expects annual revenue to fall as demand softens

Published 30/11/2022, 07:36
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By Pushkala Aripaka

(Reuters) -British water company Pennon expects full-year revenue to fall on lower demand, it said on Wednesday, sending shares down nearly 7%, while unveiling plans to add more apprentices and recruits by 2030.

Soaring prices of everything from energy to food, boosted by supply chain pressures and the Ukraine war, are squeezing household incomes and forcing consumers to cut back on spending, while eating into corporate profits.

Pennon expects to be hit by slowing water demand in winter months when rising power demand boosts costs for consumers, and its water efficiency programmes take effect.

"Overall, our underlying results for the group for the full year are expected to be weighted to the first half of the financial year," the company said in a statement.

In May, it expected annual revenue to grow over the 792.3 million pounds ($945 million) it reported last year.

The company, founded in 1989, said it plans to double its apprenticeship and graduate schemes to 1,000 spots and offer another 5,000 work placements to school students by 2030.

The move comes as Britain's tight labour market drives employers to evolve new hiring strategies.

Last week, bike and motor parts retailer Halfords said it aimed to recruit 1,000 new technicians over the next 12 months by attracting retirees to work in its car repair centres.

Pennon's plans would be "supporting those in our region to live local and prosper," Chief Executive Susan Davy said in a statement.

Pennon did not immediately respond to requests for further details on the jobs plan, such as the nature of work expected from apprentices and other recruits.

On the results front, underlying pretax profit fell 75.1% to 22.5 million pounds for the first half, but revenue rose 9.3% on higher demand from businesses over households.

It also aims to cut costs by reducing exposure to index-linked debt to trim volatility on interest expenses.

Pennon, which also treats waste water, said it also invested an additional 45 million pounds to repurpose former quarries and mines and introduce de-salination units as it seeks to cut its environmental impact and sustain business.

($1=0.8341 pounds)

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