Pennon full-year earnings rise, dividend up 5 pct

(Adds details, South West Water CEO comment, analyst comment, share price)

LONDON, May 20 (Reuters) - British utility Pennon reported a 1 percent rise in full-year core earnings on Wednesday, slightly ahead of expectations, allowing it to pay shareholders a dividend of 31.8 pence per share, 5 percent above last year's payout.

The water and environmental services group maintained its target to pay shareholders annual dividend increases of 4 percent above retail price inflation to 2020, making it an attractive target for long-term investors.

"We believe that the results were slightly ahead of expectations, and that Pennon remains well placed," said Angelos Anastasiou, utilities analyst at Whitman Howard.

Shares (Frankfurt: DI6.F - news) in Pennon were 0.2 percent lower at 0751 GMT.

The group saw full-year core earnings of 411 million pounds ($636.60 million), mainly thanks to higher profits at its Viridor recycling and waste management unit.

Pennon is also on track to finalise its 100.3 million pound acquisition of Bournemouth Water in the coming six months. The utility plans to integrate Bournemouth Water's wholesale business into its own activities in the area, said Chris Loughlin, chief executive of Pennon's South West Water. ($1 = 0.6455 pounds) ($1 = 0.6456 pounds) (Reporting by Karolin Schaps, editing by Louise Heavens)