Southern Water named amongst four worst performing water firms for finances
The regulator Ofwat say they need to address big financial holes
Last updated 26th Oct 2023
Southern Water has been named amongst the four worst performing water companies in the UK.
The regulator Ofwat has named them alongside Thames Water, SES Water and South East Water as needing to turn address major holes in their finances.
The regulator said "there are some companies that did not fully meet our expectation in explaining dividend decisions and payments."
It comes as £1.4 billion was paid out to shareholders as dividends in the last financial year.
Portsmouth Water was also moved re-categorised as being of "elevated concern" to the regulator, meaning they'll be subject to greater scrutiny.
Ofwat say the water sector's financial resilience has been boosted by receiving an extra £4.6 billion from shareholders since 2020.
Their Chief Executive, David Black, said:
"We expect companies to maintain a level of financial headroom so they can manage periods of volatility and meet their obligations to customers and the environment.
"Where we have seen cause for concern, we have also seen some companies responding to the challenge and we expect them to continue to work on improving their financial resilience."
In response, a Southern Water spokesperson said:
“In support of Southern Water’s Turnaround Plan, funds managed by our majority shareholder provided an additional £550 million of equity into the business earlier this month.
“This is enabling Southern Water to increase investment in its network to £3 billion during this regulatory period (2020-25), equivalent to investing £1,500 per household.
“Southern Water’s new executive team is continuing to deliver on the Turnaround Plan, which is focused on ensuring a reliable supply of water for customers; protecting and improving the health of rivers and seas by building capacity and resilience of our waste-water treatment works and sewer network; making customer service easy and trusted; and becoming an industry-leader in health and safety.”
We've also contacted Portsmouth Water for a response.