Pennon Group (PNN) H1 2026 earnings summary

Executive summary

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

• Maintained momentum from record investment in K7 and early supply chain mobilization, with over 1,000 capital investment schemes underway and £304.8m invested in H1.

• Focused on four strategic priorities: safe drinking water, tackling storm overflows, driving environmental gains, and customer support.

• 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 in H1 2025/26, driven by higher tariffs and increased consumption.

• Underlying EBITDA rose 55.6% to £254.4m, with operating profit more than doubling to £158.6m.

• Statutory profit before tax moved from a prior year loss to £65.9m.

• Adjusted earnings per share improved to 14.0p from (5.5p) year-on-year.

• Interim dividend per share was 9.26p, covered 5.8x by underlying EBITDA.

Outlook and guidance

• On track to deliver a 7% Return on Regulated Equity (RORE) for K8, supported by efficient financing.

• Group EBITDA projected to rise by approximately 60% year-on-year for FY 2025/26.

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

• Revenue expected to normalize over the winter, with continued focus on cost management to offset inflation.

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