Pennon shares plunge 20% as Jefferies flags equity raise and dividend cut

What Brokers Say Utilities Written by: Ephrem Joseph 03:30 Wed 07 Oct 2026 --> Disclaimer No investment advice About this content Editorial Standards & Policies Share article About this content × About Ephrem Joseph Ephrem began his journalistic journey at Proactive in June 2021. With a strong academic background in Information Technology, his expertise particularly lies in the field of Cyber Security, Management Information Systems and Computer Forensics. Before joining Proactive, Ephrem worked as a researcher and lecturer at a number of leading universities, including the University of Portsmouth's Institute of Criminal Justice Studies, the University of Winchester’s Institute of Policing, and Jain... Read more About the publisher Proactive financial news and online broadcast teams provide fast, accessible, informative and actionable business and finance news content to a global investment audience. All our content is produced independently by our experienced and qualified teams of news journalists. Proactive news team spans the world’s key finance and investing hubs with bureaus and studios in London, New York, Toronto, Vancouver, Sydney and Perth. We are experts in medium and small-cap markets, we also keep our community up to date with blue-chip companies, commodities and broader investment stories. This is content that excites and engages motivated private investors. The team delivers news and unique insights across the market including but not confined to: biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto and emerging digital and EV technologies. Use of technology Proactive has always been a forward looking and enthusiastic technology adopter. Our human content creators are equipped with many decades of valuable expertise and experience. The team also has access to and use technologies to assist and enhance workflows. Proactive will on occasion use automation and software tools, including generative AI. Nevertheless, all content published by Proactive is edited and authored by humans, in line with best practice in regard to content production and search engine optimisation. Pennon Group PLC ( LSE:PNN OTC:PEGRY ) View Price & Profile Pennon shares plunge 20% as Jefferies flags equity raise and dividend cut Published: 03:30 07 Oct 2026 EDT Pennon Group PLC (LSE:PNN, OTC:PEGRY) shares fell as much as 20.4% to around 360p after the water utility launched a £550 million rights issue and cut its dividend, with Jefferies describing the measures as a significant balance sheet reset. Jefferies retained its 'hold' rating and 500p price target, saying the package strengthens Pennon’s finances and provides funding for accelerated investment but comes at the cost of a sizeable equity raise and another dividend reduction. The rights issue will offer seven new shares for every 15 existing shares at 250p each, a 35.5% discount to the theoretical ex-rights price. Pennon plans to increase investment across its regulated water businesses to around £3.6 billion during the current regulatory period, approximately £1 billion above its original plan, targeting regulated capital value growth of more than 40%. The company will also rebase its annual dividend to approximately £125 million from £138 million, implying a dividend of around 18p per share and an underlying reduction of roughly 30%. Jefferies said successful delivery still depends on execution of Pennon’s operational turnaround and regulatory approval for additional investment. The wider funding plan includes the proposed sale of Pennon Power, with proceeds largely intended to reduce debt, while regulated business gearing is targeted at no more than 65%. Continue reading