The Investment Column: South West's waste line
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.SOUTH WEST WATER has been greedily buying up landfill sites for waste management. In the last three months its Haul Waste division has taken on 12 million cubic metres of new ground, representing a 15 per cent increase on its overall capacity.
This might seem a dirty business but South West management believes "green" means gold. It argues that its in-depth expertise in waste management means it is best placed to deal with an increasingly sensitive environmental issue.
The company is about to change its name to the Pennon group. Critics see this as an attempt to escape from a past associated with high water charges and dirty south coast beaches.
But the company believes Pennon represents a move away from the boring utility image as it reaches into sectors away from the grabbing hands of the regulator.
Waste management is one of three new "non-regulated" areas where the group is keen to expand. The others are specialist environmental instrumentation and specialist contracting.
Some early excursions have not been a great success. The sale of its 50 per cent holding in Societa Italo Britannica dell'Acqua cost South West pounds 7.5. That, coupled with a provision for the restructuring of its water and sewerage business dented pre-tax profits unveiled yesterday.
Before exceptionals, profits rose 3 per cent to pounds 121.6m while turnover was up 11 per cent to pounds 382.1m.
For the shares, up 4p to 960p, the big issue remains how the company will be hit by the Ofwat periodic review of water charges which impacts in April 2000. Analysts expect profits of pounds 128m next year implying a forward multiple of 11 times. That is slightly above the sector average. Hold.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments