South West Water & SES Water Final Determinations

Pennon Group plc

PR24 Final Determinations for South West Water and Sutton and East Surrey Water 

Ofwat has this morning published its PR24 Final Determination in respect of the K8 period (2025 - 2030) for the water businesses within the Pennon Group; South West Water (SWW) and Sutton and East Surrey (SES).

Ofwat continues to recognise the 'outstanding' nature of South West Water's original business plan through a 30 bps uplift to the cost of capital (subject to meeting certain targets over the forthcoming period), whilst SES benefits from a 5bps uplift for a 'good' plan.

The headlines of the Final Determination are:

·    A sector wide cost of capital for the sector of 4.03% on a post-tax real basis;

·    Totex[1] allowances of £4.5bn and £0.4bn for SWW and SES respectively; and

·    Revenues¹ of £4.4bn and £0.4bn for SWW and SES respectively over the five year period.

We are reviewing the detailed documentation which forms the Final Determinations, including the framework for risk and return, and have until mid February 2025 to respond. We will be hosting a Capital Markets Event on 25^th February 2025.

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