South West Water owner Pennon says losses deepened after Devon parasite outbreak
South West Water owner Pennon has reported widening losses following a parasite outbreak in Devon, while it said hiking water bills this year would help fund its £3.2 billion investment plans.
The utilities firm reported a pre-tax loss of £72.7 million for the year to the end of March, widening from the £9.1 million loss reported last year.
Last year's incident in Brixham, south Devon, cost it about £21 million, pushing it deeper into an annual loss, it said.
An outbreak of cryptosporidium – a parasite that causes infection – in the water supply left some people in hospital, while more than 100 others reported symptoms including diarrhoea.
Pennon said about 800 of its staff and supply chain partners spent eight weeks over the summer working to return safe clean drinking water for people and businesses in the area.
The wider annual loss also reflects £15.8 million in costs related to restructuring actions over the year, it revealed.
Meanwhile, Pennon said plans to ramp up investment in its infrastructure, and encouraging its customers to use less water to save money, had affected its profitability.
The group is targeting £3.2 billion worth of investment by 2030, incorporating work to build new reservoirs, fix storm overflows, meet its net zero commitments, and improve services for customers.
Bills for South West Water customers surged by 28% on average from April, while bills for Bristol Water and Sutton and East Surrey (SES) customers are rising by 5% and 3% respectively.
Pennon said the bill hikes would help fund around a third of its investments.
Susan Davy, Pennon's chief executive, said: 'We know customers are worried about rising bills to fund this level of investment.
'While we have made the tough decision to put bills up in 2025/26 – for the first time in over a decade – two-thirds of our investments are being funded by our supportive investors and debt providers.
'Ultimately everyone will benefit from the investments we are making – from building reservoirs, to fixing storm overflows, powering our net zero ambitions and helping to create economic growth.'
She added that, despite persistent dry weather, 'we're predicting that the South West won't need a hosepipe ban this summer'.
It is also expecting to return to profitability in the year ahead through increased revenues and shaking up business costs.
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