Pennon Group PLC (LSE:PNN, OTC:PEGRY) shares rose 3% to 544.5p as the water company reported a return to profit for the first half of 2025/26, but the results were not as strong as some analysts expected.
The owner of South West Water and Bristol Water also cut its interim dividend by nearly a quarter to 9.26p per share, citing timing mechanics following last year’s rights issue.
Results for the half year ended 30 September showed statutory pre-tax earnings of £65.9 million compared to a £38.8 million loss a year earlier, driven by higher water revenues and improved cost control.
Underlying EBITDA jumped 56% to £254.4 million, with the company on track to deliver a 7% return on regulated equity for the year, as revenue rose 25% to £658.1 million, benefiting from tariff increases and higher summer demand.
Capital expenditure remained elevated at £304.8 million as the group pressed ahead with early delivery of its record K8 investment programme.
UBS described the results as “weak”, with earnings per share about 6% below their estimate and a 19% shortfall in the interim dividend, though the full-year payout is expected to remain in line with previous guidance. Pennon
They said there was "not much new, given the company is in a holding pattern pending the start of the new CEO", Keith Haslett, who will start in 2026.