The new chief executive of Pennon Group, which owns South West Water, has stated that the company must work to rebuild trust following a record fine of nearly £2 million for a parasitic outbreak in Devon. Keith Haslett, who took over as CEO on April 1, emphasized the need for the company to learn from the incident after Pennon was prosecuted at Exeter Magistrates' Court for supplying water unfit for human consumption.
Legal and Financial Repercussions
Pennon was fined £1.853 million, along with a surcharge of £2,000 and costs of £75,000, totaling £1.93 million. This came after the water supply in the Brixham area of Devon was contaminated in 2024 with cryptosporidium, a parasite that causes sickness and diarrhea. The company's annual results released on Wednesday showed a return to profit, with pre-tax profits of £114.4 million for the 12 months to March 31, compared to losses of £72.7 million the previous year.
Customer Impact and Future Actions
Mr. Haslett expressed deep sadness over the impact on customers in Brixham and acknowledged the need to rebuild trust. However, the group faces potential further legal action as Devon County Council considers taking steps to address sewage spills and poor water quality. Council leader Councillor Julian Brazil suggested that executives should face surcharges for poor performance. Mr. Haslett declined to comment on the council's plans but said the group respects the legal process.
Focus on Performance Improvement
Mr. Haslett, a veteran in the water industry, emphasized that water quality is paramount and that the company must focus on supplying wholesome drinking water 24/7. He admitted there is significant work to be done to lead the sector in all performance areas. The company reported outcome delivery incentives (ODI) penalties of around £42 million for its water and waste water performance over 2025-26, citing exceptional storms and sustained rainfall.
Investment and Progress
Despite the challenges, Pennon highlighted improvements, with pollution incidents down by 34% and storm overflow use reduced by 17% in 2025-26. The group is investing £3.2 billion over five years to 2030 as part of a plan agreed with Ofwat, with £644 million invested in the past financial year.
