Pennon Group Posts £72.7M Loss After Parasite Scandal, Targets FY26 Profit

Pennon Group, the British water utility company owning South West Water, reported a statutory pre-tax loss of £72.7 million for the fiscal year ending March 31, 2025, significantly up from a £9.1 million loss the prior year, mainly due to increased capital investment, restructuring costs, and expenses related to a water quality incident involving cryptosporidium in Brixham. Underlying loss before tax was £35.1 million, a sharp decline from the previous year's profit, with revenue rising 15% to £1.048 billion, supported by contributions from SES Water. The company faced substantial costs totaling around £37.6 million from the Brixham water quality issue and restructuring, alongside a net ODI penalty of £25 million. Despite the losses, Pennon declared a dividend increase aligned with inflation and maintained a strong balance sheet after a successful rights issue, while setting a record £3.2 billion investment plan through 2030 to improve services, including building reservoirs and reducing storm overflows. CEO Susan Davy emphasized the company’s focus on balancing customer service improvements with long-term investment, acknowledging the tough decision to raise water bills in 2025/26 for the first time in over a decade, with two-thirds of investments funded by investors and debt providers. The firm targets a return to profitability in the next fiscal year and expects revenue growth in 2025-26, reflecting its commitment to meeting regulatory obligations and addressing rising customer expectations.