Pennon Group (PNN) H1 2026 earnings summary

Executive summary

• Achieved a strong return to profitability in H1 2025/26, with statutory profit before tax of £65.9m versus a £38.8m loss in H1 2024/25, and significant operational improvements including a step change in wastewater performance and environmental gains.

• Record investment momentum maintained, with over 60% of the K8 price control delivery program in progress and more than 1,000 capital investment schemes underway.

• Customer priorities remain central, with significant progress in storm overflow reduction, water quality, and customer support initiatives.

• Well positioned for sector reform and regulatory changes, with a focus on customer outcomes and environmental gains.

• Pollution incidents halved and storm overflow spills reduced by 45%, demonstrating environmental progress.

Financial highlights

• Revenue increased by 25% year-on-year to £658.1m, driven by higher tariffs and increased customer consumption.

• EBITDA rose by 55% to £254.4m, and operating profit more than doubled to £158.6m.

• Profit before tax moved from a loss in the prior year to a profit of £65.9m.

• Adjusted earnings per share increased to 14.0p, more than covering the interim dividend of 9.26p per share.

• CapEx in H1 was £305m, with £279m in Water Group and £25m in renewables.

Outlook and guidance

• On track to deliver a 7% return on regulated equity (RORE) for the water group on a real notional Watershare basis.

• EBITDA anticipated to increase by around 60% year-on-year, with continued focus on cost management to offset inflationary pressures.

• Revenue expected to normalize over the winter period, with strong financing outperformance supporting targets.

• Capital investment guidance of £710–£740m for the year, with front-loaded Water Group investment.

• Dividend policy to 2030: base dividend to grow in line with CPIH.