Image description: Aerial image of sewage treatment facility. Image by Photo by Ivan Bandura on Unsplash

UK Pennon group eyeing profitability for 2025-26

South West Water owner Pennon has reported a “strong return to profitability” despite higher costs borne during the summer drought and the UK’s hottest summer on record.

The FTSE 250 water firm said it maintained “resilient” supplies of water despite high levels of demand due to the weather conditions.

It came as the company said it expects earnings to increase by 60% year-on-year, taking into account revenues deferred into the next financial year. Bosses stressed that trading between April 1 and September 25 means the company is on track to meet expectations for the current financial year.

Making “good progress” on sewage treatment

The company said it is also making “good progress” with its £3.2 billion investment plan, which it agreed with regulator Ofwat last year.

Departing boss Susan Davy also told shareholders on Friday that it has “more to do” regarding reducing pollution. In its Water Services division, Pennon reported that pollution incidents halved in the eight months to August 2025, while storm overflow spills dropped nearly 50% year-on-year.

It comes after South West Water agreed to pay £24 million in July after Ofwat found it spilled wastewater in the environment when it should not have done.

Pennon also said it is “progressing” with its search process to find a successor after Ms Davy announced her retirement plans in the summer.

Southwest Water facing legal proceedings

Following the Drinking Water Inspectorate’s investigation into the Cryptosporidiosis outbreak event in the Brixham area in 2024, the FDI announced a court summons has been issued to South West Water Limited for prosecution for potential offences under section 70(1) of the Water Industry Act 1991.

The summons is now listed on 21 November 2025 before Exeter Magistrates’ Court.

The event concerned the detection of Cryptosporidium in the drinking water supply in the South Devon area in May 2024.

Marcus Rink, Chief Inspector of the Drinking Water Inspectorate, has stated:

“The Brixham incident was serious with significant impact on the public and the wider community. Accordingly, I consider it appropriate to pass the matter to the court to consider the evidence in the public interest.”