Corporate View: Chris Tregenna, Pennon Group

Published: Nov 2019
Chris Tregenna, Head of Treasury, Pennon Group

Liquid asset

A business geared to managing something as fundamental to human life as water needs to be permanently at the top of its game. Head of Treasury at Pennon Group, Chris Tregenna, takes his cue from the teamwork of his participation in sport, delivering a service that keeps the business flowing smoothly.

Chris Tregenna

Head of Treasury
Pennon Group

Pennon Group

Pennon Group is a UK water utility and recycling and waste management business based in South West England. It is one of the largest environmental infrastructure groups in the country. Listed on the London Stock Exchange, Pennon is a constituent of the FTSE 250 Index. It operates through its two core businesses, Viridor and South West Water, the latter of which accounts for 83% of the company’s profits. Revenue for 2019 was just under £1.5bn. It has assets of around £6.5bn and employs a workforce of around 5,000.

If money talks, then the level of cash that flows in and out of UK FTSE 250 utility provider, Pennon Group, raises the volume of conversation to a noticeable level. And so it should, because the business, as one of the largest environmental infrastructure groups in the UK, not only provides essential services to its customers, but is also committed to investing heavily in some impressive sustainability targets. The task at hand is made that bit easier by having someone like Chris Tregenna, Head of Treasury, steadfastly moulding his function into a central pillar of the business.

Tregenna is dedicated to supporting sustainable projects across the business and is amply qualified on the financial front to see that it happens with minimal fuss and maximum efficiency. In fact, with the majority of group debt now being executed as sustainable finance, working closely with investors, banks and external agencies to better understand what needs to be achieved in order to qualify has become a major part of his work.

Of course, helping the group meet its sustainability goals is only part of the deal. Tregenna’s day-to-day role sees him covering the full gamut of operational treasury, including managing its substantial cash and debt portfolio. Together, his remit includes a broad sweep of activities that keep his job interesting. Even after 15 years with the company, he is still happy to report that “no day is ever the same”.

Some of what he does stems from having operated under a traditionally divided Group Treasurer/Group Financial Controller regime. Although both senior roles were subsumed into the remit of today’s Director of Treasury, Tax and Group Finance – with many activities having been refined in the process – some principles established by the Group Treasurer of the day have been upheld.

Current policy, for example, directs Tregenna to manage multiple bilateral financing deals. It means that as Head of Treasury he manages “a few more relationships” than some of his peers. Nonetheless, he declares that it works and provides the Group with the flexibility it strives for throughout the business.

This is knowledge that truly comes from experience, Tregenna having worked his way up through the treasury ranks at Pennon. He started as a treasury dealer, moving onto treasury accountant, then treasury manager and upwards to his current role. This passage has enabled him to develop a “good understanding of the operational expectations on the treasury department”, affording him a clear view of how it all fits together, and ensuring treasury is delivering the right service to the business.

Strategic player

It is often said in these pages that the function of treasury has, in recent years, developed into one of strategic importance. All at this level acknowledge that a solid grounding in treasury fundamentals has proven vital in the facilitation of their ascent. Indeed, with forecasting and planning given far greater weight today (as the meeting of corporate objectives through financial best practice rises up the agenda), Tregenna’s own depth of operational expertise ensures he is able to continue meeting expectations when colleagues from other functions seek his advice.

And if the business units once rarely considered the source of their funding, they surely do now, he reports. “With the low interest environment and a rising cost-of-carry, we have all had to become more precise, ensuring we are not holding surplus funds for too long, yet still having the pre-funding available to meet the needs of the business.” Treasury’s voice on the matter is now heard loud and clear.


Increasingly, the scope of Pennon’s large capital projects dovetails with its desire, where possible, to access sustainable finance. Of course, by definition as a recycling and water utility company, its infrastructure improvement projects have positive social and environmental impacts.

But because sustainable funding is contingent on meeting strict guidelines, treasury needs to go out to the business, discussing the major capex projects, probing how these align and integrate with the ‘rules’ of sustainable finance. Given the strength of commitment to using sustainable finance within Pennon, it can even influence the way a project is executed, notes Tregenna.

However, it is not enough just to know that company sustainability goals are well-met; there needs to be evidence to this effect. Investors are now closely scrutinising the environmental, social and governance (ESG) scores of target firms, many seeking more information on what companies are doing to meet sustainable goals. What’s more, for a business such as Pennon seeking to access ‘impact’ or sustainability-linked loans (and potentially unlocking the margin reductions it can offer), it has to provide a clear demonstration of positive ESG activity.

Everyone’s experience of treasury will be different, but having that base understanding and access to resources through the ACT is something I consider to be really important.

Pennon’s strong focus on sustainability is accompanied by a desire to raise the profile of the progress it is making in this space. It needed independently verified ESG metrics for its documentation to help demonstrate its positive ESG impacts. To this effect, it has been working with a number of third parties, such as the well-respected ESG-ratings firm Sustainalytics, to help tell its story to the investor and banking community.

“We’ve also worked with a number of banks who are able to offer impact loans,” he says. “One of the KPIs within the documentation commits the company to improvements in our Sustainalytics score to receive a reduction in the margin. It’s an independent assessment, but we can see the methodology and look to improve against these metrics, and make sure we are clearly reporting the right aspects on our website and through our annual report.”

Through this understanding, Pennon has been able to mature its sustainability strategy, embedding this throughout the company. Every business unit and function is now involved in the implementation, development and progress of the strategy. “And the more it’s embedded, the more we should improve on our scores,” states Tregenna. This greatly assists its access to, and indeed appetite for, sustainable finance, on the whole acting as a virtuous circle of improvement for the business, and the environment and communities in which it operates.

Pennon is also working with international accredited safety and sustainability registrar and classification society, DNV GL. It is helping to create a sustainable financing framework and set of development goals. The collaboration is helping Pennon take its reporting of credible ESG performance “to another level”.

Clearly, for Tregenna, the desire to look at and communicate sustainability in more depth is taking up more of his time. “I need to understand more of the operational drivers in the business, as much as the business has to gain an understanding of what treasury does,” he reports, adding that the outcome makes this a welcome challenge.


Of course, there are other challenges to Pennon’s equilibrium that are less well-defined. Some, such as Brexit, are difficult to judge when building a response. Although as a UK-operating business, the Group is well placed, compared to other corporates, to navigate through Brexit challenges, Tregenna knows there will almost certainly be some fall-out to deal with, depending on how it is delivered. And talk by some British politicians of possibly re-nationalising utilities is also on the company’s radar.

The challenge here is in the uncertainty but Pennon is not simply waiting around. The company can only exercise a watching brief on such events, but a more immediate response is dictated by the rigorous and ongoing demands made by the water and waste industry regulators and policy-makers. Pennon’s waste management subsidiary, Viridor, has not waited to be regulated into action, transforming itself from a landfill business into one focused on recycling and energy recovery.

On the water side, South West Water is in the unique position of having its business plan fast-tracked twice in a row. This has all required significant investment. Treasury has not only been called upon to ensure the business sets the right capex profile, but also that a robust approach to risk mitigation is developed and that the facilities used are being backed by long-dated contracts, the majority of which are from local authorities.

Treasury calling

Being able to devise and implement robust responses to issues as they arise demands knowledge and experience, and Tregenna has this in spades. Having moved immediately post-degree into the hospitality sector, he decided to change direction following an 18-month stint in a prestigious Golf and Country Club in Westchester, New York, moving back to his home country and to an opportunity in South West Water’s sales ledger department. As opportunities arose to move onwards and upwards, he took them.

His initiation into treasury came after three years in the business when a Treasury Dealer position arose. The diversity of treasury activities that ensued has kept him at the business ever since, through acquisitions and the eventual morphing into the diversified Pennon Group.

There is no secret to Tregenna’s treasury success story though. “It’s the ability to embrace whatever challenges are thrown at me,” he explains. The capacity to switch between different topics, and be an expert on all, for the business is, he notes, part of the territory. A natural curiosity and the wherewithal to understand and translate often complex subject matter, related both to finance and the business itself, is all par for the course.

Tregenna is a strong believer that treasury needs to retain its core specialism and expertise, but he also knows that being armed with the right skillset enables him to rise to new challenges as treasury evolves into a more strategic function. It’s an evolution that he fully embraces.

“The last financial crisis certainly pulled financial risk management into focus, but it also changed perceptions of treasury, highlighting the value of the role right across the business, alerting many more people to what we do and how we can help them,” he explains.

Getting personal

The level of understanding required of treasury only increases as the responsibilities mount. Tregenna is suitably proactive in this respect. When he first started at South West Water, he had just embarked on his AAT accounting qualifications. As his career progressed, he built upon this, taking ACCA accounting qualifications and the full set of ACT exams. “I think it’s important to formally set out your understanding of treasury; it’s certainly something I encourage my team to do.”

The academic work undertaken through the ACT not only gives deeper knowledge of the subject but also opens up a network of treasury professionals, he reveals. “Everyone’s experience of treasury will be different, but having that base understanding and access to resources through the ACT is something I consider to be really important.”

The sharpest technical skills of the modern treasurer are perhaps a given in today’s demanding environment. But the importance of well-honed soft skills should not be underestimated, advises Tregenna. “We have a role that is quite specialised and that can mean we are not in the office as often as some other finance people. We need to be part of that team if we are to help, so it is essential that we are able to communicate well and work with everyone in the business.”

Exploring options

For anyone just starting out on a pathway towards treasury glory, Tregenna reiterates the importance of embracing everything that the work throws at them, willingly taking on its full diversity. “There’s a greater focus on the individual career ‘journey’ these days, and less on the notion of ‘job for life’. I advise trying to gain as much experience and understanding of the different aspects as possible.”

Indeed, he continues, taking certain jobs for a period, just to gain the experience, can help open up the next level for the aspiring treasurer. Accounting and finance offer a huge scope for movement and experimentation, both across and between large organisations. Taking full advantage of every opportunity, he feels, “sets the individual in good stead to be able to better understand the direction in which they wish to take their career”.

With the level of responsibility that comes as part of any high-ranking profession, there must be an outlet for the stresses and strains of the day. Although he admits it can sometimes be hard to maintain, achieving a successful work/life balance is important to Tregenna.

A committed family man, he also has passion for rugby, carrying an Exeter Chiefs season ticket as proof of his devotion to the sport. “It’s my escape,” he explains and admits only to being “capable at most sports, but not great”. Fortunately for Pennon Group, at his own admittance, his talents as a treasurer far exceed those of his sporting life.

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