Pennon Group, the parent company of South West Water, has announced an 8.6% increase in underlying operating profits to £166.3m. This news comes as the company continues to work towards restoring a safe water supply to the town of Brixham in Devon, where an outbreak of cryptosporidiosis has affected approximately 17,000 households.
The condition, which can cause vomiting and diarrhoea, is believed to have been caused by a water-borne parasite entering a damaged pipe. In light of this, South West Water has advised residents to boil their drinking water as a precaution.
Despite the challenges faced by the company, Pennon Group remains committed to ensuring the health and safety of its customers. Group Chief Executive Susan Davy stated, “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.”
Ms. Davy also acknowledged the progress that has been made, with normal service being restored to 85% of customers. She emphasized that the company will continue to work tirelessly until all customers have access to safe drinking water.
In addition to the efforts being made to address the water supply issue, Pennon Group has also announced that it will be paying out approximately £3.5m in compensation to affected customers in Devon.
The company’s financial results, which include a 10% increase in revenues to over £907m, have been described as “robust” by Ms. Davy. However, she also acknowledged the need to balance the company’s obligations to shareholders with its responsibility to the community. The company has reduced its dividend payments by 3.8% to cover the cost of a £2.4m fine for multiple pollution incidents. Ms. Davy noted, “At a time when media, public, and regulatory scrutiny is high, it is important we do what is right for all.”
Pennon Group’s net debt has risen by 10% to £5.18bn, with capital expenditure increasing by almost 80% to £642.4m. These figures come as water companies negotiate with regulator Ofwat over their spending and revenue plans for the next five years. South West Water has proposed a 20% increase in customer bills as part of its plan.
Despite the challenges faced by the company, Pennon Group remains committed to fulfilling its responsibilities to customers and shareholders alike. As Ms. Davy stated, “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.”
