The owner of waste company Viridor said it continues to see an effect from David Attenborough’s Blue Planet, which has sparked action on recycling.
Pennon, which also runs South West Water, said that the programme has encouraged cross-party support for a new waste strategy, which is expected to be put into law after the general election.
“Whilst the recycling market has been challenging … we are confident in the long-term market outlook,” the company said in a statement to the market.
Management said that in the last six months, the group has managed to meet its expectations, as underlying profit before tax grew 0.8% to £143.7 million.
This was in part due to growth in operating profit before depreciation and amortisation at Viridor.
That unit runs 10 energy recovery facilities (ERFs), which extract energy from waste.
From an environmental perspective, recovery is the second least preferable option after putting the waste in landfill.
But Viridor has spotted a rift between the supply of and demand for ERFs and plastics recycling, giving it somewhere to invest.
It is already planning to build out its ERFs and has started work on a £65 million plastics recycling plant in Avonmouth.
“Our recycling division is on a growth trajectory with a new plastics processing facility on track to add much-needed capacity in the UK market,” said Pennon boss Chris Loughlin.
Revenue contracted 4.6% to £712.4 million, while operating profit rose 0.6% to £179.5 million.
The water sector is preparing for Ofwat’s next regulation period, with several suppliers facing additional demands from the regulator.
South West Water said it was confident of exceeding its targets for the 2020 to 2025 period. It plans to reduce leaks by 15% in five years and hopes to be emissions neutral by 2030.
“We have made an early start on our business plan for 2020-2025 after receiving fast-track status from the regulator for the second consecutive review, the only water company ever to achieve this,” Mr Loughlin said.
August Graham is PA City Reporter.
