London · Delayed Price · Currency is GBP · Price in GBX Pennon Group Earnings Call Transcripts
Fiscal Year 2026
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EBITDA rose 55% year-over-year, driven by tariff increases and operational improvements, while adverse weather and regulatory penalties weighed on results. Strategic transformation is underway, with a focus on asset management, customer service, and environmental performance.
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Profitability rebounded in H1 2025-2026, with operating profit and EBITDA more than doubling year-on-year, driven by higher tariffs, increased consumption, and strong cost control. Significant operational improvements were achieved in wastewater and environmental performance, while robust investment and efficient financing underpin future growth.
Fiscal Year 2025
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Delivered 70% of regulatory targets, with flat revenues and a £35.1m loss due to investment and lower demand. Strong balance sheet, major acquisitions, and a reset position the group for a return to profitability and 7% RORE in K8.
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Management targets 7% real RORE, £86m in efficiency savings, and improved balance sheet flexibility through interim determinations. Operational focus includes supply chain optimization, local storm overflow interventions, and achieving a four-star EPA rating by 2028, with ongoing regulatory engagement.
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Ofwat has approved a record £3.2 billion investment plan through 2030, supported by a £490 million rights issue and a stable gearing policy. The company targets a 7% RORE, with outperformance expected from efficiency, financing, and ODIs, and is investing heavily in environmental improvements.
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A record £3.2 billion investment plan through 2030 is set, backed by a £490 million rights issue and acceptance of Ofwat's final determinations. Projected 34% RCV growth, strong operational performance, and a revised CPIH-linked dividend policy underpin a robust outlook.
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RCV guidance is just under £6bn, with gearing at 64%-65% due to advanced investments and lower revenues. Awaiting the December 19 FD, the group is focused on operational efficiency, customer support, and maintaining a strong funding position.
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Resilient H1 2024-25 results with revenue up 17.5% year-over-year, driven by SES acquisition and strong non-regulated business growth. Record investment and robust operational performance offset by higher costs and a statutory loss before tax.