Revenue for the year ending 31 March 2011 was up 8.4% on the previous year to £1,159.2m. Pre-tax profit was up 1.5% to £188.5m.
At South West Water, revenues rose 1.0% (£4.6m) to £448.8m as a result of tariff increases, new connections and higher demand offset by the effects of customers switching to a metered tariff and lower other sales. Approved tariff increases, including the 1.1% K factor, amounted to £7.0m. Customers switching to metered charging reduced turnover by £6.9m, but 5,500 new customer connections contributed £2.1m of additional turnover. Customer demand was 1.3% higher than last year because of dry weather in the early part of the year. 71% of South West Water's domestic customers are now metered.
At Viridor, revenue was up 13.6% to £712.0m, of which the acquisitions accounted for £40.6m. Existing business increased by £44.9m (including an increase in landfill tax collected of £14.0m).
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Viridor's strategy is to expand in recycling and waste-to-energy schemes while exploiting its existing landfill void. Some 46% of profits are now from recovering value in waste, either by recycling or energy generation.
Viridor says that, after recent acquisitions, it is now the largest operator of materials recycling facilities (MRFs) in the UK. In June 2010 it acquired a number of companies known as 'Reconomy Recycling Solutions' (Reconomy), a leading regional materials recycling business, for £23.8m. In November, it acquired Pearsons Group, a leading materials recycling company in East Anglia, for £16.0m. Two small recycling businesses based in Bury - Adapt Recycling and Swinnerton Environmental - were acquired in December 2010 and January 2011 for £0.7m and £1.8m respectively. Martock Waste Paper, based in Somerset, was acquired in February for £7.4m.
Pennon chairman Ken Harvey said: "I am pleased to say that it has been another successful year for the group. During the year South West Water continued to improve its operational performance and Viridor has once again delivered strong profit growth. Looking forward, South West Water is well placed to outperform the assumptions for the current regulatory period. Viridor's long-term profit momentum is underpinned by its recycling business, its major energy from waste planning successes, and its strong PPP pipeline."
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