𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

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Pennon has announced a £550 million investor cash-call to help fund a wider overhaul, weeks after its South West Water business was handed a record £7.9 million fine for repeated sewage spills.

Recently-appointed chief executive Keith Haslett said the rights issue will support plans for around £1 billion in extra investment as it aims to “deliver better outcomes for our customers and communities”.

London-listed Pennon, which also owns Bristol Water and SES Water, said this figure comes on top of approximately £2.6 billion already committed under agreed plans with regulator Ofwat.

The move follows last month’s record penalty handed down at Plymouth Magistrates’ Court over 18 environmental offences relating to pollution incidents across Devon and Cornwall over a six-year period.

Mr Haslett, who took on the role in April, said: “It’s clear from my comprehensive review that Pennon has real strengths, but there are areas where we need to improve and deliver better outcomes for our customers and communities.”

He added: “The operational plan, which is already under way, is practical and focuses on clearer accountability with key skills brought back in-house, and more investment where our assets need it most.”

He insisted the plan would “deliver a better service for customers, improve our environmental performance and generate sustainable, growing value for our shareholders”.

In recent results, Pennon revealed so-called outcome delivery incentives (ODI) penalties from the water regulator of around £42 million for its water and waste water performance over 2025-26, which it said came as it faced “exceptional storms and sustained rainfall coupled with a step up in targets and penalty rates”.

ODI is a system whereby a company can receive financial rewards or pay penalties based on performance targets, which are set by water regulator Ofwat.

A net penalty means it is paying more for under-performance than it receives for performing ahead of targets.

Pennon insisted it was making improvements, with pollution incidents down by more than a third (34%) and storm overflow use reduced by 17 per cent in 2025-26.

The group is also investing £3.2 billion over the five years to 2030 as part of a plan agreed with Ofwat, with £644 million invested in the past financial year.