Yahoo Finance Devon parasite outbreak: anger as South West Water increases dividend
The owner of South West Water has said normal service has been restored for 85% of its customers after unsafe drinking water led to more than 100 cases of a waterborne disease in Devon, as it raised its dividend payout to shareholders.
After cryptosporidium, a disease that can cause unpleasant symptoms such as diarrhoea and vomiting, was detected in the water supply in the Brixham area of Devon last Wednesday, 17,000 households and businesses were told by South West Water not to use their tap water for drinking without boiling and cooling it first.
Pennon Group, the owner of South West Water, said it had offered all customers issued with a notice to boil water compensation of £215 a household via a bank payment or bill credit, costing it £3.5m.
The UK Health Security Agency has confirmed 46 cases of cryptosporidium infection in the Brixham area, while more than 100 other people have reported symptoms, including diarrhoea, stomach pains and dehydration.
Two people were taken to hospital after the parasite outbreak, the environment secretary, Steve Barclay, confirmed on Monday, saying that situation had caused “considerable concern and disruption to the local community”. Hospitality and tourism businesses in Devon have had bookings cancelled.
On Saturday, South West Water lifted the boil water notice for 14,500 properties in Brixham but apologised after including 28 properties whose water supply was still not safe, causing anger among residents. They were told they could drink tap water, only to receive another message hours later advising them to keep boiling it.
The company blamed a problem with its digital map system for the error and said it offered an extra £75 compensation to people given the wrong advice.
Susan Davy, the chief executive of the FTSE 250-listed Pennon, said: “We are 100% focused on returning a safe water supply to the people and businesses in and around Brixham.
“Normal service has returned for 85% of customers, but we won’t stop until the local drinking water is returned to the quality all our customers expect and deserve.”
She said the company’s operational teams were “working tirelessly around the clock to deliver this”.
Davy added that Pennon had cut its final dividend by £2.4m, equivalent to South West Water’s record court fine last year, “signalling that we are listening”. However, the total dividend payout is still up from last year, at 44.37p a share or £126.9m – compared with £111.7m a year earlier.
Gary Carter, a national officer at the GMB union, said: “These people have no shame. Their water is so dirty it’s literally putting people in hospital, yet the top brass see fit to hand themselves yet another payout.
“They way water companies are behaving – it’s like they actively want the public to hate them. Water privatisation has been a catastrophic failure for this country.”
Anthony Mangnall, the Conservative MP for Totnes, said on X: “Completely unacceptable to see South West Water’s parent group paying out dividends. This tin-eared offering is smack in the face to those who have been so badly impacted by SWW. I suggest that they either suspend the dividend offering or the CEO Susan Davy steps down.”
South West Water provides water and sewage services to 1.8 million residents in Devon, Cornwall and small parts of Dorset and Somerset.
The company was fined £2.15m last April for pumping sewage into rivers and the sea in a series of incidents across Devon and Cornwall over four years, caused by “numerous common deficiencies” in the implementation of that company’s management systems, according to the Environment Agency.
Pennon reported an underlying profit before tax of £16.8m for the year to 31 March, the same as the previous year, and a statutory loss of £9.1m. Underlying revenues rose by 10% to £908m, boosted by inflation-linked bill increases. Its debt pile swelled to £3.5bn as of the end of March, up from £3bn a year earlier.
Analysts expect the company’s revenues to benefit from the increases to bills and also last year’s £380m acquisition of Sutton and East Surrey Water.
