Pennon Water, the parent company of South West Water, has reduced its dividend by £2.4 million following a record fine for illegal sewage discharges into rivers and seas. The company reduced its total investor payout to 44.37p per share from 45.21p, indicating its commitment to rebuilding long-term shareholder value.
Last April, South West Water was fined £2.2 million for violating environmental laws by discharging sewage into water bodies in Devon and Cornwall, after an Environment Agency investigation highlighted significant ecological damage caused by the utility.
Alongside the dividend cut, the company reported a dividend payout of £126.9 million while addressing a water safety concern in Brixham, Devon, where about 17,000 households received a boil water advisory due to the detection of a parasite in the water network.
Pennon, which also manages Bristol Water, saw its revenue increase by 10% to £907.8 million, though its pre-tax losses widened slightly from £8.5 million to £9.1 million.
Susan Davy, the Chief Executive, emphasized the company’s commitment to restoring safe water supplies in Brixham, stating that normal service has resumed for 85% of the affected customers. She assured that the company’s focus remains on the health and safety of its customers, with teams working non-stop to ensure water quality meets expected standards.
In response to the crisis, Pennon has announced compensation payouts totaling approximately £3.5 million for those affected by the parasite in Devon. Compensation was recently increased to £215 per customer as many continued to face boil water advisories.
Local MP Anthony Mangnall has argued that the compensation should reflect the level of inconvenience and risk faced by the residents.
The government reported that initially, 16,000 homes and businesses in Brixham were advised to boil water before use, during which two individuals were hospitalized due to the contamination.
Additionally, Pennon Group noted an increase in pollution incidents last year, attributing this to unusually heavy rainfall, with South West Water’s incidents rising from 28.5 to 43.3 spills per asset year-over-year.
