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Pennon Group PLC on Friday said its financial performance remains on track, although guidance fell short of consensus, amid the benefits and challenges from the hot weather. In a trading statement covering April 1 to September 25, the Exeter, England-based water utility company explained that high demand for water over the summer due to the hot weather was more than offset in revenue by increased meter usage, deferring sales into financial 2027. In addition, the hot weather also resulted in higher operational costs to respond to the increased demand and operational pressure on the networks. Despite this, Pennon said it has made a ‘strong return’ to profitability, with earnings before interest, tax, depreciation and amortisation anticipated to increase by 60% year-on-year, net of revenue deferred into financial 2027. In the financial year to March 2025, Pennon reported underlying Ebitda of £335.6 million. RBC Capital Markets said Ebitda guidance was previously a broadly two thirds increase, with consensus currently implying a 67% increase year-on-year at £562 million versus the 60% being implied, which suggests some ‘softening’ in the number. Shares in Pennon were down 0.9% to 449.56 pence each in London on Friday morning. Pennon said it is on track to deliver its 7% return on regulated equity target, with efficiencies in delivering the capital programme more than offsetting other cost pressures. In Wastewater Services, financial 2026 outcome delivery incentives are tracking to be net neutral, Pennon said, noting pollution incidents have halved in the eight months to August, while storm overflow spills have reduced by nearly 50% year-on-year. But in Water Services, ODIs have been impacted by supply interruptions from a burst main at the Dousland Water Treatment Works. Dry ground conditions across its regions led to increased network incidents and leakage, the firm pointed out. Pennon said construction is underway on all four of the major power projects with Dunfermline in Fife and Cullerlie in Aberdeenshire both fully constructed and scheduled to be generating power during October. When all four sites are operational by the end of financial 2027, Pennon Power’s renewable energy portfolio will generate the equivalent of 40% of the group’s total consumption, it said. Outgoing Chief Executive Susan Davy said: ‘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.’ Pennon said the board is progressing a ‘rigorous’ search process to appoint the next CEO to succeed Davy, who announced her intention to retire in July. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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