27th Nov 2025 10:06
(Alliance News) - Pennon Group PLC on Thursday hailed a "strong return to profitability" driven by cost management and revenue growth.
The Exeter, England-based water utility swung to a pretax profit of GBP65.9 million for the six months ended September 30 from a loss of GBP38.8 million a year before, driven by improved revenue and cost management.
Revenue rose 25% to GBP658.1 million from GBP527.2 million a year ago.
Earnings before interest, tax, depreciation and amortisation surged by 78% to GBP254.4 million from GBP143.3 million. The company said cost management, with savings being released from restructuring and efficiency programmes, led to this "step change" in Ebitda.
Water revenue increased by 26% to GBP518.5 million from GBP412.9 million, which Pennon attributed to the positive impact of the final UK regulatory determination, which was accepted at the start of the year for South West Water and SES Water.
"These regulatory changes have provided a stable platform for growth and a reset for the K8 regulatory period," Pennon said.
Retail revenue rose 24% to GBP135.8 million from GBP110.0 million. "Underlying tariff increases across wholesale water charges...resulted in increased market engagement by customers," the company said.
Pennon declared a GBP43.7 million interim dividend, or 9.26 per share, up 4.1% from GBP42.0 million a year before. Last year, Pennon paid an interim dividend of 14.69p per share, but it noted on Thursday that the lower per-share amount reflects the rights issue it conducted in January and February. Pennon issued 13 new shares for each 20 existing ones, raising GBP490 million.
Looking ahead to all of financial 2026, Pennon said it expects underlying Ebitda of GBP537.0 million. This would be up 60% from the GBP335.6 million the company reported For financial year 2025.
Regulated Water group revenue is expected to increase by between GBP185 million and GBP210 million, with Retail revenue to rise with sector-wide tariff increases. The company added that it anticipates first revenue from Pennon Power in the second half.
"We have made a robust start to the first half of 2025/26 and the new K8 regulatory period. With a strong return to profitability and disciplined cost control, we are on track financially and growing sustainably," Chief Executive Susan Davy said.
"Focused on our customers' priorities, we are delivering step change improvements in our wastewater business, with pollution incidents halved compared to last year. This reflects our operational focus and continued momentum of record capital investment over the last two years, thanks to the early mobilisation of our supply chain.
"Our strong balance sheet and funding approach position us well to deliver our largest ever capital programme through K8, focused on the four priorities that matter most to our customers - ensuring the availability of safe, clean drinking water as summers become hotter and drier, tackling pollutions and storm overflows, protecting the environment and supporting customers to use less and save more."
Shares in Pennon rose 2.9% to 544.00p on Thursday morning in London.
By Roya Shahidi, Alliance News reporter
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