Southern Water: Shareholders invest more money into company

Funds managed by Macquarie Asset Management will be used to provide the Southern Water group with extra equity on top of the £1.1bn it received in 2021.

Southern is the latest water company to seek extra cash as fears grow about the sector's financial health.

Firms are struggling to cope with a combined debt burden of £60bn and rising energy costs caused by sky-high inflation.

Southern Water has been given a further £550m to help shore up its finances and improve its performance (Image: Southern Water)

The extra investment in Southern Water will enable it to spend more money on boosting its performance. The sum is set to rise from £2bn to £3bn, the equivalent of £1,500 per household.

A company spokesperson said a large chunk of the £550m would go towards bolstering its Turnaround Plan.

They added: "This is focused on ensuring a reliable supply of water for our customers, protecting and improving the health of rivers and seas by building the capacity and resilience at our wastewater treatment works and sewer network."

Southern Water says it is determined to reduce the number of storm overflows - the practice of discharging sewage into rivers during heavy rain.

"We continue to roll out engineering and nature-based solutions to tackle this problem across our region," said the spokesperson.

"Redesigning this Victorian legacy system will take time, huge investment, and close partnership working – but we are committed to driving down their use."

"We were awarded a two-star environmental performance assessment rating by the Environment Agency for 2022, up from one-star for 2021.

"We recognise we have further to go and the Turnaround Plan sets out our ambition to reach a three-star rating by 2025."

Southern Water's wastewater treatment works at Ashlett Creek, near Fawley (Image: Southern Water)

Chief executive Lawrence Gosden said Macquarie's continued support would enable the company to increase investment per household and manage the impact of higher costs.

"Macquarie’s additional investment is a strong vote of confidence in our operational transformation," he said.

Southern Water has installed 24,000 sensors that provide real-time monitoring of its sewer network, improving the company's ability to detect and fix issues as soon as they occur.

The spokesperson said: "Southern Water now has one of the highest rates of storm overflow monitoring in the UK - 99 per cent.

"We have continued to improve the operational performance and compliance of our pumping stations and treatment works, reducing serious pollution incidents by 58 per cent in 2022.

"We have maintained water leakage at 17 per cent, compared to the UK industry average of 23 per cent."