Outrage over huge payout at Pennon

Two months after water firm fined over sewage… Outrage over huge payout at Pennon

  • Pennon hiked its dividend for the year by 10% to £111.7m
  • Last year, it also paid a £1.5billion special dividend
  • It comes despite one of its subsidiaries, South West Water, being fined £2.15m

One of the UK’s top water companies – fined for dumping sewage in rivers and the sea – has handed millions of pounds to its investors.

Water giant Pennon hiked its dividend for the year by 10 per cent to £111.7m. Last year, it also paid a £1.5billion special dividend.

It comes despite one of its subsidiaries, South West Water, being fined £2.15m in April for illegally dumping sewage in rivers and the sea around Devon and Cornwall.

Politicians have called on the company to clean up its act before paying its shareholders.

Liberal Democrat environment spokesman Tim Farron said it was ‘a slap in the face’ for communities in the South West who are facing hosepipe bans and sewage dumping.

Handed back bonus: But Pennon boss Susan Davy hiked Pennon’s dividend to £111m

He added: ‘The system is broken when their execs and shareholders are rewarded with millions of pounds for destroying the environment.’

Last month, The Mail on Sunday revealed that two of the UK’s biggest water companies, Seven Trent and United Utilities, would deliver bumper payouts to shareholders.

Severn Trent increased its annual payout to £261m from £255m in 2022.United Utilities decided to pay shareholders more than £300m despite being England’s worst-polluting water company last year.

Pennon has promised to clean up its act, saying its ‘storm overflow use’ – where raw sewage is discharged into the sea – fell 30 per cent in 2022.

It reported a pre-tax loss of £8.5m for the year to March, down from a £128m profit in 2022 as operating costs surged nearly 27 per cent to £517m.

It blamed this on higher inflation and ‘unprecedented summer weather’ last year when the UK suffered one of its hottest and driest years on record, sparking droughts and wildfires.

‘This has been an extraordinary year for Pennon in which extreme weather patterns have tested our operational resilience,’ said boss Susan Davy. Last month, Ms Davy decided to forgo her £450,000 bonus amid growing public anger over the dumping of sewage, joining Thames Water chief executive Sarah Bentley and Nicola Shaw, of Yorkshire Water.

The water regulator, Ofwat, also opened an investigation into South West Water last week over whether it was accurately reporting leaks and the volume of water used by customers. If found to have reported the wrong figures, it could be fined as much as 10 per cent of annual revenues, which for South West Water amounted to £701.3m this year. Activists were also unimpressed by Pennon’s payments to investors and called for regulators to take further action against the industry.

‘We’re demanding that Ofwat cap chief executive bonuses and regulate, so that dividends and bonuses are only paid when environmental regulations have been upheld and water company performance is improving,’ said Henry Swithinbank, policy manager of Surfers Against Sewage.

‘Nobody should be rewarded for destroying the environment.’

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