2 May 2017
PENNON GROUP PLC
Update on Viridor's Greater Manchester Contract
As reported in Pennon's Trading Statement on 9 February 2017, the Greater Manchester Waste Disposal Authority (GMWDA) continues to face financial challenges due to prolonged austerity.
Diversion of waste from landfill remains ahead of contractual commitments and Viridor and its partners are keen to ensure this progress is able to continue. Viridor and its joint venture partner John Laing have been actively engaging with GMWDA as they have worked to consider their options. Following a GMWDA meeting held on 26 April 2017, GMWDA has now confirmed it is seeking an exit from the Recycling & Waste Management Private Finance Initiative (PFI) Contract. This Contract relates to Viridor Laing (Greater Manchester) Limited.
Discussions and negotiations are now expected to progress over the coming weeks as we work with GMWDA to ascertain the implications. There are provisions in the PFI Contract for compensation to be paid to Viridor and John Laing on termination.
The book value of Viridor's investment in the Greater Manchester project as at 31 March 2016 is £72.3 million, of which Viridor Laing (Greater Manchester) Limited represents £36.8 million and Ineos Runcorn (TPS) Limited represents £35.5 million.
Pennon continues to anticipate reporting a strong financial performance for the Group at its full year results for 2016/17 on Wednesday 24 May 2017.
For further information, please contact:
Pennon: Susan Davy - Chief Financial Officer
Sarah Heald - Director of Corporate Affairs & Investor Relations
01392 443 401
Finsbury: James Murgatroyd
Faeth Birch
0207 251 3801
Notes to Editors
This Contract relates to Viridor Laing (Greater Manchester) Limited, which is jointly owned by Viridor and John Laing. Both Ineos Runcorn (TPS) Limited, jointly owned by Viridor, John Laing and Inovyn, and Viridor Waste (Greater Manchester) Limited, that is wholly-owned by Viridor, are contractually linked to Viridor Laing (Greater Manchester) Limited.
Cautionary statement in respect of forward-looking statements
Certain statements in this announcement are forward-looking statements relating to the Group's operations, performance and financial position based on current expectations of, and assumptions and forecasts made by, management. They are subject to a number of risks, uncertainties and other factors that could cause actual results, performance or achievements of the Group to differ materially from any outcomes or results expressed or implied by such forward-looking statements. The Group's principal risks were described in the 2016 Pennon Group Annual Report which can be viewed online at http://www.pennonannualreport.co.uk/2016/.
Such forward looking statements should therefore be construed in light of such risks, uncertainties and other factors and undue reliance should not be placed on them. They are made only as of the date of this announcement and no representation, assurance, guarantee or warranty is given in relation to them including as to their accuracy, completeness, or the basis on which they are made. No obligation is accepted to publicly revise or update these forward-looking statements or adjust them as a result of new information or for future events or developments, except to the extent legally required. Nothing in this Statement should be construed as a profit forecast.
