Pennon Group

PNN · Main Market · Utilities · mcap £1,701m · 333.4p 7 open situations →

Pennon supplies water and wastewater services in the South West of England through South West Water, and water in Surrey and Sussex through SES Water. It earns regulated returns set by Ofwat and is investing heavily in water resources, treatment works and storm overflows.

Timeline · every situation

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2026 Rights issue K8 capital investment programme CEO succession Sale of Pennon Power Pennon Power build-out Wastewater pollution reduction plan Regulatory investigations and prosecutions Lazard Asset Management LLC selling down

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Dilutive fundraise◷ in 5 days

Rights issue

Terms set; subscription period opens 12 October

Led to K8 capital investment programme – Programme enlarged to c.£3.6bn; draft determination out Follows from CEO succession – Plan announced, actions under way Includes Sale of Pennon Power – Proposed; listed in funding plan

On 7 October 2026 Pennon launched a c.£550m fully underwritten rights issue to fund the enlarged AMP8 water investment. Terms are now set: 7 new shares for every 15 held at 250p, a 35.5% discount to TERP. It comes with a rebased dividend; gearing stays within policy.

Size: approximately £550 million; 220,257,997 new shares, fully underwritten by Barclays and Morgan Stanley
Use of money: Deliver the strategic plan and invest in additional growth through Ofwat's cost change process to March 2030
Dividend: FY2026/27 total c.£125m vs £138m; DPS around 18p, c.30% underlying cut
Gearing: Regulated water businesses no more than 65% of RCV; Group unlikely to exceed approximately 70%
Terms: price and discount not in this announcement; see separate announcement and IOC
Price: 250 pence per new share; 7 new for every 15 existing

Next: Results of the rights issue announced · 27 Oct 2026

7 Oct 2026 Terms set; subscription period opens 12 October
7 Oct 2026 Launched, fully underwritten

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Transformational contract / build-out◷ in 54 days

K8 capital investment programme

Programme enlarged to c.£3.6bn; draft determination out

Follows from Rights issue – Terms set; subscription period opens 12 October Includes Pennon Power build-out – Fife and Aberdeenshire energised, generating revenue

The K8/AMP8 programme is enlarged to about £3.6bn, around £1bn above the original plan, to lift asset health. The rights issue now funds it. Ofwat provisionally allowed £230m of cost change; the company targets £400m additional RCV through the cost change process, with RCV growth over 40%.

AMP8 capex: approximately £3.6 billion, around £1 billion more than original plan
Ofwat draft: £230 million nominal provisionally allowed (£190 million in 2022/23 prices)
Further investment: around £170 million through 2027 and 2028 cost change processes, subject to Ofwat approval
RCV target: over 40% growth across AMP8, up from 34%
Next milestone: Ofwat final determination expected by not later than 15 December 2026
Size: approximately £3.6 billion over AMP8, around £1 billion more than original plan

Next: Ofwat final determination on 2026 cost change · 15 Dec 2026

7 Oct 2026 Programme enlarged to c.£3.6bn; draft determination out
7 Oct 2026 Programme enlarged to c.£3.6bn over AMP8
10 Jun 2026 Year 1 done: £643.6m capex, mobilising
10 Mar 2026 Year 1 deliverables on track; efficiencies emerging

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New CEO / reset

CEO succession

Plan announced, actions under way

After a review since joining as CEO in April 2026, Keith Haslett sets out an operational reset on five pillars. Actions already under way include a new Chief Asset Officer and Chief People Officer, centralised asset management and insourced leakage technicians. It is paired with higher investment and a rebased dividend.

Pillars: people and culture, operational excellence, asset management and reliability, environmental programme, customer transformation
Actions under way: new Chief Asset Officer and Chief People Officer, centralised asset management, insourcing of leakage technicians
Who: Keith Haslett, CEO since 1 April 2026

7 Oct 2026 Plan announced, actions under way
10 Jun 2026 Keith Haslett CEO since 1 April 2026
10 Mar 2026 Successor start date confirmed
9 Dec 2025 Interim Executive Chair from 1 January 2026

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Disposal of a part (break-up)

Sale of Pennon Power

Proposed; listed in funding plan

Part of Rights issue – Terms set; subscription period opens 12 October

Pennon proposes to sell Pennon Power as a strand of the revised funding plan, alongside the rights issue, rebased dividend and reinvested efficiencies. The announcement gives no price or buyer; the dossier shows about £25m of proceeds reinvested and the rest cutting Group debt.

Business sold: Pennon Power
Use of money: About £25m reinvested in behind-the-meter renewables; remainder reduces Group debt
Price: Not stated
Buyer: Not stated