Pennon Share Discussion Threads

[apad] 20/11/2012 11:41

Interesting isn't it - there's still the run up to the review in the offing.
My view is that the potential in EfW is very significant as the UK is well behind europe's curve and there is continuing pressure on landfill.
No income to increase at present and a big utility can stay out of fashion for a long time.
Thanks MIATA.
apad

[ohisay] 20/11/2012 11:36

I doubled up this morning - that recyclate profits warning looks to have taken far too much out of the share price if that note above is correct.
"with just 15% of Viridor's profits now expected from recycling in 2012/13 there is limited downside in Pennon's earnings from this theme"

Thanks for the note Miata.

[miata] 16/11/2012 16:43

Liberum.

Putting recycling into perspective, Pennon Group announced a Viridor-inspired profit warning pre-H1 results and this warning centres on recyclates. Recycling accounted for 27% of Viridor's pre-central cost EBIT in 2011/12, at £33mn. This is just 12% of Pennon's EBIT. On our analysis EBIT from their recycling
division will fall from £33mn to c.£15mn in 2012/13E. We had an EBIT of £35mn for 2012/13 in our numbers pre Pennon's IMS and this reflects a fall of £20mn in EBIT, a 8% fall, from our previous estimates and is worth approximately 3p/share EPS. We believe that recyclate weakness has been weighing on Pennon's
share price for over a year. We see recyclate profitability at 4-year lows, and with just 15% of Viridor's profits now expected from recycling in 2012/13 there is limited downside in Pennon's earnings from this theme. This recycling profitability situation is unlikely to remain unchanged as competitors to Viridor restructure their loss making divisions (e.g. Shanks) or enter financial distress (e.g. Biffa).

Even if recyclates were to contribute zero EBIT going forward, then we still see an EBITDA for Viridor in 2015/16 of £200mn based on the current construction of 2mn tonnes of capacity Energy-from-Waste plants.
We see an equity valuation range of between £6.30/share (IRR 5%) and £9.30/share (IRR 25%) at March 2015 with a range in valuations from no premium to South West Water's RCV of £3.0bn and 7x EBITDA for the waste business, to 25% premium to RCV for water with an 8x EBITDA for the waste business. These IRRs
have nothing in for further EfW build of PPP wins.

[miata] 16/11/2012 15:00

Option expiry at 614p.

Last large trade:
16/11/12 14:22 599.798 16,500 O 598.5 599.5 Buy

[mj19] 16/11/2012 14:10

doesn't look like it

[miata] 16/11/2012 09:07

I would hope that it would attract buyers at 600p.

[global mega boom] 16/11/2012 08:43

altho its probably going to have a loola bounce i make 560 the next support now!

[miata] 15/11/2012 17:15

Late buys at better than dip prices

Price Quantity Type Bid Offer Buy/Sell
15/11/12 17:03 646.172 391,774 O 628.0 629.0 Buy
15/11/12 16:42 636.75 156,593 O 628.0 629.0 Buy
15/11/12 16:26 637.727 100,000 O 632.0 633.0 Buy

[thelongandtheshortandthetall] 15/11/2012 16:21

profit up
divi up

[randomwalker] 15/11/2012 16:11

More like a recycling revenue warning

"We expect to report Pennon Group profit before tax for the half year up over 3% to GBP111m and to announce an interim dividend up 6.6% to 8.76p per share."

seems to have panicked an already nervous market......but it has given me a chance to buy back exactlky £1 below my selling level. Realyy quite pleased with that, even if we go down to 600, the yield is pleasant and unlikely to fall

[lobby ludd] 15/11/2012 16:04

As I said earlier....its the little things are often the first warning of the bigger picture. Should have acted on my observation that the carteneros (rubbish collectors) of Buenos Aires were no longer bothering to collect plastic, and sold.............I didn't.

[global mega boom] 15/11/2012 15:57

puking over teh rail!!

[global mega boom] 15/11/2012 15:10

Now we know why its trading poorly :(

back to work

[global mega boom] 15/11/2012 15:09

Profit warning guys!

[lobby ludd] 15/11/2012 11:04

Was in Buenos Aires last week, and noticed the 'carteneros' - people who sort through domestic refuse left out on the pavement - no longer bothered with plastic bottles (which they always used to do). And these are people who will pick up an egg carton if there's value in it (I saw one man do just that).
......sometimes the little things give you an insight into the bigger picture.

ps. Then the report in The Telegraph this week that that the Chinese are no longer taking low grade plastic recyclate.

[miata] 12/11/2012 08:33

38p per week - bargain.

Barnet's annual bin charges are £32.50 for the first (small) bin and £53.50 for each additional bin. Large (940L) bins are £397 for the first and £575.50 for each additional bin.

[spacecake] 12/11/2012 08:20

My council which provided free garden waste collection for composting and resale has now started charging £20 per year for the service.... needless to say 80% of residents handed back the bins !!

[miata] 11/11/2012 08:31

Now 110th by market capitalization.

TT. TUI Travel 2,802.85
AGS Aegis Group 2,729.79
TPK Travis Perkins 2,675.58
LSE LSE Group 2,616.20
EZJ easyJet 2,538.74
ASHM Ashmore Group 2,526.73
MNDI Mondi 2,434.81
ISAT Inmarsat 2,429.92
PSN Persimmon 2,359.91

PNN Pennon Group 2,348.33

[gateside] 10/11/2012 21:23

on Friday 2nd November they were 107th - but the share price has fallen quite a bit since then.

[miata] 10/11/2012 18:59

It would have to fall to 111th position at the next FTSE100 review on Wednesday 12 December.

Previous Pennon index moves 09/09/09, 29/06/12.

[gateside] 10/11/2012 17:28

looks like pennon might get kicked out of the ftse100 at the next review - unless the share price recovers a bit

[miata] 10/11/2012 09:38

My view is that the increased taxes on landfill will force councils into ever more recycling (my council is preparing to issue much larger recycling bins) and recyclate prices will continue to fall.

[miata] 10/11/2012 09:38

On the positive side, green energy madness (while china opens more coal-fired power stations every day) means the proposed Energy Recovery Facility at Viridor's recycling site in Beddington will benefit from high prices for the 26 megawatts of electricity it will produce.

[lobby ludd] 09/11/2012 16:41

Recyclate prices (weak and falling sharply), hurting this one.