PENNON LAUNCHES £550M SHARE SALE AFTER SEWAGE SPILL FINE

Pennon has launched a £550 million rights issue to investors to help fund around £1 billion in extra investment, weeks after its South West Water subsidiary was fined £7.9 million over repeated sewage spills. Chief executive Keith Haslett, who took on the role in April, said the cash-call would support plans to "deliver better outcomes for our customers and communities". Pennon, which also owns Bristol Water and SES Water, said the new funding comes on top of roughly £2.6 billion already committed under agreed plans with regulator Ofwat. Plymouth Magistrates' Court handed South West Water the fine last month over 18 environmental offences linked to pollution incidents across Devon and Cornwall spanning six years.

Pennon reported outcome delivery incentive penalties from Ofwat of around £42 million for its water and waste water performance in 2025-26, which it attributed in part to "exceptional storms and sustained rainfall coupled with a step up in targets and penalty rates". Under the outcome delivery incentive system, water companies receive financial rewards or penalties from Ofwat depending on whether they meet performance targets. Pennon said pollution incidents fell by 34 per cent and storm overflow use dropped by 17 per cent during 2025-26. The company said it is investing £3.2 billion as part of its wider improvement programme.

Haslett said a review of the business found "real strengths" alongside "areas where we need to improve", and described an operational plan already under way that focuses on "clearer accountability" and bringing key skills back in-house. He said the plan is intended to "deliver a better service for customers, improve our environmental performance and generate sustainable, growing value for our shareholders". Pennon did not set out a timetable beyond describing the operational plan as already in progress.