Welcome to Pennon's strategic update conference call. My name is Alex, and I will be coordinating today's call. If you would like to ask a question during the presentation, please press star followed by one on your telephone keypad. I will now hand it over to Keith Haslett and Laura Flowerdew to begin. Please go ahead. Thanks, Alex, and good morning and welcome everyone to the strategic update today. Having now completed my strategic review over the last six months, I have also now reset the senior team. That team has been part of developing the plan, and importantly, they have bought into delivering it. With the strategic review complete, we are now resetting Pennon and are ready to capture the growth opportunity provided by the reopeners. We have hit the ground running, and we now have a clear path to moving the business forward. We believe we have a compelling investment opportunity ahead of us. Today, we will be presenting our plan to capture it. There will be plenty of time at the end for questions. With that, let me get underway with unpacking what we are doing and what it means for Pennon's next phase. In summary, during the full-year results, I have provided an insight into my initial observations, but after a fundamental strategic review, it is now clear on the pathway required to 2030. The review has carefully considered our strategy and delivery plans for AMP8, based on our projected spend for both CapEx and OpEx, linked to our operational performance commitments. This includes our operating costs and opportunities to become more efficient, as well as additional investments to support delivering regulatory outcomes over the AMP8 period. Capital investment plan reflects changes to reduce delivery and compliance risk, as well as a change in the operating model to ensure successful delivery of our outcomes in an efficient and timely manner for our customers and regulators. We have a clear review on areas of growth and asset health, which has shaped our successful bid for Cost Change 2026 with Ofwat and how we will approach the rest of AMP8 linked to further investments. This is a significant opportunity for Pennon and for our investors, as this approach will now create the ability to reset the trajectory of the business and expedite improvements in our asset base across the remainder of AMP8. It will be supported by a revised funding plan with a GBP 550 million rights issue and a rebased dividend, along with debt through the remainder of AMP8. This plan is built from the ground up, having spent six months visiting our sites, poor assets, call centers, and working with our supply chain partners and undertaking a deep dive into operational performance. I have been very visible in all areas of the business and geographic areas to ensure I understand the different challenges, but more importantly, how I stress test that I have focused on the right priorities in alignment with business needs. The review of the business with my executive team has demonstrated we have some great people willing to go the extra mile. In some areas, we have performed well, but overall, there are large improvements to make due to a lack of leadership and clear direction, a culture with a regular cadence around performance linked to meeting delivery plans for targets, operational grip in a broad range of areas, an effective capital delivery team with the correct resource structure in place. The review has clarified the areas of improvement required across the company that are linked to poor performance, and action plans are developed to resolve now and into the future. I have already hired and put in place key people to strengthen our management team and deliver this. Our new plan, coupled with the Cost Change process addressing asset health, will transform our operational performance going forward alongside the growth agenda. A critical factor in my strategic plan is the role of the Cost Change process, providing an unprecedented level of additional investment to fast-track improvements in asset health. We view this as a critical component of resetting the business, using the opportunity for targeted investment to accelerate improvements in our asset base and on a revised funded basis. The Cost Change process is a key part of our sustainable long-term growth agenda, and we have already secured GBP 230 million in draft determination for this year, and we are targeting a further GBP 170 million of investment across the rest of AMP8. We have also targeted a further GBP 600 million of further investment, as well as supporting our transition plan to AMP9, reinvest in efficiencies from the original AMP8 plan into new projects that will deliver improved outcomes in terms of operational performance and compliance. At the outset of AMP8, we planned to deliver 34% in RCV, but based on our revised plans, including Ofwat's new Cost Change process, we are now targeting at least 40% increase in RCV. I will provide more detail on this additional investment later. The plan looks to reset the business in terms of operations and ways of working, but we have also identified additional investment opportunities, aided by the new Cost Change process that will expedite delivery and support the health and resilience of our asset base. We have therefore also looked to ensure we have a refreshed and revised funding plan that will finance the group through a period of increased growth while maintaining a financially resilient balance sheet. Laura will talk more about this later, but at its heart, it is both self-help through the sale of Pennon Power and the reinvestment of previously targeted efficiencies and new financing through the rights issue and increased debt funding. We are also adjusting the dividend, reflecting the increased growth offered by the plan and ensuring a right-size dividend across the AMP that continues to grow in line with inflation. The rest of today follows that logic, an operational reset that improves performance, targeted investment that drives growth, and a balanced funding package that pays for both. Together, building a stronger, more resilient Pennon. If we move towards the operational reset and move into, I guess, the core element of my strategic update. The reset has five key pillars, and each one answers a specific opportunity the review highlighted. Every action is tied to the ODI and performance outcomes we target. The five pillars focus on, first and foremost, people and culture. Secondly, operational excellence. Third, ensuring we have strong asset management and support asset reliability. Fourth, our environmental program. Last, but by no means least, transforming our service to our customers. So far, there are a number of areas that have been obvious to action quickly, but we are also setting a vision of transformational activity moving forward. In six months, we have established a new target operating model, refreshed the leadership, brought critical roles back in-house, reprioritized the capital plan, and launched Maintenance Excellence. Establishing a clear target operating model in six months is the foundation for clear accountability, ownership on performance, and a building of culture of putting the customer at the heart of everything we do. I will touch on a number of these areas in the rest of the presentation. Technology is a key enabler for better data and modern systems, allowing us to intervene earlier, serve customers at lower cost, and run the business more feasibly. Martin Jones is our Chief Information Officer and is now part of the executive team to help identify and deliver this technology program across AMP8 and the transition into AMP9. We are currently in flight with launching our customer and billing platform now. We have started developing our new planning and scheduling system, and we will upgrade our asset GIS system across the next three years. Further work is underway to review our operational control center to further enhance this technology and applications for delivering our 24/7 ways of working and decision making in water and wastewater operations. Beyond AMP8, the intention is to replace our asset enterprise system and financial systems to promote improved reporting and decision making. In the period of six months, we now have the leadership team in place to deliver the plan with experienced new hires and existing executive leaders in the roles that matter most for performance, assets, people, and water services. Laura, as our CFO, has helped shape the change in leadership and been instrumental with myself and the team in developing the outputs from the strategic review and the revised funding plan, but also playing a large role in driving forward transformational projects that include Project Fusion. Ian Christie, as our new Chief Asset Officer, has been in the role since the start of May. Since starting, Ian has recruited a new leadership team, started to insource our asset delivery team in terms of program managers and cost management roles to ensure we take ownership of our program of deliverables with a lower capital overhead in the long term. Hazel Hendley started as our new Chief People Officer on October 1st. Hazel picks up from a strong start in helping me reshape the business functions and will be instrumental in leading on our cultural transformation program across the business. Ian Cain is a former CEO of SES Water, and with a strong industry background, takes up the interim water services role to help shape improvement plans for key performance areas. That includes leakage and supply interruptions, and currently recruiting for a permanent lead for water services in the coming weeks, with an appointment expected in the autumn. Simon Pugsley is joining as an experienced General Counsel and Company Secretary who previously worked at Pennon and has significant U.K. water experience. He will start in the next few months. Richard Price continues to lead on the operational delivery of wastewater services and the pollution incident reduction plan. Paul Ringham is now Chief Commercial Officer, and I have now consolidated all commercial aspects of the business with Pennon Power commercials, procurements, and our estates areas. Carolyn Cadman is now Chief Environment and Compliance Officer, and I have aligned our water sampling and wastewater compliance functions under Carolyn to enhance our lines of assurance and regulatory reporting requirements. In terms of Chief Customer Officer, I have appointed Ketan Hindocha into the interim role as we complete the recruitment exercise for the permanent role. Ketan has played a big part in the delivery of our Project Fusion and driving customer improvements across the last six months with water and waste functions. Sarah Heald continues in the role of Chief Strategy and Regulatory Affairs Officer, delivering on our requirements for Ofwat Cost Change, PR29 delivery plans, and water reform. Now we have a fully reset executive team, and a number of senior leaders have also been appointed in the past six months to rebuild our asset management team, drive our performance and leakage and lead our capital investment program. Moving into operational best practice, I have been fortunate to work in a number of very credible and strong performing water companies that understand strong operational discipline, efficient ways of working, and more importantly, ownership of performance. The diagnosis of Pennon has been fast-tracked based on my background and understanding of what areas need to be prioritized, along with the support of the team I've been putting in place. The pathway to operational excellence requires strong leadership and desire from our leaders for continuous improvement in performance as a culture. In a short space of time, I have quickly identified a number of themes that have been actioned or linked with transformational projects. Key areas now actioned include refreshed scorecards across the operational areas with monthly reviews, recruitment of industry talent to refresh our leadership and approach, leading performance indicators to enhance our decision making, launched a procurement process to secure our long-term framework partners for our network maintenance. These initial changes have been received well by the teams and demonstrate a new approach focused on ownership and performance. Leakage was one of the first areas to in-source, and similar to other areas in the business, it did not make sense having an outsourced model, which was expensive, lacked ownership, and not delivering the required level of performance. We are insourcing our leakage teams now, which means developing our own people who take pride in delivery, using data to find and fix more leaks at a lower cost. This has started in the southwest, where the leakage gap is largest. This change will also be complemented by new senior leaders to refresh the leakage strategy in terms of our suite of interventions to drive down leakage, and then deliver with enhanced plans. In time, the leakage performance will see improvements when the delivery plans start to deliver on the interventions required. Initial observations were clear that asset management was devolved across the business, lacked direction, identity, and inconsistent processes with an outsourced asset delivery model. The centralization of asset management provides better synergy now to deliver the required outcomes for AMP8 and beyond. The asset strategy and delivery plans are now fully integrated across the asset life cycle from concept stage with asset planning, to delivery of asset investment on the ground, to robust maintenance schedules for improving the reliability of the asset base. Ian has been focused in his first few months on strengthening these functions by recruiting the right senior team in this area and ensuring they provide the required service for our operational functions. The team have been very busy reviewing our asset investment program and reprioritizing the required outcomes to ensure we can maximize benefits linked to our performance commitments. One exciting area is the introduction of a new capability to the asset management team, which is asset reliability. Maintenance Excellence is a framework that provides a detailed insight into our asset base, understanding asset health, and creating a maintenance schedule for our field engineers to service the assets and avoid unplanned failures. This is an initiative that has delivered great outcomes from Ian's past roles. The business has been in a reactive world with a historic approach to replacing assets at the point of failure. A more planned and proactive approach can deliver improved operational and safety performance, improve buy-in from the operational staff, whilst also providing positive impact on asset availability and lowering the risk of asset failures. Chris Bates is our new asset reliability lead and has an in-depth expertise in asset reliability transformation and is already underway with delivering on our Maintenance Excellence program, which is supported by industry experts. Chris will now lay the foundations for shifting our culture from reactive to proactive across all areas of the business, which starts with our mechanical and electrical asset base. The focus will start on the southwest region in order to maximize the largest benefit for reducing asset failures and to ensure we extend the asset life, improve operational performance, and deliver cost efficiencies over the longer term. Our environmental performance is not where it needs to be, and we are now setting a credible target to improve EPA metrics by the end of the AMP8 period. In particular, we need to remain focused on the pollution incident reduction plan, but also demonstrate improvement in treatment compliance, which forms a key part of the EPA performance framework. We have continued our award-winning upstream management and peatland restoration programs to support biodiversity and environmental net gains across our regions. It is clear that to achieve four star status now in 2028 is very difficult based on our current position. There are also ongoing challenges in terms of the evolving metrics in the EPA scorecard, and we know this will provide new challenges that we will need to respond to. As such, our focus will now be on ensuring continuous improvement across AMP8 on the EPA measures, reducing pollutions, improving compliance, and ensuring our assets have as little impact on the environment as possible. Sewer rehabilitation shows how Cost Change funding turns directly into customer and environmental outcomes. We have secured GBP 62 million of additional investment in sewer rehabilitation through the Cost Change process, which will remove excess groundwater entering our networks, reducing flows, and thereby helping to target lower spills, reduce pollutions, and improve sewer flooding, whilst also lowering operating costs to treat less stormwater entering the system. We also recognize a large opportunity exists for improving our performance on customer and retail satisfaction scores. The C-MeX measure is lagging well behind in the South West and SES regions compared with our strong performance in Bristol. Technology is a key enabler for modernizing our systems and improving digital channels for customer interaction. The application of artificial intelligence and the modern systems interacting with our operational technicians and supply chain will focus on ensuring first-time resolution on customer jobs. Moving the systems into a digital approach for our customers will also allow us to communicate more often and more locally with our customers, taking a community-led approach to sharing the work we are doing in local areas and ensuring we are communicating more often and more effectively with our customers. A live example of technology implementation is Project Fusion as a modernized customer and billing platform, which will deliver an enhanced service for our customers and an improved system capability for our own customer and billing teams. We are excited for this to take effect as we see it enabling a step change in customer service. Better for customers through simpler customer journeys and improved channels of choice. Better for colleagues with one system, more accessible information and improved processes. Better for business with streamlined debt management, lower contact volumes, and lower operating costs. The implementation is on track for delivery in the next couple of months, and whilst I am sure it won't go entirely without challenge, we are excited to see the improved outcomes the new system will help deliver. The approach of setting a timeline with clear activities to be delivered and showing progress starts to build momentum and confidence within management and the operational teams, but also with our stakeholders. This slide demonstrates some of the key activities already actioned in my initial six months. Whilst this slide shows a large range of activities both now and into the future, I have a strong leadership team. From a solid track record, I understand how to action operational change and it will be delivered. Based on the operational reset for the business, I will be tracking our progress on a range of activities to align with the improvement plan required on operational performance, particularly in targeted areas. Accelerating delivery on the asset investment program to complement the improvement activities linked to operational excellence. A view of the next steps on the slide is also important in sharing the vision for transformational activities linked to future performance as a management tool with employees. I will come back to update on progress for these areas across AMP8. Moving to our operational performance and following the challenging year we experienced in FY 2026, operational performance has continued to be challenging in FY 2027 due to a number of key metrics underperforming. That includes the forecast that Compliance Risk Index in South West Water will miss the target for year two. Supply interruptions across operational areas. Leakage in South West requires a recovery plan based on the three year rolling average. Pollution measures, and in particular, serious pollution incidents due to Storm Goretti in 2026. Customer and retail measures requiring improvement in South West and SES. It is worth noting that we do have some positive measures that we will continue to strengthen, which includes internal sewer flooding, unplanned interruptions, and biodiversity net gain. For the rest of the AMP8, we will focus on driving forward our improvement plan for interruptions to supply to deliver performance below eight minutes. On leakage, the action plan is to close the gap back to target for both SES and Bristol, but applying most of the focus on the leakage strategy and recovery plan into the South West region. On the wastewater measures, the focus is to drive continuous and steady improvement over the AMP, focusing on pollution and compliance measures, and looking at adapting our plans as greater clarity develops on the new metrics. On the customer and retail measures, the aim for C-MeX is to maintain our strong position for Bristol and drive improvement in delivery in SES and South West, targeting mid-table performance. On BR-MeX, improvement plan to return back to net neutral. On D-MeX, achieve net reward across all areas by 2030. Overall, we are now anticipating that operational recovery will take the remainder of the AMP to be delivered with ODI penalties forecast across the AMP, although reducing by at least half of the current level by 2030. The ongoing penalties now anticipated will impact on our performance in terms of RoRE, both through underperformance in ODI delivery and because we also consider it is now no longer possible to achieve the four measures required to access 30 basis points benefit of an outstanding business plan. Moving to cost change, Ofwat has backed our case for more investment, and we have been allowed GBP 230 million at draft determination and plans for a further GBP 170 million across the rest of AMP8. Clear visibility on the good accelerated growth that then continues through the rest of the AMP period. The scale of the investment will deliver material improvements in our asset base that include enhancing our water quality performance, reduction in pollution spills by removing groundwater infiltration, better resilience and storage capacity for our service reservoirs linked to supply interruptions. The representations have now been submitted on September 24th, and the final determination is expected around December 15th. However, planning is already underway to mobilize these investment areas linked to a number of initiatives with the operational reset. To demonstrate a couple of examples, the cost change process has allowed for our wastewater treatment site at Newquay to now be upgraded in order to cope with a wide range of flows based on seasonal demand, as shown with the very popular Boardmasters music festival. This investment secures our ability to be compliant with our permit into the future. Our asset base also has some very challenging sewers, as shown with [Fowey] that are expensive and challenging to replace due to the extreme location in the marine environment. This is a really good example of cost change allowing investment for an asset in poor condition within a challenging environment and currently very expensive to replace due to location and marine challenges. The strategic review has confirmed divestment of Pennon Power as the right strategic approach in order to focus on behind the meter projects that provide greater resilience, ODI, and efficiency benefits. We will complete the remaining two sites currently under construction by spring 2027. We are taking self-help measures as part of the funding plan, with Pennon Power set to be sold, reducing group debt and focusing the group on the regulated water business. The strategic review has demonstrated a significant opportunity for developing renewable energy assets across our own regulatory asset base. We therefore propose reinvesting GBP 25 million from the Pennon Power disposal to focus on behind the meter opportunities at our high energy sites, closer to the regulated assets, tangible OpEx savings, and a much quicker payback period while supporting delivery of our greenhouse gas performance regulatory commitment. All of these sites are being delivered using our existing Pennon Power team, who have a successful track record in delivery. At that point, I will now hand over to Laura, who will take you through our funding plan and financial guidance. Thank you, Keith. Keith has talked you through the operational plan, and I'm excited to have been working with Keith in building that plan and now to see the growing momentum and positivity around the business as we start to deliver the reset that's needed. With that in mind, let me share how we're planning to fund the change and the opportunities that that brings with it. The strategic review has highlighted around GBP 1 billion of additional investment, GBP 400 million of it providing RCV growth through the Ofwat cost change process, while GBP 600 million will be focused on improving performance and compliance in the wastewater and clean water businesses. Together, these factors drive growth in excess of 40% by 2030. As Keith has highlighted, we are now anticipating ODI penalties throughout the AMP. As a result, we need a refreshed and updated funding plan that will support the business both to deliver the increased growth opportunity that Cost Change and new investment represent, but also to ensure we retain a sustainable and resilient funding structure. Operating cash flows and debt funding will of course continue to play a critical part in the delivery of our plan, whilst the rights issue and wider funding package announced today will also ensure a resilient and sustainable financial position through to 2030. In finalizing the revised funding plan, we have explored extensively different options for funding the plan through to 2030. Our plan therefore combines both actions we can take within the group, the divestment of the existing four Pennon Power development sites, reinvestment of identified efficiencies, as well as support from investors through the GBP 550 million rights issue, increased debt funding, and an adjusted dividend. The rights issue is the core component of this refreshed plan, providing an exciting opportunity for further growth in our asset base whilst also improving our performance and resilience. It also allows us to continue to target gearing at the water business at no more than 65%, with group gearing a few percentage points higher but no more than around 70%. ODI performance is creating pressure on key credit metrics, which coupled with wider uncertainty around the sector, results in rating pressure. We have had extensive discussions with Moody's in particular over the past few months, and Moody's has today confirmed a downgrade to Baa2 stable on both South West Water and SES Water credit ratings. An investment-grade credit rating remains critical to our funding approach, and the rights issue will support a resilient and sustainable balance sheet and allow supported growth over the remainder of the AMP. The divestment of Pennon Power is part of our wider funding package and will allow reallocation of that capital to reduce debt at the group level, allowing greater focus on capital allocation directly into the regulated water group. We previously targeted outperformance in terms of CapEx delivery. We are now looking to reinvest the efficiencies on the core program to instead invest in new schemes that will improve performance and strengthen compliance across our regions, but particularly in the southwest. Finally, the dividend forms a key part of the overall funding package, which continues to target a progressive and sustainable approach over the AMP. We have deliberated in particular on the dividend, recognizing the increased growth opportunity the group needs to deliver, but also acknowledging the importance of the dividend to our shareholders. We have taken the prudent decision to rebase our dividend as part of this funding package to ensure solid balance sheet, credit metrics, and foundations to unlock the higher growth profile. This means we are reducing the dividend by around 10% or GBP 13 million on the 2025-2026 dividend in absolute terms, reflecting the higher growth levels over the remainder of the AMP. On a dividend per share basis, and taking into account the new shares issued as part of the rights issue, the dividend will be rebased to around GBP 0.18 per share. Around 30% dilution as a result of the new shares in issue and the small reduction in absolute terms. We do retain our progressive dividend approach, with dividends increasing from this base by CPIH over the forthcoming AMP. The rights issue will support the business across the AMP and provide a strong and resilient position from which to provide the growth to 2030. The rights issue is fully underwritten and gives every shareholder the chance to invest in this plan on the same terms, with results expected on October 27th. For the analysts amongst you, the appendix also contains an illustrative impact on the historical financials and the bonus element methodology. Before I finish, I wanted to briefly reconfirm the financial outlook for the year. We remain in line with market expectations, with group EBITDA expected to increase by 5%-10% for the year. We anticipate slightly higher CapEx than previously, driven by the ongoing capital investment program. As many of you will doubtless have seen, we received judgment in respect of historic Environment Agency prosecutions on September 29th and received a fine of just under GBP 8 million. This, together with a small number of other legacy legal claims, will result in recognition at the half year of around GBP 13 million in provisions for fines and legal costs. In addition, as part of the strategic review, we have reviewed the desalination project previously committed to following the 2022 drought. The project is no longer considered viable, and an impairment charge of GBP 33 million is expected to be recognized at the half year. Together, this revised funding supports our new operational plan, maintains a strong balance sheet whilst we do it, and gives shareholders faster RCV growth. The dividend will be rebased but grow in line with CPIH, consistent with our previous policy and providing an attractive value proposition as we turn around the business and support higher growth into the future. I will now hand back to Keith for his summary. Let me recap. The plans we have outlined today follow months of detailed workshops with the senior leadership teams, site visits, process reviews, and engagement with a broad range of our stakeholders. There are actions that were plainly evident and other decisions that we have scrutinized carefully as a management team and Board. What we have now is a plan to drive a stronger and more resilient business. We have already embarked on our operational reset with a refreshed leadership team focused on delivery and performance, with clear accountability being embedded across the organization. We will accelerate the recovery of our operational performance, align with the delivery of the asset investment program, complemented by our targeting of additional growth. Looking ahead, we have much work to do, but we have the plans, we have the experienced leadership, and colleagues who are passionate and driven to deliver. I firmly believe executing on our plans will deliver better performance for our customers, improvement to the environment, long-term sustainable growth, and returns for our shareholders. That concludes the presentation. I will now hand back for Q&A. Thank you. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. Our first question for today comes from Rob Pulleyn of Morgan Stanley. Your line is now open. Please go ahead. Hi. Good morning, and thank you for taking some questions after a thorough run through on the presentation. There is lots of questions, so I will try and limit it to a few in respect of other people. Firstly, I think we all understand why you stepped away from the previous RoRE guidance. But without any returns or net income guidance, it is difficult for the market to assess return on increased capital allocation. So can we ask where you see returns or when you think Pennon will be in a position to guide on earnings growth and/or returns? Secondly, on the gearing comment, can we just clarify the slide saying gearing, group gearing, sorry, is unlikely to exceed 70%? Can we clarify whether that is before or after the Pennon Power disposal? I.e., is not exceeding 70% contingent on selling that business. And thirdly and finally, to the GBP 600 million additional investment. Could we just clarify how much of that actually goes into the RCV, if any? And if the ODI performance is effectively linked to that extra investment to turn around the business. Thank you very much for the extra color. Well, let me start with that and then I am sure Keith will potentially want to add in as well. I think the first question was about RoRE. I think we are not providing guidance in terms of RoRE as part of this. We obviously have done that before, but given the ODI penalty position, and the need to therefore reinvest totex back into the business to drive that improved performance, at this stage, we do not think that is appropriate. The ODI penalties are very much a focus to remediate. So on that basis, we are not providing guidance at this point on that, but we will continue to keep that under review as we move forward, and as our performance starts to see the improvement that Keith has been talking about. From a group gearing perspective, the timing of the sale of Pennon Power, it should not be an issue in terms of the group gearing. We expect it to stay below that 70%, notwithstanding the sale of Pennon Power, so it is not sensitive to that. From a GBP 600 million, it is very much looked at in terms of we have always been talking about delivering totex efficiencies. We are now, instead of simply taking the benefit of that in outperformance, looking to reinvest that money throughout the AMP to improve the performance. Very much linked, I think you had questioned with performance improvements, and we have detailed plans of where that money is going, what ODI performance that links with, and therefore the benefit it is providing. It will all then work its way through both the efficiency and the new spend through the regulatory mechanism. You will see we have guided to the scale of growth in terms of RCV by the end of the period, which is probably the simplest way to think about it. So there is some small benefit overall from that to RCV on top of the GBP 400 million of cost change. I think what is important to demonstrate here is that the GBP 600 million is very much linked to ODI performance commitments. As part of that GBP 600 million, a large cohort of that is going into leakage. Also some targeted interventions for supply interruptions and compliance. We have a capital investment program where we are closing out some schemes in AMP7 and some major projects in AMP8, very much linked to wastewater compliance that form part of that GBP 600 million. We also have some transformational elements in there that are technology enabled. So beyond Fusion, we are looking to deliver a planning and scheduling system. We are looking to enhance our operational control center. These are all elements very much linked to efficiency, productivity, and ultimately performance. Lastly, there is about GBP 40 million of that GBP 600 attached to AMP9 transition. I would suggest we have not transitioned very well into AMP8. We will be making sure that the resources we have today for engineering, for modeling, for solution development on AMP9 projects will be very structured and organized as we go into April 2030. That hopefully gives you a bit of insight into what we've targeted. Thanks very much for the color. I'll turn it over. Thank you. Our next question comes from Ajay Patel of Goldman Sachs. The line's now open. Good— Please go ahead. Good morning, and thank you. Thank you for the presentation. I just wanted to maybe dig into a few more of the questions that maybe Rob was asking. The GBP 600 million. I understand that this is financed or funded or the payment for that comes from totex efficiencies. But is it the complete amount? Are we investing GBP 600 million here to improve the asset health of the company so that we can see better improvements on the ODI side, and some of that is covered by totex efficiencies? Or is that fully funded or fully paid for by totex efficiencies? I won't go into the RCV, won't get any sort of remuneration in the revenue, but I should expect you to save enough on totex to pay for the GBP 600 million? Or if not, what proportion are we talking here? Then just on the return point, just maybe not to labor it too much, but just to make sure I have the right framing in my mind. I think you said it was very unlikely to get an EPA four-star status score by 2028. I assume then that would mean the 30 basis points benefit that that has disappears. If your ODI delivery is half of what you attained last year, and I think it was a 2% RoRE negative last year, that would imply maybe 1.5% negative ODI, as an average over the five years. If the totex efficiencies are paying for new CapEx, does that mean that your return for this period is quite low? I was wondering, do we expect to be below cost of equity for this period of time out to 2030 while you deliver asset health improvements, turn around that ODI picture so that you're in a stronger position to paint a picture beyond into the next AMP? Can you maybe help me with that, please? Yeah. Let me start, and again, I'm sure Keith will want to pick up. I think, on the GBP 600 million, yes, what we're targeting is effectively to fully spend the allowances from the final determination and end up broadly flat on totex, materially flat on totex by the end of the period, excluding then cost change, which happens on top. So yes, taking, in terms of regulatory allowances, efficiencies out of those allowances are then reinvested, so the total totex, as we see it sitting here today, will be broadly aligned. So maybe to answer in a slightly different way, but hopefully that gives a bit more clarity. From a return, you're right. We are, as Keith mentioned, seeing the four-star rating by 2028 as challenging, particularly with some of the uncertainties around some of those metrics and measures. Therefore, we are not expecting to achieve the 30 basis points uplift for the outstanding plan. I think to the last point, yes, we are in a period where we need to really focus on turning around our performance so that we can return to the outperformance levels that you would expect of Pennon. As a result of that, we have, you were absolutely right, penalties arising throughout the period from ODIs. We are fully expecting to invest 100% of the totex, albeit trying to deliver as much as we can in terms of performance benefit through that spend. That then just leaves financing. We have previously outperformed on financing when inflation is higher. Our current projections would use an inflation rate that returns back to 2% during the period. Then we would see less outperformance this period than we would have done historically. That would obviously depend on the more macroeconomic circumstances as well. Sorry. Just to be clear, you are going to spend GBP 1 billion. If we think about the GBP 3.6 billion being spent over the next five years, GBP 400 million, that is through the reopener process. GBP 600 million additionally will be spent for asset health purposes, and that will be effectively paid for by efficiencies on the existing CapEx that you are spending so that there will not be an incremental step up on that side. Is that the way to think about it? Correct. Okay. Thank you. Very clear. Thank you. Thank you. Our next question comes from Jenny Ping of Citi. Your line is now open. Please go ahead. Thank you very much. A couple of questions from me, please. Just on the lack of targets, coming back to RoRE once again. I guess you are effectively saying you are spending GBP 600 million back into the business without any additional value creation. To come to the market without some sense of how long and how visible the recovery is, I think it is very tricky for the market to buy in given the track record of the company. Is there anything you could say with regards to that at this stage? I understand the ODI underperformance point, but equally, I think you see where your shares are, and that is reflective of the lack of visibility. Anything you can give us on whether it is earnings or RoRE just trying that again, because I think that is super important. Just on Pennon Power, I guess the invested capital of GBP 160 million is what you have assumed in your numbers. Is there any reason why you have not gone out already with some sort of indicative bid, or have you? Is this just purely on timing of when the COD of the assets delivery is? Just very lastly on ODI penalties, you on page 22 talks about the 50% reduction. Can you just talk us through why it is so difficult to get to a better place? A 50% reduction to spend GBP 600 million on that. Are you being conservative there? How much headroom have you built in? Or is this generally a much worse business case when you open the hood of the trunk when you arrived, and there is just much more issues with underlying business? Thank you very much. Well, let me start and then Keith can pick up. I think on the ODI guidance, we have absolutely looked at that long and hard, and tested ourselves to try and provide as much guidance as possible. We have obviously provided the 40% step-up in RCV growth. There is previous guidance out around revenue from a regulation perspective, as well as the ODI penalty that we have included towards the end of the AMP. I guess there are considerations and limitations when raising capital in this way in terms of providing longer-term profit forecasts. But I think we felt that there was information out there, but it is something that we will continue to look at as we move forward to provide as much information as possible. And particularly, as I said earlier, around how our performance improves over time so that we can give more certainty around some of the EBITDA measures as well. From a power perspective, we haven't gone out yet. Again, I think we've probably discussed this previously. I think it's important that we have completed the four projects before we dispose of them. We want to ensure that we are doing it to maximize the value rather than sell in the short term. So we are looking to run that process once completion of the construction has taken place, which we are anticipating to be in spring next year. Yes. So I think in terms of the timing, Jenny, the strategic review today is that point in time where we will start the process for marketing Pennon Power. We've already completed the benchmarking exercise of all our renewable assets across the U.K., and what the price tag is. So all of that work is already complete. Now it's about the procurement and the disposal in line with what Laura has said by making it operational. Look, I think, in terms of the GBP 600 million, Jenny, there is over GBP 300 million of that is linked to performance commitments, particularly in leakage, supply interruptions, and some of our MeX measures. There is over GBP 200 million is linked to resolving capital project challenges, just to be clear on that. And I think, look, what the message is here, that I appreciate that 50% reduction may not feel ambitious to you and maybe other investors, but we have a history of over-committing and underperforming in terms of what we set. And certainly my intention is to move the business as fast as possible to outperform on that current trajectory that we've demonstrated today. So, once we bed into the initiatives and start to see some of the improvements, in time we can clearly give better clarity on that forecast. Thank you very much. Thank you. Our next question comes from Christabel Kelly of UBS. The line is now open. Please go ahead. Hi. Thank you. Christabel from UBS here. Just two questions. First is on the ODI penalty. This is on slide 22. How is it modeled, please? Because I understand that post the review, there will be a re-benchmarking, which means the anchor will be reset. Just trying to understand what will drive the forecast, in case the outturn could be better. Then the second question is on the rating agencies. I believe you're negative on the outlook for South West Water. Do you expect this to go back to stable? Thank you. That's it. On the first question, I think what's important here is we've obviously looked at all of the ODI performance commitments, some that are actually performing well, and the five or six measures that are hurting us the most with penalty. This maybe ties in a little bit with Jenny's question previously. On leakage is a three-year average. We are seeing quite a large penalty in South West after year one, and where we are at the minute for year two. Clearly, that will take a period of time to resolve that three-year average, but we are almost at nine in terms of a targeted plan. That does form part of that forecast in year five. Pollution is also an area where we are an outlier in the industry, and compared back to the required Ofwat performance target. We are forecasting to be at the cap for pollutions through the rest of this AMP. That's difficult. We know we've got an outturn adjustment mechanism to come, so that may improve things. But it's difficult to understand that until we see the first outlook on that from Ofwat. Then we've got C-MeX, where in South West, again, that is a decent-sized penalty. We hope to reduce that, but that takes a bit of time, so there's a number of measures in there that are probably carrying the weight of the 50%. But there are other measures, like supply interruptions, where I would hope to make some material gains, in Bristol and South West in particular, over the next 18 months with a lot of the work the management team are on with now. I appreciate, back to Jenny's question as well, we will give better clarity on this going forwards, but that is our current assessment based on our position today. If I just pick up from that. Keith mentioned the outturn adjustment mechanism. I am not sure if that is what you meant by the re-benchmarking comment. That will apply to this year. We are expecting a benefit coming through from that, but I believe it is taken year- by- year rather than across the AMP. At this point, we have not factored anything in as a remainder of the AMP. Obviously, it is dependent on the median company and various other factors in that calculation. From a rating agency's perspective, the downgrade is to Baa2 to stable outlook. I think, having had the downgrade, the measures and metrics are seen to be at the stronger end of that level, so to be stable for the rest of the AMP. It is the ODI penalties that have impacted on that rating in particular. Again, that is why it is really critical that we drive forward with the plan to turn around performance and ensure that we can strengthen those credit metrics as we move forward as well. Thank you. Thank you very much. Thank you. Our next question comes from James Brand of Deutsche Bank. Your line's now open. Please go ahead. Thanks for taking my questions. The focus on the ODIs, you obviously have set the target for close to halving of the ODI penalties, then you also have the consumer measures on top, I believe, where you said you wanted to get to, I think, middle of the ranking on C-MeX and hopefully outperform on D-MeX. If we take the kind of the ODI measures and the other kind of performance measures together, what should we be thinking about in terms of how the target translates by the end of the period? Are we kind of talking about GBP 20 million-GBP 25 million penalty? I just want to kind of make sure I understand that correctly in terms of what that guidance is pointing to. The second question also on ODIs is, and it was kind of, I guess, touched upon a bit by Jenny, is that that's still quite a significant penalty. If we're kind of looking forward and we're kind of thinking about the equity case here being that Pennon actually gets to a position where it's earning good returns again, how should we be thinking about the next regulatory period? Do you need to spend another GBP 600 million in the next regulatory period to get that to zero? Or is there a chance on an optimistic case that it could get to zero going into the next regulatory period? Because obviously, if you need to do the same again the next regulatory period to get to zero, then it's more like a 10-year turnaround rather than a three or four-year turnaround. Thank you very much. Okay. Thanks for the questions, James. Look, at the minute, clearly, in terms of that forecast, we are looking at, in terms of a number of those measures, around GBP 28 million in penalty by year five, and that would, I guess, look at the operational measures, then there's a bit more on that with the customer measures. We are hoping to outperform, in BR-MeX by the end of the AMP and on D-MeX, and then there's some penalty with C-MeX factored in there. Look, I think what's important to say is my focus now is how we exit AMP8 on performance and how fast we can get there on the performance commitments. The AMP9 transition piece is also very important because I don't think we have been prepared for the step change in performance that we should have been conditioned to for year one and year two. For me now, it's about targeting the right areas to outperform on this forecast at the minute. I do have a history of being able to do that in the past. That's why we've completed the bottom-up plans over the last few months. We will start to see those interventions delivered. Look, for me, it is very much about recovery in AMP8 and hopefully being in a much stronger position to get a fast start in AMP9 and be matching the required performance expected of us. Thanks. Thank you. Our next question comes from Rob Pulleyn of Morgan Stanley. Your line's now open. Please go ahead. Hello. Yes, I've rejoined just to ask some more questions. Maybe it's linked to a lot of the prior questions, guys, but maybe just pull this together, and appreciating the current management team, obviously relatively new and not been involved for several years. The market, as we can see in the share price performance, has been asking for a while, how bad things are at Pennon. There was obviously an explicit question on that earlier. I think your presentation is refreshingly candid about the things that are wrong and what you aim to try and fix. Should we consider very simply the price tag to fix what is wrong? Is this GBP 600 million, right? After investing that, then we're going to be back to where, or at least on the exit velocity of where Pennon should be as we exit AMP8 and go into AMP9, which you're talking about. Is this the right way the market should think about it? Thank you very much. Hi, Rob. Thank you. Look, I've tried to be fairly open and transparent in, I guess, the diagnosis over the last six months, but more importantly, what the action plan needs to look like going forward. I think it's important that I demonstrate the how in terms of how we get there over the next two or three years, and you will see more of that in updates in due course to hopefully gain that confidence and momentum from both our customers, but yourselves as shareholders. Look, the package is designed in a way to address some of the major areas of weakness in leakage and compliance. We know we've a better way to go yet on pollution being an outlier, but I think there's a number of aspects in this funding package that should put us in a much better position as we enter into AMP9. I would suggest that we will be going a long way to resolving a number of the measures, but we appreciate there's still work to do on the likes of pollution, and some of those environmental requirements that just require more investment in AMP9 to get there. If I just add, I think you're right that GBP 600 million is, if you like, the price tag to focus on performance. But, as we said earlier, what we're trying to do is fit that within the original totex envelope, if you like, for the AMP. Rather than having any overspend, still targeting to remain within our totex allowances. Plus cost change is also really beneficial. Together, we are still looking at an upgrade to the growth that we previously talked about. The challenge is really the ODI performance. We know we take 100% of that to the company or shareholders' account, whereas if we deliver efficiencies, we share that with customers. It really makes sense to drive that totex back into the business, recover the performance, and then that will set us up, as Keith says, well for a return to a stronger performance ahead of AMP9. Thank you. Thanks. Thank you. Our next question comes from Joy Xu over BNP Paribas. Your line is now open. Please go ahead. Thanks, Keith and Laura, for the update today. I am going to move away from that GBP 600 million and maybe focus on the GBP 400 million, which is on the reopeners. I think previously you have sort of indicated that you could walk away from the reopeners if the in-period revenue is not granted. It looks like it has been awarded, but it is deferred until the end of the period. In your plans for this, it looks like you have agreed to go ahead with the reopeners for this current year. I just wanted to check, in your sort of plans and forecasts for the rest of the AMP, have you taken into consideration that you could be granted the in-period revenue adjustment, or is that still pending? If that is the outcome of that in December, will it impact your submission for the next two periods? Thank you. Okay. Thanks for the question on the Cost Change process. Yes, look, we worked on the submission on this in April when I started. We very much made sure that the asset health categories we selected were aligned with the areas of performance that we needed to improve. We have clearly linked it to environment with the sewer rehab program. We have asked for additional storage to give us better resilience for drinking water and enhanced water quality as well, and there is a bit of growth in there for Newquay. We obviously are representing back with Ofwat at the minute on the in-period revenue, so we have to respect that process and let that flow through to final determination in December. That's really about, I guess, explaining that we are spending, I guess, the totex requirement in line with the alliance, and that's the crux of what we're aiming for to hopefully get that in-period revenue. That will then apply, of course, to making sure we deliver on the investment program going into March next year, and that hopefully will open the door for us to apply for an extra GBP 170 million of asset health categories. We understand some of those categories today. We're already working up the plan in terms of what we would like to aim for with Ofwat, but respecting the process, we'll have to go through that dialogue and discussion in due course. But again, we'll be picking asset health categories that matter for customer service levels and environment performance. The in-period revenue is what we are clearly aiming for, and Laura may want to come in just to finalize that. Yeah, if you look at what Ofwat has granted to the sector, it is very much about funding the returns on that investment as that CapEx is delivered. So it's relatively small. It's not a significant pay as you go or similar sort of context around it. We have, as Keith said, had some very constructive and helpful conversations with Ofwat over the last few weeks around this and a number of other aspects. So, we'll see what happens in the final determination. But I think ultimately, the number is probably smaller, in terms of what would be allowed for that revenue. Still very helpful, and we are keen to engage with Ofwat on it. But ultimately, we've reached the conclusion that the benefit that we can gain from the additional investment, which obviously also provides 100% RCV growth, is worthwhile to drive the business forward this AMP. We would, as you say, get true up in the end of AMP reconciliation process. But I think, the priority is getting the business back on track, and this GBP 400 million of additional investment will help with that. Okay. Thank you very much. Thank you. At this time, we currently have no further questions, so I will hand it back to Keith and Laura for any further remarks. Thank you, Alex. Look, I guess thank you for everybody that has dialed in today. We hope you have found that useful in terms of an update. Clearly, if you want any follow-up calls or meetings or discussions, then please link that back through our investor relations team with James Found, and we will get those calls or meetings scheduled in. Again, thank you for your time, and we will speak to you soon. Thank you very much.