UK&I Daily Focus: Thursday, 11th June 2026

Research evidence excerpt

UK&I Daily Focus: Thursday, 11th June 2026

Deutsche Bank

Research

Europe Strategy Date

11 June 2026

UK&I Daily Focus Periodical

Thursday, 11th June 2026

Jonathan Jayarajan

LEADING STORIES Associate Director Equity Research - EMEA

PENNON GROUP (PNN.L) - Now a real turnaround story: TP cut to 550p; retain Products

Buy +44-20-754-76037

James Brand: Tgt 620p to 550p. Last Close 498.80p, Buy. Pennon presented Andy Chu, FCA

2025/26 results, with a good impression from new CEO Keith Haslett. Mr Haslett Deputy Head of EMEA Equity Research

emphasised his desire to improve operational performance and his track record in +44-20-754-11360

doing this in past roles. Pennon reported EPS in line with DB and 4% ahead of the

company-compiled consensus. It also notionally met its return guidance for the

year, at a 6.7% real return at Ofwat's gearing assumption (target c.7%). However,

we feel these headline metrics mask a substantially worse performance than

expected, particularly on operational incentives (ODIs). We estimate ODIs were

£58m in penalty in nominal terms, much higher than expected, with scope for

another large penalty in 2026/27.

Figure 1: Table of Contents

XPS PENSIONS GROUP PLC (XPS.L) - Significant opportunities

Leading Stories Page 01

Steve Woolf: Tgt 485p. Last Close 309.50p, Buy. XPS’ trading update (21st April) Target Price Change Page 02

indicated FY results in line with expectations. Group revenues increased by 13% Company Updates Page 03

YoY on a reported basis including organic growth of 7%. Excluding non-recurrent Strategy / Economics Page 04

McCloud project activity in the prior year revenue growth was 18% with organic Source : Deutsche Bank

growth of 12% a fourth year of double-digit organic growth. The performance