South East Water, which is currently being investigated by regulator Ofwat, said today that it paid £2.25 million in dividends for six months of this year.
The dividend payments come as the UK’s largest supplier Thames Water faces a probe into its 2023 dividend payments from the water regulator.
Thames Water will undergo an investigation into £37 million of internal dividends it made to its parent company in the year ending March 31, 2022.
Oftwat said this week that it will investigate the dividend payments, which Thames Water said were paid to the parent entity to pay down debts.
Thames Water said this week that a turnaround of its business is expected to take three years before it regains a solid financial footing, after narrowly avoiding a government takeover.
Its profits fell 54% to £245 million in the six months to September, as net debts at the country’s biggest water supplier increased by 7% to £14.7 billion.
South East Water said today that it shelled out £2.25 million in dividends for the six months to 30 September, half of the £4.5 million it paid to investors a year ago.
It said the payments represent a nominal dividend yield of 0.9% and “was lower than Ofwat's view of what is a reasonable nominal dividend yield, which is 4 per cent”.
The water company said it is under “severe pressure” from the long-term impact of the Covid-19 pandemic and that it submitted its next business plan to the regulator for the next five years, which includes a proposal to invest £1.9 billion in the water network.