Pennon Launches £550m Rights Issue and Cuts Dividend to Fund Investment

Pennon Group, the British water utility, has launched a fully underwritten £550 million rights issue and reduced its dividend as it seeks to repair its regulated water operations and step up investment.

The company, which owns South West Water and SES Water, said on Wednesday the capital raise would help fund roughly £1 billion of additional investment. The move forms part of a broader operational reset under new chief executive Keith Haslett, Reuters reported.

Capital expenditure across the regulated water business over the current five-year asset management period to March 2030 is now expected to reach about £3.6 billion — roughly £1 billion above the original plan.

Pennon also said it is weighing the sale of Pennon Power, its renewables arm, to sharpen its focus on the core water business and trim a debt pile that stood at £4.51 billion at the end of March.

The total dividend for 2026/27 has been reduced to around £125 million from £138 million last year, implying an approximate 30 per cent cut per share.

The announcement lands amid heavy scrutiny of England’s water sector over environmental breaches, high dividends and rising bills, weeks after prime minister Andy Burnham said in September he would legislate to repeal the ban on public ownership of water companies.

Sources: Reuters