Exploiting the huge potential in waste-based renewable energy generation

During February, the Greek saga continued to play out. Greece has now secured a €130bn rescue package. In return, the Greek cabinet approved a set of reforms agreed with the so called ‘Troika’ comprised of the EU, International Monetary Fund and the European Central Bank.

It is safe to say that global markets will be watching events in Europe closely over the coming weeks. The euro zone has been the main focus at the G20 gathering in Mexico.
Meanwhile, German lawmakers voted overwhelmingly to endorse a second rescue package to keep Greece from a default. The rest of Europe is keen to keep Greece afloat as a default scenario would have a far reaching impact.

Surprisingly, against this worrying backdrop, the equity markets in the main have bounced back during February. The question now is can this run up be sustained or will Europe continue to be a drag?  Watch this space to see how it all unfolds in 2012!

Our pick for the Ethical/Renewables Portfolio this month is:


•       Pennon Group Plc (PNN:L)

Pennon Groups strategy is clearly focused on water and sewerage services; recycling; renewable energy and waste management. The company strategy is to grow and add value by proactively developing new recycling operations to meet ambitious EU/UK targets, successfully exploiting the huge potential in waste-based renewable energy generation  and capitalising on its strong position in landfill waste disposal .

Pennon was the top ranked Utility in “Britain's Most Admired Companies”awards in 4 areas

-quality of management

-capacity to innovate

-community and environmental responsibility

-use of corporate assets

So, the company has strong SRI credentials.

The company profits have been steadily increasing and dividends have also increased. Revenue was up 5.8%, Operating profit was up 7.5% and Profit before tax was up 8.5%. The full year dividend 2010/11 was up 9.3% to 24.65p.

The long-term economics of recycling and energy recovery look compelling and Pennon Group continues to grow its business by targeting acquisitions which add value for shareholders. If you are looking to invest in recycling and water management and want a steadily increasing dividend then Pennon Group could fit the bill.