Pennon reveals clean-up cost of water contamination incident added to £36m upgrade bill
A water contamination outbreak which affected thousands of homes in a South West seaside resort pushed up ‘reshaping and transformation’ costs at utility group Pennon to around £36m, it said today.
The Exeter-based group, which owns South West Water, told shareholders in a trading update that non-underlying costs for its reshaping and transformation programmes and the finalisation of costs, including those relating to the incident in Brixham, came to approximately £36m.
About 17,000 households in the South Devon town had to boil their drinking water during the parasite contamination.
Cryptosporidium was confirmed in the supply, with more than 100 confirmed cases of the diarrhoea-type illness.
South West Water believes the parasite entered its network through a damaged valve on a pipe on private land.
The company has since added additional safety measures following the incident including a “triple layer of protection”, with microfilters and UV at supply tanks and in-line microfiltration in the local supply zone, to provide additional barriers.
Pennon, which employs around 3,000 people, also said in today’s trading update for the year ending 31 March that its financial performance for the full year 2024/25 remained in line with management expectations.
Earnings were broadly flat, with lower customer demand and inflationary cost pressures offset by the group’s reshaping and restructuring programme.
Pennon said it was continuing to deliver against its priorities, with a £1bn, five-year investment programmes underway and was one of only five companies in the industry to reduce storm overflow releases year on year, with bathing beach releases during the bathing season down by 21% since 2020.
Founded in 1989, FTSE 250 listed Pennon provides clean water and wastewater services across the South West, serving a population of around 3.5m in nine counties and approximately 380,000 business customers around the UK.
It delivers 870m litres of drinking water a day and has 19,000km of sewers and 653 wastewater treatment works.
The group expects to announce its full-year results on 3 June. Its shares fell by just over 3% in early trading this morning.
