Pennon to return to profitability despite pressure from summer heatwave

South West Water owner Pennon has reported a “strong return to profitability” despite higher costs in the face of hot summer weather.

The FTSE 250 water firm said it maintained “resilient” supplies of water despite high levels of demand due to the weather conditions.

The Met Office confirmed last month that the UK witnessed its hottest summer on record this year.

It came as the company said it expects earnings to increase by 60% year-on-year, taking into account revenues deferred into the next financial year.

Bosses stressed that trading between April 1 and September 25 means the company is on track to meet expectations for the current financial year.

The company said it is also making “good progress” with its £3.2 billion investment plan, which it agreed with regulator Ofwat last year.

Departing boss Susan Davy also told shareholders on Friday that it has “more to do” regarding reducing pollution but reported that pollution incidents have halved over the past eight months.

The company added that storm overflow spills reduced by nearly 50% year-on-year.

It comes after South West Water agreed to pay £24 million in July after Ofwat found it spilled wastewater in the environment when it should not have done.

Ms Davy, group chief executive, said: “We’re driving real improvements for our customers and communities whilst delivering a return to strong profitability.

“Despite the pressures of a hot summer, we’ve maintained resilient water supplies and continued to improve services for our customers.

“Whilst there is more to do, our pollution reduction plans are delivering tangible benefits, halving the number of pollutions and spills from storm overflows, reducing our impact on the environment.”

Pennon also said it is “progressing” with its search process to find a successor after Ms Davy announced her retirement plans in the summer.