South West Water’s parent firm has seen a £15million fall in half-year profit but bosses stressed the business has remained “resilient” in the face of the coronavirus pandemic.

Pennon’s results for the six months to the end of September 2020, a period characterised by the Covid-19 crisis and its economic aftershocks, show an underlying pre-tax profit of £86.7million.

But this was down 14.5% from the £101.4million profit for the same period in pre-Covid 2019. Revenue was also down slightly, a 1.9% drop from £325.8million to £319.7million.

But the Exeter-headquartered FTSE-100 company made a £1.7billion profit from the sale of its waste management operation Viridor - having taken £3.7billion in net cash proceeds, from the £4.2billion disposal - and is paying off debt, with £750million already paid back and £36million injected into the company’s main pension scheme.

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This leaves Pennon with £2.7billion for investment, the accounts revealed. Already there has been speculation that the company will make a bid to buy Southern Water.

Pennon said it has rapidly adapted to the operational and financial challenges presented by Covid-19 and is well placed to weather the crisis.

It stressed that in order to meet commitments, it is advancing expenditure including delivering two bathing water quality improvements and earlier than planned upgrades in its network to reduce leakage.

The company is now focusing on its “New Deal” for the K7 2020-2025 five year plan, which has begun with its Watershare+ scheme to return £20million in savings to customers via either shares or bill discounts.

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READ PENNON'S FULL HALF-YEAR RESULTS HERE

Susan Davy, Pennon chief executive

Susan Davy, Pennon chief executive, said: "I am delighted to be leading the business at this important time in Pennon's history. The completion of the Viridor sale in July this year has seen significant shareholder value realised, allowing us to refocus our business on excellence in the water and wastewater sector. It is an incredibly exciting time for the group as we forge ahead with our 'New Deal' plans for the K7 2020-25 period.

“We will deliver our New Deal by being even closer to the people we serve, understanding people's needs, demonstrating the positive impacts we're making, and above all else, doing the right thing. We are promoting social mobility, addressing racial and gender inequality, and providing secure jobs across our regions.

“This starts with our new WaterShare+ scheme, in which one in 16 of our household customers are now shareholders in the business helping us to create a new kind of water company, closer to the customers and communities we serve. Environmental considerations continue to be at the heart of our decision making, and we are focused on delivering on our commitments.

“Pennon has delivered resilient operational and financial performance through the first half of 2020/21, making good progress in the new K7 regulatory period and against the backdrop of COVID-19. I'd like to recognise the exceptional commitment and resilience of all our people during this time.

“Since taking on the role of CEO I have spent time out and about on our sites and have been humbled by their dedication and professionalism that has allowed us to continue to deliver for customers, communities and the environment."