I'm joining you from Devon. Today, everyone here is 100% focused on returning a safe water supply to the people and businesses in and around Brixham. Our number one priority continues to be the health and safety of our customers and our operational teams who are working tirelessly around the clock. We're ensuring customers have access to bottled water, and have already restored normal supply to a number of the customers initially impacted. We continue to work at pace, alongside the relevant authorities to restore supply fully to every customer and business, and we won't stop until this is done. We know this has caused significant disruption and distress to our customers. I am really sorry. Customers are right to be angry and will have questions for us. I am fully committed to ensuring our customers have all the answers to all the questions.
But right now, I am 100% focused on restoring the full water supply in Brixham. Immediately after the safe restoration of water, we will have a full investigation into what happened. But be in no doubt, as we work to fully understand what has happened, I am clear that whatever we conclude, it is our responsibility to deliver safe, reliable, and clean drinking water to all our customers. Beyond Brixham, the provision of safe, reliable drinking water is always our priority, in line with our 4 million customers and their expectations. This incident, post-year-end, highlights how important a role we have. So today, I want to take you through the results and highlights of the last year, underlining the sustained investment in our services and infrastructure.
Our fundamentals are strong, reflected in record levels of investment, record support for customers, and creating record levels of jobs directly and in the supply chain, supporting the economic health of the region. We are growing sustainably, whether through acquisition or investment, with an efficiently funded and robust balance sheet, growing shareholder value. Building blocks are in place, focusing on not only what we do, but how we do business, and this, in turn, is ensuring we are making good operational progress, delivering on our four priorities and what matters most to customers. With a strong balance sheet, sustainable future. We have a clear twin-track, organic and acquisitive growth strategy. Let's start with organic. With peak capital investment up nearly two-thirds year-on-year, to GBP 583 million for 2023/2024. This represents our largest-ever investment program in water.
That translates into cumulative RCV growth of 65%, on track to deliver 70% to 2025. This investment delivers asset-backed inflationary returns for investors. Our operations in the group require reliable and efficient power supply, and we are investing to increase our renewable energy provision through Pennon Power, with the first EBITDA contribution due at the end of 2024, supporting our net zero ambitions and meeting 40% of energy requirements for the group. We are also delivering on our acquisition strategy, which is progressing well in two key areas. First, realizing the benefits we set out as part of the Bristol Water acquisition, with around GBP 17 million of annualized operating synergies, and on track for the targeted GBP 20 million run rate for 2024/2025, on top of the GBP 18 million financing benefits already realized.
Secondly, having acquired Sutton and East Surrey Water in January, safeguarding their financial resilience through a successful equity raise. We are now fast-tracking through the CMA process ahead of plan. We continue to deliver across four priorities on what matters most to customers. We're listening, whether from Bristol to Bournemouth and across Devon, Cornwall, and the Isles of Scilly, and soon to be Sutton and East Surrey. Our customer and community roadshows have been a personal highlight, as we have been able to reconfirm our four priorities. In investing to protect water quality and enhance resilience, we have broken the drought cycle for Devon and Cornwall well ahead of plan. In tackling storm overflows at our beaches and eradicating pollutions, we're expecting to retain the gains we have made in the previous years, with a revised trajectory to achieving four-star performance for 2025.
We're working to protect the environment from climate change, with our catchment management schemes progressing well. At the same time, we continue to successfully manage customer bills to be lower than they were 10 years ago, as we pledged to eradicate water poverty. Bills in the region are no longer the outliers in the sector they once were in the aftermath of post-privatization and the GBP 13 billion legacy costs of putting wastewater treatment into the region for the first time. For our PR19 commitments, we are ahead or on track in delivering 70% of our outcome delivery targets. This is also a year in which the weather has been both friend and foe.
Fundamentally, we have broken the cycle of drought, achieving 100% strategic reservoir capacity for Devon and Cornwall ahead of target, with a third of the improvement directly because of our interventions, supported by the weather. This has been a monumental undertaking from teams across South West Water and our supply chain. At pace, we have opened 2 reservoirs at Blackpool Pit and Hawks Tor, alongside a number of pump recharge schemes and increased treatment capacity at Rialton. We are also on track to deliver a 2-phase desalination scheme for Cornwall. This has resulted in us being able to deliver on our 2025 target for Devon a year early, with an increase of 30% resource availability. We are on track for a 45% increase in resource availability in Cornwall, with 30% delivered to date.
It's not just been about fixing the here and now, as we are investing enough today to protect resources over the next 25 years. There are always two sides to the coin. Yes, it's about diversifying our portfolio of resources and investing in those, but also about reducing demand. We are delivering on our leakage targets. Our sector-leading demand reduction schemes are focused on supporting customers to use less water and save money, with over 500 water-saving devices issued every single day. We are also piloting trial tariff schemes to better distribute charges and encourage water efficiency. And while we have protected water resources, water quality continues to be good. In 2023, we have delivered a step change in the Isles of Scilly, with zero failures of treatment processes for Devon, Cornwall, and Bournemouth, and with a robust action plan in place for Bristol.
Briefly, I want to talk about the weather. In doing so, it's not an excuse, but it's important context for the plans we have been focused on, and importantly, evolving where we focus next. As a result of the weather, we are seeing significantly increased wastewater flows, which have impacted our headline performance for wastewater pollutions and the use of storm overflows. With 10 named storms and 12 yellow weather warnings in September, and with the average rainfall increasing by 50% when compared to long-term averages, we have had the 5th wettest year on record for Devon and Cornwall. Rainfall this year in 2024 continues to be above the long-term average, up 40%, and with elevated groundwater levels resulting in a 1-year impact on flows equivalent to the previous 20 years' rate of increase. So let's look at pollutions.
For pollutions, we need to look beneath the headlines to understand how our plans have been improving outcomes. Historically, 70% of our pollutions have occurred in our networks, and the work we have done here is working with performance stabilizing. We're seeing three things: We're achieving sector-leading internal sewer flooding performance, we're outperforming regulatory targets for sewer collapses and blockages, and we're maintaining the gains we've made previously in reducing network pollutions. We've done this by investing in 12,000 sewer deck monitors, supporting predictive and proactive interventions, as well as continuing to invest in rising main replacements and sewer upgrades, alongside supercharging maintenance and targeting cleansing activities. Going back to the 20% increase in flows into our system, we need to remove or divert these flows, so we are focused on infiltration, reduction, and sewer separation to achieve this.
We've had to rebalance efforts at both our treatment works and pumping stations, where the high levels of flows have driven spikes in performance. By reinvigorating action plans, our treatment works performance has recovered from the degradation we saw in 2023, stabilizing performance into 2024, with a combination of inlet and storm tank cleansing, risk-based generator servicing, site-based compliance, re-bed surveys, and refurbishments. Efforts have now turned to our pumping stations, with improved site MOTs and enhanced cleansing, as well as tackling power resilience. Reducing pollutions remains a top priority for the board and all my colleagues. We are clear and transparent about where we are, and over time, we have improved self-reporting of pollution incidents, and we are now one of the best in the sector.
I am reassured that we have maintained serious pollution incidents at our lowest levels for 2023, noting that we are still aiming for zero. For all the incidents, we have a revised trajectory for achieving four-star performance for the 2025 calendar year. The higher flows in our networks has masked demonstrable improvements made through our interventions in reducing the impact of storm overflows. On a like-for-like basis, the investments we are making today are delivering underlying performance improvements, which we will see in future years. There are 280 schemes completed or underway. For example, our work at Hatherleigh Sewage Treatment Works has reduced spills by 90%, and the tank we have installed at Chittlehamholt has reduced spills by 70%.
As we are focused by 2025 on improving 49 of the 151 beaches through our WaterFit program, WaterFit Live is giving communities and visitors to the region near real-time information about their favorite beach, alongside community roadshows, as we place communities at the heart of our plans. While beaches are a priority, we are equally focused on improving river water quality, with reasons for not achieving good ecological status reduced from 19 to 12.4%. We have a nature-first approach to investment. Our award-winning catchment management program is leading the way for biodiversity gains, as well as continuing to help the way others manage their land, improve water quality, biodiversity, and climate resilience. Activities range from building ponds, improving farm tracks, slurry storage, as well as planting trees and buffer strips to catch and filter water.
We have restored 127,000 hectares cumulatively, as well as exceeding our tree planting target of over 250,000. Having worked on our catchments for the last 15 years, we have the science to back up the improvements, and I was delighted that we officially opened our partnership with the University of Exeter in March this year, providing research through a state-of-the-art laboratory into the key challenges and issues facing the water and wastewater sector. In tackling affordability, it is about two things: keeping bills as low as they can be for all customers, and secondly, supporting those who are struggling. We have always been focused on being as efficient as we can be in delivering services and in keeping bill increases to 2025 well below inflation.
That's why we continue to support customers and communities, having provided over GBP 100 million of customer support, with 132,000 customers benefiting from one of our social tariffs, building awareness of our customer outreach engagement programs as well. As a result, over 98% of customers across all our regions find their bills affordable. And against our customer commitment, 70% of our outcome delivery incentive schemes are ahead or on track. Given you can't choose your water provider, we believe you should have a say, which is why we plan to grow our unique WaterShare+ scheme and extend this scheme to certain East Surrey customers for the first time. The building blocks for a sustainable future are in place.
We're reshaping the group to be efficient as we grow, and to ensure we are performance-led with planned improvements in processes and operational effectiveness, which has delivered synergies of GBP 26 million in 2023, 2024, with a targeted GBP 86 million annualized run rate into K8. We are bolstering delivery of the wider supply chain, collectively known as Amplify, with a two-tier supply model already in place and already mobilized, delivering 1,000 projects in support of our GBP 2.8 billion investment in the region. And to be a sustainable business, I've always been clear, our investments can't just be in assets, it's in people, too. We are the only water company to have been recognized as a top 100 employer for apprenticeships.
With over 470 apprenticeships to date, and accredited as a gold employer for our earn and learn approach, 1 in 10 colleagues have either undertaken an apprenticeship or graduate program. We have promoted social mobility, giving young people the opportunity to dive into their local water company. For the 3rd year running, we have had our best health and safety performance as we deliver on our Home Safe strategy to ensure everyone who works for us and with us goes home safe every single day. Finally, we're leveraging technology, trialing AI in customer services, and using predictive modeling to support wastewater operations. Overall, we have a robust financial position with solid financial performance, and we are well positioned for the next regulatory period. Our efficiency programs are focused on keeping costs below inflationary levels, despite the impacts of the unprecedented wet weather.
Furthermore, with a robust balance sheet, we are also efficiently funded and growing shareholder value. Our strategy for financing will continue to seek to ensure we remain one of the most efficient in the sector. We have raised around GBP 1.2 billion of new and renewed facilities since March 2023, and with a successful equity raise of GBP 180 million for the Sutton and East Surrey acquisition, we're well on track for our funding. Our water group gearing at 63.5% is in line with K7 policy, reflecting the increased investment spend in assets and timing of RCV build. Our business-to-business retailers, Pennon Water Services and Water to Business, are delivering over a 50% increase in EBITDA and increased market share through providing excellent customer services.
We paid an interim dividend of 14.04 pence per share on the 5th of April, 2024. We have carefully evaluated the recommended final dividend position, considering performance in the round for the group, growth in our business-to-business retailers, development of the Pennon Power business, and our water businesses, we have considered Ofwat's recent guidance in this area. The final recommended dividend for Pennon has therefore been adjusted to reflect a GBP 2.4 million fine linked to a South West Water prosecution we had in May 2023, where we believe the ultimate shareholders of the group should bear that impact and not the customers. As such, the revised final dividend recommended is 30.33 pence per share. With that, I am pleased to hand over to Steve, who will deliver his first year-end results for the group.
Thank you, Susan, and good morning, everybody. Overall, our financial results for the year 2023-2024 are in line with our expectations. The key themes are: a strengthening income statement, with underlying profits improving to GBP 334.7 million of EBITDA. A step up in capital investment to GBP 642.4 million, which is driving significant growth. 7.3% cumulative outperformance of K7 regulated returns. In excess of GBP 1 billion of equity liquidity, which provides flexibility and resilience. And gearing at 63.5% within our target range. Our headline results include Sutton and East Surrey Water, SES. Since acquisition, and to help comparison with the prior year, in places, we have presented numbers excluding SES, and this is indicated. As we expected, the income statement for the year was weighted to the second half.
The second half has also improved from a loss in H2 2022/23 to a profit. I will walk through the headlines on year-on-year movement on the next slide. Non-underlying costs of GBP 25.9 million are associated with the SES acquisition and establishing a comprehensive cost transformation program and readiness for K8. I will return to this program. Earnings per share, excluding the expected SES loss, are 7.2 pence and are broadly flat year-on-year. Excluding SES, organic revenue growth of around 6% has been achieved as a result of inflationary tariff increases, offset by prior year ODI penalties and adjustment for over recovery from prior years. Following significant inflationary increases in the prior year, the cost base is stabilizing with softer inflation and self-help actions on cost reduction. As a result, the South West Water cost base is broadly flat, despite weather impacts.
As you would expect, as we grow the RCV, the depreciation charge has increased. This is also the case for financing costs, driven by increased debt and increases from higher interest rates. I am pleased with the continued growth and profitability in Pennon Water Services, whose profit for tax has more than doubled in the year. SES is included from date of acquisition of 10th January, and as expected, contributed a loss of GBP 2.5 million. You will be aware of the post-acquisition integration program for Bristol Water. The program is almost complete, having delivered GBP 17 million annualized synergies and is expected to achieve the target GBP 20 million savings.... Our ambitious PR24 plan submission included a commitment to reduce costs, which will reduce customer bills. To underpin this ambition, we have commenced a program to reshape the business.
This program has delivered GBP 9 million Totex benefits in 2023, 2024, and is targeted to achieve around GBP 55 million annualized savings in K8. The program will optimize asset maintenance activity, improve chemical and power consumption of operational sites, reduce our overheads, and strengthen procurement. We have targeted GBP 11 million of integration benefits from the SES acquisition. This program will commence once we have CMA clearance for the acquisition. As you will be aware, from the business plan, year four and five are peak years for the K7 investment program. This has been our largest year of capital expenditure, with investment 80% higher year-on-year, at GBP 642 million, excluding SES.
The regulated water business increased investment by 63% year-on-year to GBP 583 million, with the balance being the commencement of our investment of GBP 59 million into renewable energy, Pennon Power. The K7 investment has enabled significant growth in the RCV, which is now 66% higher than the start of K7. Around GBP 820 million of shareholder value has been created in the water business during K7 from base returns, RCV inflation, and RoRE outperformance. A prudent approach to dividends in the water business has resulted in only GBP 250 million of this value being distributed by South West Water to Pennon for K7 to date, leaving over GBP 500 million of retained shareholder value. The K7 investment program and reinvestment of RoRE outperformance were weighted to years 4 and 5.
We have successfully accelerated GBP 80 million investment from year 5 in the water business to improve resilience to drought and water quality. This is a timing matter only. However, there has been GBP 80 million additional expenditure on base maintenance in order to mitigate the impact of severe weather on pollution and leakage, while expanding our Quality First program. We expect 50% of this expenditure to be recovered in K8. As a result of this, our expectation is that capital expenditure will be around GBP 930 million cumulative for years 4 and 5, as the timing reverses and base maintenance returns to levels in line with the PR24 plan. I'm particularly pleased about our strong liquidity and successful debt-raising activities over the last year.
To support the growth of the business, we have raised around GBP 850 million of debt across our diversified debt portfolio. Our most recent private placement was oversubscribed by 4.5 times. We have increased our liquidity to over GBP 1 billion, which ensures we have flexibility and resilience. We will be establishing an EMTN program, which will expand our debt portfolio to include U.K. and European debt markets. We are well advanced on our work to attain two public credit ratings, which we expect to be strong investment grade. We continue to deliver strong RoRE performance at 7.3% cumulative, equating to around GBP 160 million outperformance. This has enabled the funding of additional capital investment initiatives, as discussed earlier. The structure of the debt book has enabled financing outperformance of GBP 255 million to date in K7.
The outperformance continued in year 4, but has reduced year-on-year due to the impact of falling inflation. ODI penalties have been incurred as a consequence of the extreme weather events, including heavy rainfall through to March 2024. Consistent with our plan submission, there are a number of ODIs, which are calculated at the end of that K7, and we anticipate these being a reward of the order of GBP 20 million. Totex has reduced outperformance by GBP 60 million cumulatively, due to peak levels of capital expenditure. The South West Water gearing is 63.5%, excluding SES. The SES business will be included going forward once the de-gearing has been completed after CMA clearance. The South West Water gearing is about 2% higher than plan due to the higher capital spend and reduced operating cash flows as a result of the income statement.
We are still within our 55%-65% policy range and anticipate this will be the case at the end of K7. As we transition into K8, the group will have flexibility to respond to the outcome of PR24 draft and final determinations. This will include ensuring that we have a strong investment-grade credit rating for South West Water, debt leverage opportunities for Pennon Power, and consideration of the retained value of over GBP 500 million in South West Water. This will lead to the development of K8 balance sheet and capital allocation policies to achieve the best value for shareholders. I'll now hand back to Susan.
All this means that as we look ahead to PR24, we have a robust base on which to build. It's an ambitious plan that we have, based on the four priorities that customers care about the most. We will be investing and investing efficiently. Total expenditure in the plan will be GBP 4.5 billion, with 12% of efficiency, keeping bill increases to a minimum, and with a good support from customers at 74%. For investors, there is growth. In nominal terms, 38%. In real terms, 25%. We have put forward an ambitious set of outcomes that will see the opportunity to gain from good performance and with an ability to share this between investors and customers, with a 8.6% maximum return on regulated equity.
With a draft determination due on the twelfth of June, we stand ready to deliver, with an investor update planned for that day and a capital markets day in late September. In summary, our fundamentals are strong, reflected in record levels of investment, record support for customers, and creating record levels of jobs directly and in the supply chain, supporting the economic health of the region. We are growing sustainably, whether through acquisition or organic investment, with an efficiently funded and robust balance sheet, growing shareholder value. Building blocks are in place, focusing on not only what we do, but how we do business. This, in turn, is ensuring we are making good operational progress, delivering on our four priorities and what matters most to customers in U.K. Water, well positioned for the future with robust financials. Thank you.