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Water company plans £89m shareholder payout despite sewage conviction

gushing water from a household water tap
gushing water from a household water tap

One of Britain’s biggest water companies is planning to pay shareholders a £89m dividend despite being convicted this month for failing to provide records related to its sewage works.

Anglian Water, which has more than 6m customers in the East of England and Hartlepool, announced the payout in its latest results earlier this month, just weeks after it was convicted by the Environment Agency.

The supplier was found guilty by Peterborough magistrates’ court of not complying with a requirement to provide financial records for its wastewater treatment works, with sentencing to be confirmed next month.

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A spokesman for the Environment Agency confirmed that Anglian’s maximum punishment is an unlimited fine.

The verdict came after Anglian Water was fined £2.65m in May last year for allowing untreated sewage to overflow into the North Sea in 2018. However, the fine was later reduced to £300,000 by a judge.

Despite this, Anglian Water has laid out its plans to reward investors with an £88.6m dividend this month, which is higher than the £79.9m handed out in 2023.

Details of the payment were contained in the latest filings for the foreign-owned business, which is divided across a sprawling network of different entities.

The board said it had approved the dividend after assessing a range of matters, including “service delivery for customers and the environment”.

Following its conviction, the Environment Agency said it had brought the case against Anglian as part of a “wider criminal investigation involving all 10 water companies into potential non-compliance with environmental permit conditions at over 2,000 wastewater treatment works”.

This forms part of a broader clampdown on the water sector, which is under increasing scrutiny amid rising sewage spills and leakage problems.

To tackle the problem, water companies are currently seeking to increase household bills to boost investment. This includes Anglian, which has asked regulator Ofwat to increase annual household bills by 29pc to £682 over the next five years.

The chief executive of Anglian Water, Peter Simpson, confirmed earlier this year that he will waive his 2024 bonus in recognition of the supplier’s ailing environmental performance.

An Anglian Water spokesman said: “We’re pleased the judge has said our course of action and time taken to respond with data to the Environment Agency was reasonable. These were the two most serious allegations for obstruction.

“On the third count, we have received the judge’s draft sentencing remarks and will now take the opportunity to review the basis of the sentence.”