Pennon shares down after EBITDA forecast miss and water service interruptions

Published 26/09/2025, 08:44
© Reuters.

Investing.com -- Pennon Group shares traded lower on Friday after the company said it expects a 60% rise in EBITDA for 2025/26, slightly below analyst forecasts, as reductions in wastewater pollution are offset by supply interruptions in water services.

The British water utility company said it expects earnings before interest, tax, depreciation and amortization to increase about 60% year over year, compared with Jefferies and consensus forecasts of 66% and 67%. 

Jefferies noted that part of the difference could reflect the timing of revenue recognition across the current and next financial year to manage billing.

In wastewater, Pennon projected it would be net neutral on Outcome Delivery Incentives for 2025/26, marking the first time the company expects a balance.

The improvement is being driven by reductions in pollution incidents and storm overflows. 

In water services, performance was affected by supply interruptions, leading to a small negative impact on ODI outcomes for the year. 

Jefferies said this represented a modest downward adjustment from earlier guidance, which had indicated neutral performance.

The company said it is on track to deliver its five-year investment plan and achieve a 7% return on regulated equity. 

On ongoing Environment Agency investigations, Jefferies said there were no material updates, with the process continuing through the courts.

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