Pennon Group (PNN) investor relations material

Executive summary

• New CEO Keith Haslett outlined a transformation agenda focused on operational excellence, customer service, and environmental improvement, leveraging his extensive water sector experience.

• Returned to profitability in 2025/26, with operating profit more than doubling year-over-year and a 23% increase in revenues.

• Achieved a 55% increase in underlying EBITDA, driven by revenue growth and cost management.

• Strategic priorities include customer transformation, people and culture, asset management, water quality, pollution reduction, Net Zero, and customer affordability.

• Focused on capital investment, environmental performance, and customer experience, with a record £3.2bn capital programme underway.

Financial highlights

• Revenue rose to £1,291.4m from £1,047.8m year-over-year, driven by a 23% increase in water tariffs and higher customer consumption.

• Underlying EBITDA increased by 55% to £519.2m, with operating profit reaching £325.5m.

• Dividend per share was 29.29p, in line with policy and increased by CPIH.

• Group CapEx totaled £644m, with Water Group gearing stable at 61.8%.

• Net debt at 31 March 2026 was £4,379.6m, up from £3,936.2m.

Outlook and guidance

• Revenue expected to increase by £50–70m next year, with Water Group costs rising up to 5%.

• Group EBITDA projected to grow 5–10% year-over-year; depreciation and financing costs to rise by up to 10% and 15% respectively.

• Non-regulated business revenue projected to grow 10–15%; CapEx guidance of £620–700m.

• Ongoing focus on investment, customer transformation, and sector reform.

• Operational performance expected to improve, but Water Group likely to remain a net ODI penalty due to challenging targets and weather impacts.