Pennon returns to profit as revenue and EBITDA rise

Pennon Group plc (LON:PNN) has announced its results for the full year ended 31 March 2026.

Keith Haslett, Group Chief Executive Officer, commented:

“I am delighted to have started my tenure as Chief Executive at Pennon, at what is an important moment both for the Group and for the wider UK water sector.

As Pennon enters a new era under my leadership, it does so on the back of a return to profitability and the mobilisation of our AMP8 investment plan. However, it is clear that there is more work to do, and improving operational discipline and capital delivery will be important to meet the commitments we have made and the standards we aspire to achieve in the future.

Focusing on operational excellence, driving a performance culture and delivering through technology and innovation will be my key priorities, to improve performance for our customers and the communities we serve.”

FINANCIAL PERFORMANCE

Financial highlights

·    Return to profitability in 2025/26, with statutory profit before tax of £114.4 million (2024/25: loss of £72.7 million)

·    55% increase in underlying EBITDA as a result of increased revenues and a focus on cost management

·    Regulated water revenue up c.25% year-on-year, driven by the benefit of increased regulatory revenue allowances and higher consumption

·    A focused start to our AMP8 capital investment programme, with £643.6 million of capital investment across the Group in 2025/26 – reflecting £588.5 million of investment in our water businesses as we focus on delivering on our AMP8 commitments

·    2025/26 Return on Regulated Equity (RoRE) of 6.7%, with outperformance on financing and totex partly offset by ODI penalties.

·    Full year dividend of £138.2 million (2024/25: dividend £133.7 million), resulting in a dividend per share of 29.29p.

Operational highlights

·    Our Pollution Incident Reduction Plan continues to deliver tangible improvements with a c.34% reduction in year-on-year on pollutions, and normalised pollutions reducing by c.53%³

·    Storm overflow use reduced by 17% reduction over the past year, with spill duration reducing c.25% reflecting continued investment in our infrastructure, despite South West England receiving around 150% of average rainfall in November and December

·    Water quality performance remains strong with sector leading performance in SES and strong performance in South West Water. Water resources exceed our target position at 98%, aided by investment in storage resilience and high rainfall

·    Exceptional storms and sustained rainfall coupled with a step up in targets and penalty rates from the beginning of the new regulatory cycle created operational pressures across water and wastewater for 2025/26, resulting in a net operational ODI penalty of c.£42.0 million⁴

·    Investment in Pennon Power has continued with two of our four sites, Fife and Aberdeenshire, fully energised and generating revenues

·    Environmental and social focus resulted in 250 hectares of peatland restored during the year, and 2,370 people engaged in events, volunteer days and school excursions

·    c.11% increase year-on-year in customers on one or more of our support tariffs, as we support our customers with affordable bills

Outlook

·    With a renewed focus and a strengthened leadership team, Pennon is well positioned to deliver for customers, communities, and the environment in the years ahead

·    Our investments, combined with a refreshed and enhanced operational plan that we are developing will benefit customers and communities across our regions, whilst creating a 34% growth in RCV over AMP8. c.£250 million⁵ submission to Ofwat for further investment in asset health, providing further growth opportunity whilst supporting resilience

·    Our financial performance will continue to improve through increased revenues and ongoing focus on cost management; operational performance will remain in net ODI penalties as we look to improve operational outcomes.

·    We are well positioned for anticipated changes in the water sector and stand ready to support the government’s Transition Plan.

·    Continued drive on efficiency and innovation in our approach as we focus on our strategic priorities – building resilience, fixing storm overflows, powering our net zero ambitions and delivering improved services for customers.

·    Strategic update to follow before the end of September 2026.

Notes:

^{^} Measures with this symbol are defined in the Alternative Performance Measures (APM) section of this document, underlying measures are presented before non-underlying items

¹ Non-underlying items are those that in the Directors’ view should be separately disclosed by virtue of their size, nature or incidence to enable a full understanding of the Group’s financial performance in the year and business trends over time. Excluding these items is considered to provide additional useful information on the performance and the position
of the Group as well as enhancing the comparability of information between reporting periods. The presentation of
results is consistent with internal performance monitoring.
² Dividend policy of CPIH. 2025/26 dividend reflects 2024/25 base increased by CPIH of 3.4% at 31 March 2026.

³ Using the Environmental Agency’s EPA metric reflecting increased sewer length.

⁴ Net ODI penalty (in 2022/23 prices) across water and wastewater for both in-period and end of AMP measures, reflecting adjustments for items under review with Ofwat and third-party impacts

⁵ In 2022/23 prices

Results presentation

A live presentation of these results hosted by Keith Haslett, Group Chief Executive Officer and Laura Flowerdew, Group Chief Financial Officer, will take place at London Stock Exchange, 10 Paternoster Square, London, EC4M 7LS at 9:00am (BST), today, 10 June 2026. The presentation will be immediately followed by audience Q&A.

The event will be available to view online as a live webcast and can be accessed via our website here: https://www.pennon-group.co.uk/investor-information