LSE:PNN

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Established dividend payer and fair value.


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


Market Performance


7 Day Return

1.3%

LSE:PNN

0.5%

GB Water Utilities

1.6%

GB Market


1 Year Return

4.8%

LSE:PNN

10.2%

GB Water Utilities

0.3%

GB Market

PNN underperformed the Water Utilities industry which returned 10.1% over the past year.

PNN outperformed the Market in United Kingdom of Great Britain and Northern Ireland which returned 0.3% over the past year.


Share holder returns

PNNIndustryMarket
7 Day1.3%0.5%1.6%
30 Day5.8%2.1%5.7%
90 Day-0.4%-1.1%1.3%
1 Year10.8%4.8%15.8%10.2%5.1%0.3%
3 Year0.3%-13.7%-1.2%-14.0%23.7%9.0%
5 Year20.7%-3.6%22.5%-1.8%29.9%2.5%

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 based on future cash flows and its price relative to the stock market?

24%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Pennon Group's share price is below the future cash flow value, and at a moderate discount (> 20%).

Pennon Group's share price is below the future cash flow value, but not at a substantial discount (< 40%).


Price Based on Earnings

Pennon Group is good value based on earnings compared to the Europe Water Utilities industry average.

Pennon Group is good value based on earnings compared to the United Kingdom of Great Britain and Northern Ireland market.


Price Based on Expected Growth

Pennon Group is poor value based on expected growth next year.


Price Based on Value of Assets

Pennon Group is overvalued based on assets compared to the Europe Water Utilities industry average.


Next Steps

Future Growth

How is Pennon Group expected to perform in the next 1 to 3 years based on estimates from 11 analysts?

2.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Pennon Group's revenue is expected to grow by 0.9% yearly, however this is not considered high growth (20% yearly).

Pennon Group's earnings are expected to grow by 2.6% yearly, however this is not considered high growth (20% yearly).

Pennon Group's revenue growth is positive but not above the United Kingdom of Great Britain and Northern Ireland market average.

Pennon Group's earnings growth is positive but not above the United Kingdom of Great Britain and Northern Ireland market average.

Pennon Group's earnings growth is expected to exceed the low risk savings rate of 1.2%.


Earnings per Share Growth Estimates


Future Return on Equity

Pennon Group is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has Pennon Group performed over the past 5 years?

14.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Pennon Group's year on year earnings growth rate has been positive over the past 5 years.

Pennon Group's 1-year earnings growth is less than its 5-year average (6.8% vs 14.4%)

Pennon Group's earnings growth has not exceeded the Europe Water Utilities industry average in the past year (6.8% vs 6.8%).


Return on Equity

Pennon Group has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Pennon Group used its assets less efficiently than the Europe Water Utilities industry average last year based on Return on Assets.


Return on Capital Employed

Pennon Group has improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Pennon Group's financial position?


Financial Position Analysis

Pennon Group is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Pennon Group's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

Pennon Group's level of debt (125.6%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (130.3% vs 125.6% today).

Debt is not well covered by operating cash flow (13.6%, less than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 5x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is not covered by short term assets, assets are 0.5x debt.


Next Steps

Dividend

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

6.11%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Pennon Group's pays a higher dividend yield than the bottom 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (1.99%).

Pennon Group's dividend is below the markets top 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (5.48%).

Dividends per share have been stable in the past 10 years.

Dividends per share have increased over the past 10 years.


Current Payout to Shareholders

Dividends paid are covered by earnings (1.2x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be covered by earnings (1.2x coverage).


Next Steps

Management

What is the CEO of Pennon Group's salary, the management and board of directors tenure and is there insider trading?

3.4yrs

Average management tenure


CEO

Chris Loughlin (66yo)

3.7yrs

Tenure

UK£1,408,000

Compensation

Mr. Christopher Loughlin, also known as Chris, BSc Hons, MICE, CEng, MBA, has been Group Chief Executive Officer of Pennon Group Plc since January 1, 2016. Mr. Loughlin served as the Chief Executive Office ...


CEO Compensation Analysis

Chris's remuneration is about average for companies of similar size in United Kingdom of Great Britain and Northern Ireland.

Chris's compensation has increased by more than 20% in the past year whilst earnings grew less than 20%.


Management Age and Tenure

3.4yrs

Average Tenure

The tenure for the Pennon Group management team is about average.


Board Age and Tenure

4.2yrs

Average Tenure

65yo

Average Age

The tenure for the Pennon Group board of directors is about average.


Insider Trading

More shares have been bought than sold by Pennon Group individual insiders in the past 3 months, but not in substantial volumes.


Recent Insider Transactions

BuyUK£17,68013 Aug 19
Gill Rider
EntityIndividual
Role
Lead Director
Senior Independent Director
Shares2,500
Max PriceUK£7.07
BuyUK£12221 Sep 18
Susan Davy
EntityIndividual
Role
Member of the Board of Directors
CFO & Executive Director
Shares17
Max PriceUK£7.15
BuyUK£15721 Sep 18
Christopher Loughlin
EntityIndividual
Role
Chief Executive Officer
CEO & Executive Director
Shares22
Max PriceUK£7.15

Ownership Breakdown


Management Team

  • Chris Loughlin (66yo)

    CEO & Executive Director

    • Tenure: 3.7yrs
    • Compensation: UK£1.41m
  • Susan Davy (49yo)

    CFO & Executive Director

    • Tenure: 4.6yrs
    • Compensation: UK£1.08m
  • Sarah Heald

    Director of Corporate Affairs & Investor Relations

    • Tenure: 0yrs
  • Phil Piddington

    Managing Director of Viridor

    • Tenure: 0yrs
  • Adele Barker

    Group Director of Human Resources

    • Tenure: 0yrs
  • Simon A. Pugsley

    General Counsel & Company Secretary

    • Tenure: 0.6yrs

Board Members

  • John Parker (77yo)

    Chairman

    • Tenure: 4.1yrs
    • Compensation: UK£270.00k
  • Gill Rider (64yo)

    Senior Independent Director

    • Tenure: 4.2yrs
    • Compensation: UK£77.00k
  • Chris Loughlin (66yo)

    CEO & Executive Director

    • Tenure: 3.7yrs
    • Compensation: UK£1.41m
  • Martin Hagen (67yo)

    Non-Executive Director of South West Water

    • Tenure: 3.4yrs
  • Neil Cooper (52yo)

    Independent Non-Executive Director

    • Tenure: 5yrs
    • Compensation: UK£69.00k
  • Susan Davy (49yo)

    CFO & Executive Director

    • Tenure: 4.6yrs
    • Compensation: UK£1.08m
  • Claire Aimie Ighodaro

    Independent Non-Executive Director

    • Tenure: 0yrs
  • Matthew Taylor

    Non-Executive Director of South West Water

    • Tenure: 0yrs
  • Iain Evans

    Independent Non-Executive Director

    • Tenure: 1yrs
    • Compensation: UK£40.00k

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£3.174b
  • Shares outstanding: 420.08m
  • 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 Analysis2019/09/14 20:48
End of Day Share Price2019/09/13 00:00
Earnings2019/03/31
Annual Earnings2019/03/31


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.