Pennon splashes the cash with Bristol Water buy and special dividend

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Pennon Group PLC (LON:PNN) has snapped water utility Bristol Water for £814mln including debt alongside a £1.9bn package of handouts to shareholders.

The South West Water group said shareholders will get a £1.5bn special dividend (worth 355p after a share consolidation) while it will buy back up to £400mln of its shares.

Going forward, Pennon said it will also increase ordinary dividend payments by 9% or 2p per share from 2021/2022 onwards.

Susan Davy, chief executive, added: “Bristol Water brings great people and a great business to Pennon and I am hugely excited about building a future together.

“We see attractive opportunities to continue to invest in the Bristol Water business to deliver enhanced resilience and water security to benefit customers in Bristol and beyond.”

Pennon raised £3.7bn when it sold its Viridor waste business in July, with a gain on that sale of £1.7bn.  

Reflecting that profits in the year to end-March 2021 jumped to £1.76bn (£206mln).

Revenues rose 1.2% to £645mln while underlying profits fell 14% to £157mln.

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