South West Water owner Pennon to pay £215 per household over contamination (2024)

South West Water owner Pennon to pay £215 per household over Brixham contamination (Image: GETTY)

The owner of South West Water (SWW) has revealed it is paying out about £3.5million in compensation to customers affected by the parasite outbreak in Devon amid calls for the company to offer more for impacted households and businesses.

Pennon boss Susan Davy insisted the group was “100 percent focused on returning a safe water supply” to people in and around Brixham, adding that normal service has now resumed for 85 percent of customers.

SWW upped compensation to £215 for customers in recent days as many were still subjected to boil water advice in Brixham.

Conservative MP Anthony Mangnall, whose Totnes constituency covers Brixham, has said customers should get a level of compensation they “deserve” following the outbreak.

According to the Government, 16,000 households and businesses in Brixham, supplied by SWW, were initially told not to use their tap water for drinking without boiling and cooling it first while two people have been taken to hospital.

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The rate of compensation increased in recent days as many were still subjected to boil water advice (Image: Getty)

The parasite, cryptosporidium, is a waterborne disease which can cause unpleasant symptoms such as diarrhoea and vomiting.

SWW said the outbreak was most likely triggered by animal faeces entering a damaged pipe.

In results out on Tuesday, the group courted further controversy after revealing it has increased its full-year dividend payout to investors, despite reducing it by £2.4million after it was handed a record fine last year for dumping sewage into rivers and the sea in Devon and Cornwall.

The figures also showed underlying operating profits lifted 8.6 percent to £166.3million in the year to March 31.

Group chief executive Susan Davy said: "Whilst the results we are announcing today are based on our performance for the last financial year, we are 100 percent focused on returning a safe water supply to the people and businesses in and around Brixham.

"Normal service has returned for 85 percent of customers but we won't stop until the local drinking water is returned to the quality all our customers expect and deserve. 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."

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The firm said the move to reduce the total dividend payout to investors by 0.84p a share to 44.37p showed "we are listening, clearing the way for long-term shareholder value".

However, the payout was still 3.8 precent higher than the previous year.

While Pennon's underlying operating profit increased by nine percent for the year ended March 31, this is five percent below analysts' consensus estimates, according to LSEG data.

Subsequently, shares in Pennon fell six percent on Tuesday.

Pennon's figures showed that on a statutory basis, pre-tax losses widened to £9.1million for the year ending March 31, compared to losses of £8.5million the previous year, due to increased debt costs.

The group - which also owns Bristol Water and recently bought SES Water - saw its debt pile swell to £3.5billion as of the end of March, up from £3billion a year earlier.

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