Pennon group updates its dividend policy

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Pennon Group, the water utility and waste management company, announced full-year results.

"Revenue up marginally, from £632.6 million to £636.7 million. EBITDA is marginally lower at £365.3 million from £367.3 million, reflecting the mix of margin on retail and wholesale revenues, with South West Water's wholesale margin reducing as a result of lower customer consumption. "

"Profit before tax reduces by £8.7 million from £191.7 million to £183.0 million."

Pennon took a provision of £9 million for businesses and households failing to pay their bills during the Covid-19 crisis.

The group lifted its dividend 6.6% to 43.77p and said it will grow the payout at 2% above inflation over the next five year instead of 4% (company’s policy).

From a chartist’s point of view, the medium term outlook is bullish as long as prices are holding above the key support at 922p (March 16 bottom, overlap). However, the stock price faces a significant hurdle near 1210p (upper end of the short term consolidation range). The configuration is mixed. 

As long as 1210 is resistance, a price pullback can be expected towards 1088p. A break above 1210p would call for a new up leg towards 1280p.

Source: GAIN Capital, TradingView

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