South West Water slashes dividend by £2.4m following record fine
The owner of South West Water has slashed its dividend by £2.4m after it was handed a record fine for illegally dumping sewage into rivers and the sea.
The owner of South West Water has announced an operating profit of £140m in the same week it has been slammed for a major incident in Devon.
Pennon, which also owns Bristol Water, has been labelled incompetent over its handling of the incident which residents in the Brixham area hit by a water borne parasite outbreak.
Thousands of people in the Brixham area were told to boil their tap water following the outbreak.
The firm responsible has been fined 18 times in the last 10 years for various incidents.
The business was fined £2.2m in April last year for illegally dumping sewage into rivers and the sea in Devon and Cornwall.
The fine followed an investigation by the Environment Agency that found South West Water culpable for significant environmental harm.
Susan Davy, the chief executive of the firm, introduced the firm’s annual results with an apology to customers.
The under fire chief executive said: “Whilst the results we are announcing today are based on our performance for the last financial year, we are 100% focused on returning a safe water supply to the people and businesses in and around Brixham.
“Normal service has returned for 85% of customers, but we won’t stop until the local drinking water is returned to the quality all our customers expect and deserve. Our absolute priority continues to be the health and safety of our customers and our operational teams are working tirelessly around the clock to deliver this.
“We have delivered a robust performance for 2023/24 and retained good levels of liquidity. We have continued to make sure we are prepared for a sustainable future for all our stakeholders with a record level of investment, record support for customers and the creation of new jobs.
“At a time when media, public and regulatory scrutiny is high, it is important we do what is right for all. In the context of the wider group performance, we have carefully considered Ofwat’s new dividend guidance for water businesses.
“We have followed our K7 dividend growth policy of CPIH + 2%, and adjusted the final dividend quantum by £2.4 million, equivalent to the South West Water Court fine in 2023/24, signalling we are listening, clearing the way for long-term shareholder value.”
The company announced revenues of just over £907m and increase of ten per cent.
Statutory operating profit was £140m and in increase of more than 28 per cent.
The firm said overall performance was in line with our expectations while operating costs have been stabilising.
A peak investment year is expected with totals reaching £930m.
