In a trading update ahead of its financial results for the first half of the year – to be announced in November – Pennon Group has said it is ‘on track’ to meet management expectations.
Viridor’s growing portfolio of energy recovery plants remain a strong division of the business Pennon has said – with the eight operational facilities on track to help deliver £100 million of earnings in 2016/17.
The Board will also decide whether to proceed with investment in an additional facility in Avonmouth this year, Pennon has confirmed.
Plans for a 350,000 tonnes-per-year capacity mass burn plant gained consent in 2011 – and were upheld by the High Court despite a legal challenge from Bristol city council. Since that time Viridor has been in talks with officers at the Somerset Waste Partnership concerning the ‘practical and financial implications’ of diverting its waste from landfill to the proposed facility.
Earnings
Pennon Group’s additional earnings in the first half of the year have been driven by the ‘ramping up’ of Viridor’s 85,000 tonnes-per-year capacity Peterborough ERF – which opened in January (see letsrecycle.com story).
Increased availability of waste feedstock at Trident Park in Cardiff and the Runcorn EfW in the North West have also boosted EBITDA, Pennon has claimed.
In December 2015, Viridor was awarded a contract to process waste on behalf of Rhondda Cynon Taf, Merthyr Tydfil, Blaenau Gwent and Torfaen councils – bringing the number of Welsh local authorities served by the Cardiff plant to nine (see letsrecycle.com story).
Viridor is meanwhile working to bring three further EfW plants online, with Beddington in South London and Dunbar in Scotland continuing to make progress.
Viridor is also working to complete the Glasgow Recycling and Renewable Energy Centre ‘as soon as possible’, having received compensation following the ‘deterioration’ of its contract with construction firm Interserve earlier in the year (see letsrecycle.com story).
The plant is now receiving some waste and the Centre’s materials recycling facility (MRF) has entered commissioning.
Landfill
Elsewhere, Viridor has closed two landfill sites in 2016/17 with volumes declining across its 13 open sites. On the firm’s recycling portfolio, the update adds that ‘self-help measures’ in recycling are delivering the anticipated increase in EBITDA year-on-year.
Chris Loughlin, Pennon chief executive, said: “Pennon has made a good start to 2016/17 delivering a strong performance across both water and waste.”
Earlier this month, Phillip Piddington was appointed chief executive of Viridor following the sudden departure of Ian McAulay, who left the company after three years in the post. On the morning of the announcement Pennon Group’s shares fell to 870.5 pence, but the share price has risen to 897.00 pence today (see letsrecycle.com story).
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