Listed companies provide pre-close updates

(by Verity Mitchell)

> Pennon trading at the lower end of market expectations 

In its pre-close update ahead of its full-year results for the year ending 31 March 2026, Pennon said EBITDA is expected to increase by c.55% year-on-year, despite weather-related cost pressures and higher costs in the first year of the regulatory cycle. The board expects profitability to be within the range of market expectations for 2025/26, albeit at the lower end.

South West Water’s Pollution Incident Reduction Plan continues to deliver improvements with a c.40% reduction year-on-year on pollutions, and normalised pollutions reduced by c.55%. Storm overflow use fell 17% over the year, with spill duration down c.25%, reflecting substantial investment.

In water services, water quality performance is industry upper quartile for South West Water and SES. Water resources were ahead of target, aided by increased resilience and high rainfall. Power outages during Storm Goretti and Storm Chandra had a widespread impact on South West Water's operations, requiring increased activity on mains bursts and leakage remediation. Owing to exceptional rainfall, full-year Outcome Delivery Incentive (ODI) performance is anticipated to result in a net penalty. Price Control Deliverables remain on track for the first year of AMP8. Efficiencies are being successfully realised, whilst investment in asset health through base maintenance will underpin its 7% return on regulated equity (RORE) targeted for AMP8.

Progress is being made to draw regulatory investigations to a close. The Environment Agency prosecutions regarding wastewater incidents dating back to 2015-2021 are progressing through the relevant court process and are expected be concluded during 2026. The DWI court process concerning the 2024 cryptosporidium water quality incident is progressing and is expected to conclude during Summer 2026.

Two renewable generation sites within Pennon Power are now energised: Dunfermline in Fife, and Cullerlie in Aberdeenshire. The remaining sites are progressing toward connection. 

Keith Haslett will join the business as chief executive officer from 1 April 2026. 

Pennon’s full-year results for 2025/26 will be announced on Tuesday 2 June.

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> UU trading in line with expectations but new debt measure pushes up EPS guidance 

United Utilities (UU) expects underlying earnings per share (EPS) for 2025/26 to be in line with guidance at around 100p. 

UU is implementing a change in the estimation technique used to measure inflation-linked debt. This approach will smooth the impact of unusually high or low inflation over the remaining life of the debt and is expected to reduce volatility in the income statement. The reporting change will be reflected in the upcoming 2025/26 full-year results and is expected to lead to a reduction in underlying net finance expense of approximately £35m and an increase in underlying EPS of around 5p. Underlying operating cost guidance remains unchanged.

In terms of energy hedging, UU is fully hedged for Summer 2026 and over 90% hedged for Winter 2026/27. In addition, the regulatory true-up mechanism introduced for AMP8 provides further protection against any potential future commodity price movements.

Full-year results for 2025/26 will be announced on Thursday 14 May. The company will host an investor site tour in Manchester on 1 July. 

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> Severn Trent on track

Severn Trent has issued the first investor newsletter from its new chief executive, James Jesic.  The February trading statement had confirmed that Severn Trent remains on track financially, operationally and environmentally. The group expects to deliver towards the higher end of its capital guidance range of £1.7-£1.9bn and reiterated its confidence in achieving the highest possible four-star Environmental Performance Assessment for a seventh consecutive year.

The capital delivery director reiterated the company’s confidence, as set out in the trading statement, that it will achieve all PCD milestones and the associated rewards this year, which had a focus on mains renewal. He also explained that his team has been working on “STVerse” — a smart simulation modelling tool that uses AI to help design capital solutions.

Severn Trent Water now has over 150 Tier 1, Tier 2 and Tier 3 supply chain partners. At its half-year results last November, it said it expected to have around 80% of its enhancement schemes contracted by March 2027.

Severn Trent will announce full-year results to the market on Wednesday 20 May.