Pennon Group Plc

Good morning, everyone. I'm Susan Davy, CEO of Pennon Group and I'm joined by Laura Flowerdew, our CFO.

We're here today in our incident room in Devon. Laura and I are pleased to take you through the results and highlights of Pennon's 2024-'25 half year and we look forward to answering any questions at the Q&A session at 8:45 this morning.

It's been a very busy half year operationally and as we rightsize for our new business plan for K8. I can't reflect on this half year without talking about the incident in Brixham.

For 8 weeks in the summer, we worked tirelessly to return safe, clean drinking water for the people and businesses in and around in Devon. Over 800 brilliant colleagues and supply chain partners supported customers as we flushed 30 kilometers of the network 27x and installed UV and filtration equipment to ensure the supply could be restored as quickly and as safely as possible.

I'd really like to thank customers for their incredible patience but also their kindness to colleagues who were working on the ground all hours. Alongside the Brixham event, colleagues have been focused on tackling pollutions and the issue of storm overflows.

With rain fall over 15% higher than the high base of 2023 and continuing severe weather fronts, weather is never an excuse but it is a context. Beneath the headline numbers, we are making progress.

I want to start by saying the fundamentals for the business are robust. We were pleased to receive clearance from the CMA in June for our acquisition of Sutton and East Surrey.

Integration is underway alongside our group-wide rightsizing and reshaping as we head into the new regulatory delivery period. We're reshaping the group with 4 clear business lines aligned to our 4 strategic priorities.

Through rightsizing, we are focused on having more of our colleagues on the front line. And with these changes, we'll have increased frontline teams by 35% over this 5-year regulatory period, K7, a really good position to be in as we head into K8.

We have set our plan to invest to improve outcomes in K7, whether it improves the water resource positioning following the drought or getting ahead with storm overflow investment with WaterFit program. We have invested GBP 300 million in the asset base this half year, broadly consistent with the run rate from the end of 2023-'24 and aligned with the soon-to-be K8 run rate for investment.

The solid operational performance across all parts of the group, whether you are a South West Water, Bristol Water or Sutton and East Surrey customer was recognized in Ofwat Water Company Performance Report issued last month in October. Having received outstanding good assessments for our South West Water and Sutton and East Surrey respective business plans, we are well positioned to deliver our plan for K8 in another period of significant growth.

As we're closing the K7 regulatory period, I've been reflecting on it being a significant period of change for the Pennon Group. Our agility in delivering for all stakeholders has been a constant.

Following the sale of Viridor in 2020 and as part of a highly disciplined strategic review, we responsibly deployed capital, positioning the group sustainably by minimizing liabilities. We've invested in the U.K.

water with the acquisition of Bristol and Sutton and East Surrey at a total value of GBP 0.6 billion and we have recognized shareholder support through our K7 dividend policy. We've made a record investment in the asset base of GBP 1.8 billion as we focus on things that matter most to customers, which alongside our acquisitive growth strategy results in RCV growth of 75%.

We're also expanding our nonregulated business with our 3 business-to-business retailers, now having a combined market share of around 15% and our investments in Pennon Power are on track. Customers have benefited through our innovative first-of-its-kind WaterShare+ scheme.

Launched in 2020, this gives customers a stake and a say in our business and they also have a share in the financial benefits. Alongside this, we have delivered solid relative sector performance with around 70% of ODIs met over the period.

We are focused on supporting those customers keeping bills as low as possible through drive efficiency and providing tangible support to those who need it most, achieving 100% affordability for the first time this year. With managing directors in place for water services, wastewater services, Pennon Power and retail services, we are reshaping the group aligned to the new model and ensuring we have the right resources and capabilities on the front line and streamlined corporate functions.

Supporting this, our supply chain partnership, Amplify has already been stood up and delivering on over 1,000 schemes, including GBP 75 million of accelerated investment to kickstart our plan to reduce bills from storm overflows. Our 4 strategic priorities are not new.

They are a constant and you have heard me consistently talk about them. They act as a drumbeat internally for our 4,000 colleagues and supply chain partners, ensuring we can deliver on our commitments externally and in delivering the things that matter most to customers.

Our customer and community roadshows this year have been a personal highlight and we've been able to reconfirm our priorities by discussing those with customers. We're listening, whether from Bristol to Bournemouth and across Devon, Cornwall, the Isles of Scilly and more recently, Sutton and East Surrey, in investing to protect water quality and enhance resilience.

We have broken the drought cycle for Devon and Cornwall well ahead of plan. In testing storm overflows, our beaches and eradicating pollutions, we are making progress through sustainable reductions and making sure that these are made.

We're working to invest in renewable energy, derisking the energy requirements of the water business and building a portfolio that has returns in excess of the regulated water business for the capital allocated. At the same time, we continue to successfully support customers with affordability pinch points, a key asset that has been to manage customer bills to be lower than they were 10 years ago as we plan to eradicate water poverty.

The financial results for the 2024-'25 half year include the first full 6 months of Sutton and East Surrey. While it helps in understanding the results, we will refer to like-for-like comparisons.

First, revenue. Our successful water demand customer initiatives, helping customers to use less and save more has meant that on a like-for-like basis across the wholesale water business, we've seen lower revenues.

Regulatory revenue mechanisms are in place to protect future recovery and Laura will walk through the financial position. Second, the cost base.

We are on track to deliver GBP 55 million of cumulative annualized efficiency savings in 2024-'25 as we reshape the group and integrate SES towards our targeted annualized savings of GBP 86 million in K8. This is an important base from which to deliver the K8 business plans.

Third, having ramped expenditure during K7, we are delivering at the required K8 run rate and the supply chain alliance, Amplify, are in place. Fourth, our return on regulated equity for the water businesses is relatively strong at 10.8% on a nominal actual balance sheet basis and 6% on a real notional water share basis.

Fifth, we are delivering for investors as well as customers with robust relative performance on common ODIs with overall cumulative ODI performance at 70%. And finally, we have retained and grown our profitable sector-leading business-to-business retailers, Pennon Water Services and Water Group business.

They both continue to deliver excellent customer service and drive market share, doubling PBT against H1 2023-'24. And we have plans to consolidate SES business retailer into the group.

Underpinning all activities is a robust funding position with Pennon Group gearing at 68% and total Water Group RCV gearing at 65%. With good liquidity, we maintain the agility to deliver on our strategy in U.K.

water and are well positioned for a sustainable future. And with that, I will hand over to Laura.

Thank you, Susan. I'm Laura and I'm pleased to be presenting my first set of results as CFO of Pennon, having taken on the role in July.

Overall, we've delivered a resilient set of financial results for the first half of 2024-'25, in line with the expectations we set out in our trading statement on the 26th of September. Headline EBITDA was GBP 164 million versus GBP 169 million in the previous period, with the contribution from SES partly offsetting the performance in South West Water, which was impacted by lower revenues from lower demand that Susan has talked about.

Excluding SES, underlying EBITDA was down from GBP 168.5 million to GBP 150.2 million. South West Water's capital expenditure was a little over GBP 300 million as we continue to invest in improvements across our regions and our networks, as well as ensuring we are set up to deliver on the investment program and improved service targets required for K8.

Total group CapEx of GBP 332 million reflects the inclusion of SES and Pennon Power. Shadow RCV across our water business is benefiting from growth of 45% over K7 in South West Water, higher than anticipated from PR14 due to accelerated investments along with regulatory true-ups and inflationary impacts with group acquisitions driving 30% uplift, resulting in an overall increase in group RCV of around 75% over K7.

As we have invested over the K7 period through WaterFit, accelerated investments, green recovery and so on, we are seeing the impact coming through the income statement of increased financing charges and depreciation. While this is not reflected in RCV through PR19, this will be trued up on the 31st of March through the regulatory adjustments when the revenue impact will also be trued up for the K7 shortfall as part of the K8 reset, broadly equal to GBP 17 million of income statement uplift seen in the Draft Determination.

Based on net debt at September, Water Group gearing, including South West, Bristol and now SES Water was 65%. South West Water's gearing, excluding SES, was 64%, both within our K7 policy.

Return on regulated equity stands at 6% real for the K7 period to date and reflects strong financing and totex performance, partially offset by reducing inflation and higher expenditure over the past 6 months. On a notional actual balance sheet basis, RORE stands at around 10.8%.

In line with Pennon's 2020 to 2025 dividend policy for growth of CPIH+2%, the Board has declared an interim dividend of 14.69p per share for the half year ending 30th September 2024. On a like-for-like basis, excluding SES, underlying group revenue was broadly flat at GBP 450.6 million with lower customer demand in South West Water more than offsetting the benefit of tariff increases.

Whilst impacting the current year, the regulatory pricing mechanisms will ensure revenues are fully recovered over time. On a group basis, statutory and underlying revenue was up 17.5% to GBP 527.2 million, benefiting from the acquisition of SES and growth in Pennon Water Services.

Like-for-like operating costs in the water business increased by 5%, reflecting inflationary pressures, continued high power costs and costs associated with the implementation of a new customer billing system in South West Water. These were partially offset by efficiencies from our continued transformational and integration programs.

Group operating costs increased 29.8% to GBP 363.7 million, resulting from the full 6-month consolidation of SES. Higher costs in Pennon Water Services, reflecting higher wholesale supply costs consequent on the higher reported revenue also resulted in increased group costs.

Depreciation and amortization increased year-on-year to GBP 94 million, mainly as a result of the inclusion of SES alongside an increase in South West Water due to the capital investment program. This resulted in underlying operating profit reducing to GBP 69.5 million from GBP 85.9 million in the prior year.

Like-for-like financing costs were broadly flat year-on-year as lower inflation on index-linked debt benefits interest rates, offset by the impact of increased borrowing from the capital investment program. Group interest charges increased to GBP 88.6 million, primarily due to the inclusion of GBP 9.7 million of financing charges in SES.

Our focus is now on reshaping and restructuring our operations for efficient delivery ahead of K8. We will recognize GBP 16 million of restructuring costs as nonunderlying charges across the year to enable a more streamlined delivery into the final quarter of this year and into K8.

GBP 3.7 million of these costs were recognized in the first 6 months of the year with an expectation of GBP 16 million of nonunderlying costs for the full year. The Brixham incident resulted in non-underlying costs of GBP 16.3 million recognized in the first half of the year as a result of costs to support customers with bottled water deliveries, customer compensation and work to clean and restore the network.

Finally, on a like-for-like basis, the group reported a statutory loss before tax of GBP 34 million compared with a profit before tax of GBP 3.2 million in H1 2023-'24. Let's drill down a bit more into revenue.

Within South West Water, we are seeing the impact of our successful Water is Precious campaign, where we offer customers practical support on how to use water efficiently both inside and outside the home. Reduced demand impacted revenue by GBP 19 million, which more than offset the 3% benefit from tariff increases and resulted in a 2% reduction in South West Water revenue in the first half of the year.

Pennon Water Services revenue increased by GBP 8.7 million, driven by inflationary factors and new contract wins in the period. These 2 factors, led to revenue, excluding SES, being broadly flat year-on-year at GBP 451 million.

SES contributed GBP 76.6 million of revenue in the period, largely comprising the regulated water business and the nonhousehold retail business, such that headline revenue for the group was up 17.5%. The movements in EBITDA broadly reflect the revenue impact in South West Water of lower demand.

Cost pressures from noncommodity power costs, wage inflation of around 4% and the new digital customer service platform have been partially offset by lower commodity power costs and efficiency savings with around 10% overall reduction in South West Water EBITDA. Pennon Water Services EBITDA was up 19% to GBP 3.7 million.

And with the contribution from SES, headline EBITDA was GBP 163.5 million. Since the completion of the merger of Bristol Water, we've been delivering on our proven acquisition and integration blueprint.

We are on track to deliver a run rate of around GBP 20 million of annualized synergies by the end of the financial year with GBP 18.5 million achieved by half 1 2024-'25. The reshaping and restructuring activities we have initiated are vital for ensuring we have the right resources in the right places focused on delivering our commitments for now and throughout K8.

These activities are expected to deliver annualized cost savings of around GBP 55 million when complete. We have over GBP 35 million annualized savings in progress through both our operational initiatives to improve efficiency as well as our group-wide restructuring program.

GBP 16 million of costs are expected across the full year related to these initiatives. In addition, we received clearance from the CMA in June 2024 for our acquisition of SES.

We are aligning the SES businesses to the group's structure and are on target to deliver around GBP 11 million of annualized integration savings with GBP 2 million achieved in H1 2024-'25. On a like-for-like basis, group's capital expenditure in the first half was GBP 319.8 million.

And including SES, total CapEx was GBP 331.8 million, up GBP 65.5 million or 24.6%, driven by a GBP 71.6 million increase in South West Water investments and GBP 12 million spend in SES. Investment reflects the ongoing focus on transitioning to K8 as well as delivering the final regulatory commitments for K7.

With more resilient water resources, excellent progress on our state-of-the-art water treatment works in Bournemouth and 100% water quality at bathing waters, our investment is delivering benefits as we close out the regulatory period. And coupled with our strategy of consolidation in the U.K.

water sector has resulted in RCV growth of 75% over K7. SES capital expenditure of GBP 12 million largely comprises GBP 9.3 million spend in respect of the rollout of SES Water's metering program.

Investment in Pennon Power of GBP 13.4 million reflects the start of construction at 2 sites with a significant ramp-up in activity anticipated in the second half of the year as the build program accelerates. The around GBP 32 million in the prior period was largely related to the cost of purchasing the sites, a total of around GBP 40 million in '23-'24.

Group debt at 30 September 2024 was GBP 4.4 billion, with over GBP 675 million of liquidity available to the group. We were pleased to secure 2 strong investment-grade credit ratings in the period with a Baa1 rating from Moody's and BBB+ from Fitch.

These ratings enabled us to launch our EMTN program alongside our inaugural GBP 400 million bond issuance in August 2024. Alongside a U.S.

private placement, we have secured GBP 550 million in new borrowings in the period, building on our diversified debt portfolio and standing us in good stead to ensure ongoing funding for our continued high level of capital investments across the K8 period. We will continue to target efficient funding streams with South West Water's effective interest rate remaining relatively low for the sector at 5.3% and an average maturity of 14 years.

We have a diversified mix of fixed, floating and index-linked debt and use interest rate swaps to manage volatility and to align with the regulatory cost of debt allowances over the period. In preparation for K8, over GBP 500 million of swaps have been put in place to fix our floating rate instruments.

Given these developments in the half year, we are well placed to secure funding and maintain a diversified portfolio for the future. Looking forward, we will, of course, see the full year results of the SES acquisition in the outturn position.

The outlook for South West Water revenue sees a continuation of lower customer demand, offsetting tariff increases and new customer numbers, resulting in a balanced H1/H2 split and broadly flat year-on-year. Continued elevated noncommodity power costs and the cost of the new digital customer services platform in South West Water are expected to be partially offset by increased efficiency savings realized with effect from the final quarter of '24-'25, meaning costs in South West Water are higher year-on-year and will continue to impact on profitability.

We anticipate group capital expenditure for the full year to continue at the H1 2024-'25 run rate. This reflects early work in preparation for K8, including GBP 75 million accelerated investment in storm overflows agreed with Ofwat as well as investment in responses to operational incidents such as at [indiscernible] and Brixham, a peak year for Pennon Power development costs and the full year impact of SES investment.

The impact of our ongoing capital program on our debt position, in addition to SES' financing charges is expected to increase group net finance costs for the full year with a step-up in H2. The water business' RCV for 2024-'25 is expected to increase, reflecting continued high capital expenditure from additional and accelerated investments, as well as the finalization of the K7 period.

Thank you for your time. I will now hand you back to Susan.

Thank you, Laura. I'd now like to explain where we are against our 4 priorities.

The top priority for our customers is safe, clean drinking water across Bristol, Bournemouth, Devon, Cornwall, the Isles of Scilly and now Sutton and East Surrey. We have been investing to protect water quality and enhance resilience and we have broken the drought cycle for Devon and Cornwall well ahead of plan.

This has been a monumental undertaking with teams across South West Water and our supply chain partners involved. Blackpool Pit has been fully operational since March this year with construction complete at the new treatment works at Rialton.

That means for Cornwall, we have supplemented resources cumulatively since 2022 by 34%, with 4% extra delivery in this half year, having delivered a 30% uplift to Devon last year. With overall resource levels now at 80%, we achieved 100% supply-demand balance index for the first time in the 2023 EPA, turning that measure to green.

There are always 2 sides to the coin and reducing demand is key for future resilience. Our sector-leading demand reduction schemes are focused on supporting customers to use less and save money.

Leading with our Water is Precious, water efficiency campaign, we've been targeting both residents and visitors. In Cornwall, residents were given GBP 10 off their bills for delivering a 5% reduction in use.

We are also trialing several firsts for the region with progressive tariff trials, seasonal and [ rising block ] and early results are showing demand reductions for customers from between 2% and 9%. Whilst we are focused on protecting water resources, safe, clean drinking water remains customers' #1 priority and we continue to make good progress in rolling out our successful quality first culture and training program to Bristol with plans to extend it to Sutton and East Surrey.

The incident earlier in the year in Brixham highlights just how important that it is to all customers that they can have confidence in their water supply. We continue to work with the drinking water inspector on the lessons learned from that incident.

Our underlying water quality is improving with SES the top performer in the industry and South West Water in upper quartile for water and sewage companies, we are confident we can do more as we share best practice. For Bournemouth customers, we continue to make good progress using state-of-the-art off-site build techniques for our new water treatment works at Alderney and Knapp Mill, which will supply 85% of the Bournemouth population.

In Devon and Cornwall, we are on track to finalize improvements at [indiscernible], [ Sinclair ], [indiscernible] with tactical investments across Bristol ahead of significant investment in K8, so an improvement from last year's performance. Tackling storm overflows is a priority and there's no doubt we've been challenged with the highest rainfall in the third wettest October 2023 to August 2024, since records began.

I said earlier, this is not an excuse but it is there for context. Groundwater levels have remained exceptionally high with a corresponding increase in the headline number of storm overflow spills.

We are investing to make sure we can alleviate and eliminate these storm overflows and bring down the number of spills when we have higher rainfall. Our investments are working, having resolved 2/3 of our highest spills from 2023 and prevented round about 12,500 spills through 350 interventions.

Importantly, we have maintained our sector-leading performance for internal sewer flooding and are reducing our external sewer flooding incidents remain in upper quartile for our performance, ensuring homes and businesses are protected. Our water investments, which we started in 2022 have been focused on reducing the flows into our network with 57 kilometers of sewers relined to reduce infiltration and we've completed over 12 hectares of sewer separation.

We've increased storage at 60 sites, nearly tripling our storage capacity to capture flows that otherwise would have been spilled, retain them for treatment after the storm event. And we've increased treatment capacity at 15 wastewater treatment works.

We've also been maximizing existing capacity at 90 sites through interventions such as increasing warehouse and flow optimization. With 860 miles of coastline across our region, we are rightly focused on improving our bathing beaches.

And on a like-for-like basis, we are maintaining 100% bathing water quality standards for the fourth year in a row. We've had 6 new designations made in 2024 and we are working to support catchment schemes to ensure that designations meet the highest standards.

Three have already met standards and the remaining 3 are where our assets have limited impact. So we are working to understand the other upstream sources to support improvements.

We continue to focus on reducing the number of spills at bathing waters. And despite the increased rainfall we've seen, the headline spill numbers have reduced by 12% during the bathing season.

We also recognize though there is still much more to do on eliminating pollutions and spills. We have had some of the lowest absolute levels of serious pollutions across the sector and we've not had a Category 1 incident since 2018.

We remain focused on driving improvements to overall pollution levels for Devon and Cornwall. Reducing levels of Category 3 pollutions remains a top priority for everyone who works in wastewater services.

Historically, the majority of pollution has occurred in the network and the work we have done here is working with a 40% reduction in incidents from these assets over K7. We've achieved this by investing in 12,000 [indiscernible] monitors, supporting both predictive and proactive interventions as well as continuing to invest in rising main replacements and sewer upgrades alongside supercharging maintenance and targeting cleansing activities.

We've seen improvement to underlying performance at our treatment works and our focus has now turned to our pumping stations where resilience to the weather and increased flows has been challenging. We are responding with improved site [indiscernible] and enhanced cleansing as well as tackling power resilience.

We're also focused on upskilling teams so we are better equipped to mitigate and react to pollution events. We're improving river water quality at 37 sites with 80% reduction in phosphorus and have improved the reasons for not achieving good ecological status over K7 from 19% to 12%.

Our award-winning catchment management program is leading the way for biodiversity gains as well as continuing to help the way others manage their land, improve water quality, biodiversity and have climate resilience. The activities range from building ponds, improving farm tracks, as well as storage, as well as planting trees and buffer strips to catch and filter water.

With our commitment to net zero, our investment in Pennon Power has continued with nearly half of our targeted capacity already under construction at 2 sites [indiscernible] and we have appointed preferred partners at our 2 further sites. Returns for these assets post energization on an unlevered basis are between 7% and 9% and on a levered basis are between 11% and 15%.

In tackling affordability, it is about doing 2 things, keeping bills as low as possible and supporting those who are vulnerable. By focusing on efficiency, we have kept bills below inflation, with the bill in South West lower now than it was 10 years ago, with the average bill now less than GBP 1.50 a day.

And given you can't choose your water provider if you're a household, we believe you should have a say, which is why we plan to grow our unique WaterShare+ scheme as well as extend this to Sutton and East Surrey customers for the first time. Whilst bills are lower, we are supporting more customers than ever before with over 140,000 benefiting from our support tariffs across the group.

By unlocking over GBP 110 million in financial support, we have increased affordability to 100% of customers in South West and Bristol, on track to meet our pledge of having 0 customers in water poverty by 2025 and 5 years ahead of the rest of the sector. Key to building trust is reducing complaints.

And with Bristol recognized as a top performer for customer service, we see opportunities for improving across the group with South West reducing billing complaints by 18% last year and opportunity to share best practice with SES to improve customer service. We continue to support customers to use less and save more through our progressive charges trials.

Against our customer commitments, about 70% of our ODIs are ahead or on track. And as outlined in Ofwat's Water Company performance report, we are delivering good relative performance in the sector.

We are industry-leading or upper quartile in several measures, including internal sewer flooding and some unplanned outages for South West Water, quality and supply interruptions for Sutton and East Surrey and customer service in Bristol. As we enter the next regulatory period, Ofwat's 2023-'24 report indicate that companies in the group are in a relatively good position in respect to the common ODIs.

And that's important because these are the measures that are retained for the new K8 period. On our nonregulated retailers, which now include SES Business Water, we continue to build on their strong performance with combined market share of 15% and a strong EBITDA.

Pennon Water Services and Water Group business have an outstanding focus on customer service, with Trustpilot scores of 4.8 and 5, respectively. Following the SES acquisition, which included other nonregulated businesses, we see opportunities for consolidation, efficiencies and sharing of best practice.

We are energized by South West Water's outstanding status for our business plan and the good status for SES' plan recognized by Ofwat at the Draft Determination. The Draft Determination provides a floor for RCV growth of 30% for the group.

The cost of capital is protected against reduction between [indiscernible] and FD with a 30 basis points upside for South West Water if we meet full criteria and a 5 basis point upside for SES. One of the criteria is to achieve EPA 4-star status by 2028.

We had one of the lowest levels of totex reductions of any water and sewage company in the sector at around about 7%, reflecting the efficient business plan we submitted. And importantly, we received all of the funding for our storm workflow plans, allowing us to bring forward GBP 75 million of early start transition spend, which will be included in our March 2025 RCV with returns applied over K8.

Given our outstanding status, our response to the Draft Determination has covered 4 areas of representation, many of which were consistent across the sector, ensuring a balance of risk and return with targets that are stretching but achievable levels that show upper quartile performance in one area can substantially offset underperformance in another and a return to expenditure levels and RCV we now set out in the plan. And lastly, ensuring our investments are balanced both regionally, nationally and between water and wastewater.

The timetable is set to deliver the final termination on the 19th of December. And we look forward to holding a Capital Markets Day on the 25th of February to take everybody through our delivery plans.

I've talked a lot today about how we are reshaping the group. We couldn't achieve any of our plans without the ongoing support of our teams and the support of our wider supply chain partners.

When I reflect on Brixham, they say you see the best of people in the most challenging of times. We saw that in bucket loads from all our colleagues as they gave up weekends and evenings to help customers in addition to doing their day jobs.

From network technicians to engineers, water quality scientists, customer service and comms teams and contractors, over 800 colleagues came together as one team. In manning 3 bottle water stations, 7 days a week, teams also hand delivered over 390,000 bottles of water direct to customers, with customers receiving over 1.4 million bottles of water in total.

Our customer services teams held 14 customer events in and around Brixham over 8 weeks and our mobile van visited communities over 40 times to be on hand to help. Our communication teams held briefings with the media twice a day throughout and we were -- we are now working with The English Riviera BID Company to match fund their budgets and support a legacy project to support tourism.

In reshaping the group, we are putting more resources on the front line than ever before. We are the only water company to being recognized as a top 100 employer for apprenticeships for the second year running ahead of plan to offer 1,000 apprenticeships and graduate roles by 2030.

We've delivered over 4,000 courses at our growing number of internal training facilities. And in November, we were recognized for our earn and learn approach to development with platinum status awarded to us by The 5% Club, who share an ambition to shape the future of workforce development and national prosperity.

We continue to promote social mobility, giving young people the opportunity to dive into their local water company, so very important in a region where deep-seated social mobility issues exist and where the Southwest ranks the third worst for upward occupational mobility. I'd like to thank everyone in the group for what they have delivered and for what we are about to do as we look ahead to K8.

Supporting our ambitions are our supply chain partnership, Amplify and that's already been set up and is delivering on over 1,000 schemes. We have a robust financial position with good liquidity, having secured GBP 550 million of funding in this first half year, putting us in a strong position to finance our largest ever investment program to 2030.

In summary, we are reshaping the business to enable us to deliver more for customers. We're focused on closing down K7 with record investment to drive benefits in K8.

We are well positioned as we look ahead to our next business plan and another period of significant growth.