LSE:PNN

Stock Analysis Report

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Executive Summary

Pennon Group Plc engages in the environmental infrastructure businesses in the United Kingdom, rest of European Union, China, and internationally. More Details


Snowflake Analysis

Average dividend payer with imperfect balance sheet.


Similar Companies

Share Price & News

How has Pennon Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PNN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.4%

PNN

0.1%

GB Water Utilities

-0.4%

GB Market


1 Year Return

30.6%

PNN

15.5%

GB Water Utilities

-14.3%

GB Market

Return vs Industry: PNN exceeded the UK Water Utilities industry which returned 15.5% over the past year.

Return vs Market: PNN exceeded the UK Market which returned -14.3% over the past year.


Shareholder returns

PNNIndustryMarket
7 Day-2.4%0.1%-0.4%
30 Day1.1%2.2%0.06%
90 Day-9.7%-6.8%-2.5%
1 Year36.0%30.6%20.7%15.5%-10.8%-14.3%
3 Year47.7%27.7%28.7%11.8%-5.2%-16.7%
5 Year68.2%34.0%40.0%12.0%24.5%-3.6%

Price Volatility Vs. Market

How volatile is Pennon Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Pennon Group undervalued compared to its fair value and its price relative to the market?

36.76x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: PNN (£10.2) is trading above our estimate of fair value (£6)

Significantly Below Fair Value: PNN is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: PNN is poor value based on its PE Ratio (36.8x) compared to the XE Water Utilities industry average (33x).

PE vs Market: PNN is poor value based on its PE Ratio (36.8x) compared to the UK market (17.7x).


Price to Earnings Growth Ratio

PEG Ratio: PNN is poor value based on its PEG Ratio (7.1x)


Price to Book Ratio

PB vs Industry: PNN is overvalued based on its PB Ratio (2.5x) compared to the XE Water Utilities industry average (1.9x).


Next Steps

Future Growth

How is Pennon Group forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

5.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PNN's forecast earnings growth (5.2% per year) is above the savings rate (1.2%).

Earnings vs Market: PNN's earnings (5.2% per year) are forecast to grow slower than the UK market (23.7% per year).

High Growth Earnings: PNN's earnings are forecast to grow, but not significantly.

Revenue vs Market: PNN's revenue (0.6% per year) is forecast to grow slower than the UK market (6.3% per year).

High Growth Revenue: PNN's revenue (0.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PNN's Return on Equity is forecast to be low in 3 years time (6.6%).


Next Steps

Past Performance

How has Pennon Group performed over the past 5 years?

9.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PNN has high quality earnings.

Growing Profit Margin: PNN's current net profit margins (18.5%) are lower than last year (25.4%).


Past Earnings Growth Analysis

Earnings Trend: PNN's earnings have grown by 9.2% per year over the past 5 years.

Accelerating Growth: PNN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PNN had negative earnings growth (-27.6%) over the past year, making it difficult to compare to the Water Utilities industry average (-30.9%).


Return on Equity

High ROE: PNN's Return on Equity (7.2%) is considered low.


Next Steps

Financial Health

How is Pennon Group's financial position?


Financial Position Analysis

Short Term Liabilities: PNN's short term assets (£3.5B) exceed its short term liabilities (£940.7M).

Long Term Liabilities: PNN's short term assets (£3.5B) do not cover its long term liabilities (£4.1B).


Debt to Equity History and Analysis

Debt Level: PNN's debt to equity ratio (135%) is considered high.

Reducing Debt: PNN's debt to equity ratio has increased from 125.6% to 135% over the past 5 years.

Debt Coverage: PNN's debt is not well covered by operating cash flow (15.8%).

Interest Coverage: PNN's interest payments on its debt are well covered by EBIT (4.1x coverage).


Balance Sheet


Next Steps

Dividend

What is Pennon Group current dividend yield, its reliability and sustainability?

4.29%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: PNN's dividend (4.29%) is higher than the bottom 25% of dividend payers in the UK market (1.86%).

High Dividend: PNN's dividend (4.29%) is low compared to the top 25% of dividend payers in the UK market (5.16%).


Stability and Growth of Payments

Stable Dividend: PNN's dividends per share have been stable in the past 10 years.

Growing Dividend: PNN's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (157.7%), PNN's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PNN's dividends in 3 years are forecast to be covered by earnings (78.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.6yrs

Average management tenure


CEO

Pennon Group has no CEO, or we have no data on them.


Leadership Team

NamePositionTenureCompensationOwnership
Susan Davy
CFO & Executive Director5.58yrsUK£1.67m0.020%
£ 864.4k
Paul Boote
Group Finance Director & Director0.17yrno data0%
£ 0
Simon A. Pugsley
Group General Counsel & Company Secretary1.58yrsno datano data
Adele Barker
Group Chief People Officerno datano datano data

1.6yrs

Average Tenure

Experienced Management: PNN's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Susan Davy
CFO & Executive Director5.58yrsUK£1.67m0.020%
£ 864.4k
Paul Boote
Group Finance Director & Director0.17yrno data0%
£ 0
Gill Rider
Independent Chairman of the Board0.17yrUK£78.00k0.00059%
£ 25.3k
Neil Cooper
Senior Independent Director0.17yrUK£69.00kno data
Claire Aimie Ighodaro
Independent Non-Executive Director1yrUK£35.00kno data
Iain Evans
Independent Non-Executive Director2yrsUK£70.00kno data
John Butterworth
Independent Non-Executive Director0.17yrno datano data

0.2yrs

Average Tenure

53yo

Average Age

Experienced Board: PNN's board of directors are not considered experienced ( 0.2 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Pennon Group Plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Pennon Group Plc
  • Ticker: PNN
  • Exchange: LSE
  • Founded: 1989
  • Industry: Water Utilities
  • Sector: Utilities
  • Market Cap: UK£4.294b
  • Shares outstanding: 421.01m
  • Website: https://www.pennon-group.co.uk

Number of Employees


Location

  • Pennon Group Plc
  • Peninsula House
  • Rydon Lane
  • Exeter
  • Devon
  • EX2 7HR
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PEGR.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
PNNLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
3PNADB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
PNNLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
PEGR.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDFeb 2009

Biography

Pennon Group Plc engages in the environmental infrastructure businesses in the United Kingdom, rest of European Union, China, and internationally. The company’s Water segment comprises the regulated water ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/09/22 03:34
End of Day Share Price2020/09/21 00:00
Earnings2020/03/31
Annual Earnings2020/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.