Ten out of 16 companies cause Ofwat financial resilience concern

Ten companies caused Ofwat concern in terms of financial resilience in 2023-24, according to the regulator’s latest Monitoring financial resilience report (see table).
Three ‘require action’ – most prominently and predictably Thames Water, but also Southern Water and South East Water, all resident in this category from last year. These firms are subject to close regulatory monitoring and engagement – in Thames’ case, including an independent monitor reporting back.
The other seven are of ‘elevated concern’ and may require action. Affinity, Northumbrian, Portsmouth and Yorkshire Water remained in this category from last year. They were joined by South Staffs and Wessex which were escalated up from ‘standard,’ and SES Water, which more positively was moved down from ‘require action’.
Only six are in the clear and not causing any specific concerns: the listed companies plus Anglian and Welsh Water.
Ofwat said it had made progress in ensuring that any dividends paid by water companies reflect company performance and do not threaten their financial resilience. “Year-on-year, companies paid out £400m less in dividends, a reduction of almost a third (£1 billion vs £1.4 billion). This is due to a range of reasons, with a much clearer link now between dividends and performance. Thames Water, South East Water and Southern Water are also subject to cash lock-up measures which prohibits them from paying dividends without consent.”
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