Key facts
- Pennon will raise £550 million from investors to fund infrastructure investment.
- The company also announced a 30% cut to its shareholder dividend.
- South West Water received a record £7.9 million fine for hundreds of sewage spills.
- The fine for sewage spills will be paid by shareholders, not through customer bills.
- South West Water was previously fined £1.85 million for supplying contaminated water.
- Pennon's shares fell as much as 22% following the announcement.
Pennon, the owner of South West Water, is seeking £550 million from investors to fund infrastructure improvements and address environmental performance issues. This move comes days after South West Water was hit with a record £7.9 million fine for hundreds of sewage spills over a six-year period.
The company's new chief executive, Keith Haslett, who was appointed in April, stated that the investment is necessary to drive improved outcomes for customers and communities. The funds will not be raised through further increases to customer bills. Pennon also announced a 30% cut to its shareholder dividend as part of an "operational reset".
Shares in Pennon, which also owns Bristol Water and SES Water, fell as much as 22% on Wednesday following the announcement. The company has faced significant regulatory scrutiny, including a £1.85 million fine in June for supplying water unfit for human consumption after a parasite outbreak in Brixham that sickened hundreds.
In addition to the fines, South West Water has seen a surge in customer complaints, more than doubling over the past year. The company anticipates continuing to incur penalties from the water regulator, Ofwat, until 2030, but aims to reduce them by at least 50% annually. Meanwhile, South West Water has applied for a ban on non-essential water use in parts of Devon and west Dorset due to dry summer conditions.