UK's Pennon Group sees annual profit at low end of forecasts as costs rise (updated)

Pennon

10/03/2026 08:21

Adds results in paragraph 4, background and details throughout

March 10 (Reuters) - British water utility Pennon Group PNN.L said on Tuesday that it expects underlying profitability for the full year ending March 2026 to be at the lower end of market expectations as a result of higher costs experienced in the year.

Exceptional storms and heightened rainfall in the second half of the year drove the water utility's operational costs, which has been facing penalties and regulatory pressures in the recent years.

   Pennon added that its Outcome Delivery Incentives (ODI) performance — the metric that ties operational results to financial rewards or penalties — is expected to result in a net penalty position across its water and wastewater operations for the full year.

Still, the company's core profit increased 55% year-on-year for the period between September 30, 2025 to March 9, 2026.

The company's trading update comes at a time when water companies in the UK are facing increased scrutiny over sewage spills and environmental performance.

 (Reporting by Rishab Shaju in Bengaluru; Editing by Nivedita Bhattacharjee)

 ((Rishab.shaju@thomsonreuters.com ; +91 9048142177))