The owner of South West Water and SES Water said a fully underwritten £550 million rights issue will help fund about £1 billion of extra investment, and cut the 2026/27 dividend.
British water utility Pennon Group launched a fully underwritten £550 million rights issue, about $728.5 million, and lowered its dividend to fund repairs at its regulated water business, Reuters reported on Wednesday.
The owner of South West Water and SES Water said the raise will help fund roughly £1 billion of additional investment under an operational reset led by chief executive Keith Haslett. Capital spending in the regulated water business over the five years to March 2030 is now expected at about £3.6 billion, around £1 billion more than first planned.
Pennon is considering the sale of Pennon Power, its renewables arm, to focus on water and cut debt, which stood at £4.51 billion at the end of March. It cut the total dividend for 2026/27 to about £125 million from £138 million in 2025/26, implying about a 30 percent cut per share.
The announcement follows Prime Minister Andy Burnham's September statement that he would legislate to repeal a ban on public ownership of water companies. Reuters noted the sector is under scrutiny for environmental breaches, dividends and rising bills.
The rights issue is launched and underwritten. A sale of Pennon Power is only under consideration.
People Sentiments Mixed
- Pennon said the capital raise would help fund about £1 billion of additional investment in its regulated water business.