REG - Pennon Group PLC - Trading Statement

PennonAnnouncement

26/09/2025 07:00

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RNS Number : 9147A  Pennon Group PLC  26 September 2025

PENNON GROUP
PLC

26 September 2025

Trading Statement -

A robust start to K8

Pennon Group announces the following trading update for the period from 1
April to 25 September 2025.

Susan Davy, Group Chief Executive Officer commented:

"We're driving real improvements for our customers and communities whilst
delivering a return to strong profitability. Despite the pressures of a hot
summer, we've maintained resilient water supplies and continued to improve
services for our customers. Whilst there is more to do, our pollution
reduction plans are delivering tangible benefits, halving the number of
pollutions and spills from storm overflows, reducing our impact on the
environment."

Key highlights

·     On track against expectations in 2025/26, with a strong return to
profitability

·     Target RORE of 7% underpinned by efficient financing for FY26

·     Price control deliverables on track for 2025/26 - with programme
efficiencies being secured as delivery progresses

·     Robust liquidity position enhanced by £300m new issuance in
September 2025 under EMTN programme

Financial performance for the full year 2025/26 remains on track to deliver a
strong return to profitability.

High demand for clean water over the summer period due to the hot weather has
been more than offset in revenues by increased meter optants and profiling of
tariffs to smooth customer bills, deferring revenue into 2026/27. The hot
weather has also resulted in higher operational costs to respond to the
increased demand and operational pressure on the networks. Despite this, we
have made a strong return to profitability, with EBITDA anticipated to
increase by c.60% year on year, net of revenue deferred into 2026/27. We are
on track to deliver our 7% RORE target, supported in-year by efficient
financing costs, whilst efficiencies in delivering the capital programme are
more than offsetting other cost pressures.

In Wastewater Services, 2025/26 Outcome Delivery Incentives are tracking to be
net neutral - a first for South West Water since ODIs were introduced.
Pollution incidents have halved in the eight months to August 2025, as our
pollution reduction plans deliver benefits. In addition, storm overflow spills
have reduced by nearly 50% year-on-year, benefitting from interventions and
investment in our wastewater network, alongside lower rainfall year on year in
the South West.

In Water Services, Outcome Delivery Incentives have been impacted by supply
interruptions from a burst main at our Dousland Water Treatment Works. Despite
the hot weather and high demand our water resources position benefitted from
our investments following the 2022 drought, although dry ground conditions
across our regions have led to increased network incidents and leakage.

Our five-year capital programme is on track to deliver the Year 1 Price
Control Deliverables associated and we are making good progress in delivering
our wider investment programme, with efficiencies being secured as projects
progress from design into delivery.

Regulatory investigations

Progress is being made to draw regulatory investigations to a close. The
Environment Agency prosecutions in respect of wastewater incidents dating back
to 2015-2021 are progressing through the relevant court process, with action
already taken to resolve any issues. In September, the DWI progressed the
court process in respect of the 2024 water quality incident.

We continue to support the relevant authorities with their investigations.

Pennon Power

Construction is underway on all four of the Pennon Power major projects with
Dunfermline in Fife and Cullerlie in Aberdeenshire both fully constructed and
scheduled to be connected to the Grid and generating power during October 1 
(#_ftn1) . When all four sites are operational by the end of FY27, Pennon
Power's renewable energy portfolio will generate the equivalent of 40% 2 
(#_ftn2) of the Group's total consumption.

Board changes

Following the announcement of Susan Davy's intention to retire from the Group,
the Board is progressing a rigorous search process to appoint the next Chief
Executive Officer.

Our half year results for FY26 will be announced on Thursday 27(th) November.

 For further information, please contact:
 Pennon Group plc
 Sarah Heald            Chief Strategy, Regulatory Affairs and Investor Relations Officer   +44 (0)1392 44 3364
 Media enquiries
 James Murgatroyd       FGS Global                                                         +44 (0)207 251 3801
 Harry Worthington

Cautionary statement in respect of forward-looking statements

Certain statements in this announcement are forward-looking statements
relating to the Group's operations, performance and financial position based
on current expectations of, and assumptions and forecasts made by, management.
They are subject to a number of risks, uncertainties and other factors that
could cause actual results, performance, or achievements of the Group to
differ materially from any outcomes or results expressed or implied by such
forward-looking statements.

The Group's principal risks were described in the 2025 Pennon Group Annual
Report which can be viewed online at http://annualreport.pennon-group.co.uk
(http://annualreport.pennon-group.co.uk) . Such forward looking statements
should therefore be construed in light of such risks, uncertainties and other
factors and undue reliance should not be placed on them. They are made only as
of the date of this announcement and no representation, assurance, guarantee,
or warranty is given in relation to them including as to their accuracy,
completeness, or the basis on which they are made.

No obligation is accepted to publicly revise or update these forward-looking
statements or adjust them as a result of new information or for future events
or developments, except to the extent legally required. Nothing in this
Statement should be construed as a profit forecast.

 1  (#_ftnref1) Liquidated Damages are contractually payable for the period of
lost generation due to delays at Dunfermline; Cullerlie is forecast to
generate in line with the original contracted timeline.

 2  (#_ftnref2) Group energy requirements excluding SES, including battery
storage.

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