(Reuters) -British water utility Pennon Group said on Friday it remains on course to return to profitability in fiscal 2025-26, despite higher operational costs from surging demand for clean water
Pennon Group Aims for Profitability by 2025-26 Amid Cost Challenges
Pennon Group's Profitability Goals
(Reuters) -British water utility Pennon Group said on Friday it remains on course to return to profitability in fiscal 2025-26, despite higher operational costs from surging demand for clean water amid hot weather.
Operational Cost Challenges
Revenues were supported by increased metering and adjusted pricing, though some income was deferred into 2026-27 to smooth customer bills.
Environmental Performance Improvements
The trading update comes as Britain's water companies face intense scrutiny over sewage spills and environmental performance.
Future Earnings Expectations
In its Water Services division, Pennon reported that pollution incidents halved in the eight months to August 2025, while storm overflow spills dropped nearly 50% year-on-year.
Leadership Transition
"We're driving real improvements for our customers and communities whilst delivering a return to strong profitability," Chief Executive (CEO) Susan Davy said, highlighting that pollution reduction plans were "delivering tangible benefits."
South West Water's owner expects earnings before interest, taxes, depreciation, and amortisation (EBITDA) to rise about 60% year-on-year in 2025–26, while maintaining its 7% return on regulated equity (RORE) target despite elevated costs from increased water demand in the hot summer months.
The board also continues its search for a new CEO following Davy's retirement announcement earlier this year.
(Reporting by Ankita Bora in Bengaluru; Editing by Sumana Nandy)
