Pennon reveals cost of crypto outbreak

Dealing with the outbreak of cryptosporidium in Brixham over the summer cost Pennon Group £16m, the company revealed in a trading update for the period up to 26 September. This covered the costs of extensive interventions to clean the network, customer compensation and the provision of bottled water over eight weeks.

The company spent a further exceptional £16m on restructuring costs for “transformational programmes to reshape the business” which covered operations, customer services and procurement, with a view to unlocking £86m of savings in AMP8. Pennon said the integration of SES Water and Bristol Water were on track, with phase 1 of SES securing 10% of the identified savings, and Bristol entering the final phase and on track to deliver the £20m per annum efficiency savings targeted for 2024/25.

Elsewhere the trading statement was mostly upbeat, including to mention South West Water’s ‘outstanding’ PR24 business plan categorisation by Ofwat and associated 30% RCV growth; the CMA’s clearance of the SES acquisition; the launch of a £2.5bn Euro Medium Term Note programme with an inaugural £400m public bond issuance; and a strong water resources position including supply diversification in Cornwall and innovative tariff trials.

On the downside, South West Water is targeting only a two-star Environmental Performance Assessment rating, with high rainfall affecting pollution numbers and storm overflow spills. On the latter, the company said though that its interventions had removed two thirds of its highest spillers from 2023 and that average spills to bathing waters during the bathing season were at one of the lowest levels since 2016.

Half year results will be announced on 27 November.