Pennon lifts EBITDA as storms, fines and capex define pivotal year

An update from Pennon Group plc ( (GB:PNN) ) is now available.

Pennon Group reported an approximate 55% year-on-year increase in EBITDA for the period to 9 March 2026, with underlying profitability for 2025/26 expected to be within market expectations, though at the lower end. Operational performance has been challenged by exceptional rainfall and storm-related power outages, which are expected to result in a net ODI penalty across water and wastewater services.

Despite adverse weather, wastewater pollution incidents have fallen by about 40%, with normalised pollution down 55% and storm overflow use reduced 17%, reflecting substantial infrastructure investment. Water quality remains strong with upper-quartile performance, while early mobilisation of the AMP8 capital programme is on track, supported by a robust balance sheet and liquidity.

Pennon is progressing regulatory investigations related to historical wastewater incidents and a 2024 water quality event, which it expects to conclude during 2026. The group is also advancing its Pennon Power renewable energy portfolio, with two of four sites now energised and the full portfolio expected to generate the equivalent of 40% of the group’s energy consumption by FY27.

Leadership change is underway, with Keith Haslett set to become chief executive officer from 1 April 2026. The company reiterated that its largest-ever capital programme remains fully funded, aiming to deliver efficiencies, asset health improvements and returns on capital over the K8 period despite ongoing regulatory and operational pressures.

The most recent analyst rating on (GB:PNN) stock is a Hold with a £646.00 price target. To see the full list of analyst forecasts on Pennon Group plc stock, see the GB:PNN Stock Forecast page.

Spark’s Take on GB:PNN Stock

According to Spark, TipRanks’ AI Analyst, GB:PNN is a Neutral.

Pennon Group’s overall stock score reflects a mix of strengths and challenges. The most significant factor is the company’s financial performance, which shows revenue growth but also highlights profitability and leverage concerns. Technical analysis indicates positive momentum, while the high P/E ratio suggests potential overvaluation. The earnings call and corporate events provide optimism with strong operational achievements and strategic initiatives.

To see Spark’s full report on GB:PNN stock, click here.

More about Pennon Group plc

Pennon Group plc is a UK-based water and wastewater services provider, primarily operating through South West Water and SES. The group focuses on regulated utilities in South West England and other regions, and is expanding into renewable energy generation through its Pennon Power portfolio to support its operational energy needs.

Average Trading Volume: 1,288,640

Technical Sentiment Signal: Buy

Current Market Cap: £2.53B

Learn more about PNN stock on TipRanks’ Stock Analysis page.