South East Water has warned that there is \u201cmaterial uncertainty\u201d over its survival, after a disastrous year in which the lossmaking company paid millions of pounds in fines and its chief executive was forced out.<\/p>\n
The water supplier to 2.4 million customers said it had sufficient funds to make it through to July 2027. However, \u201cshortly after\u201d it will need \u201cnew loan facilities in order to continue as a going concern,\u201d the company said in its annual report published on Friday.<\/p>\n
South East Water, which serves customers across Kent, Sussex, Surrey, Hampshire and Berkshire, added that \u201cdiscussions with lenders to provide funds are at an advanced stage and are expected to conclude over summer 2026\u201d but were not legally committed.<\/p>\n
The company has gone through one of the worst years since privatisation in 1989, with a series of outages that infuriated customers and politicians<\/a>. Its chair, Chris Train<\/a>, and chief executive, David Hinton, were both forced to resign<\/a> after months of criticism over company\u2019s response to major supply failures in Kent and Sussex between November and January.<\/p>\n Ofwat, the regulator for water companies in England and Wales, this week said South East will pay a \u00a330.5m redress package<\/a> related to those and other outages \u2013 putting further pressure on its finances.<\/p>\n Its struggles underline the challenge the water industry poses for Andy Burnham, with the incoming prime minister considering putting Thames Water into special administration, a form of temporary nationalisation.<\/p>\n South East\u2019s directors said that because new funds from shareholders are not yet legally committed \u201cwe concluded that (sic) the risk that the funding will not be received constituted a material uncertainty\u201d.<\/p>\n Its annual report revealed that losses had widened to \u00a333m, up from \u00a314m last year. That came despite revenues soaring from \u00a3285m to \u00a3352m after Ofwat allowed it to increase bills by 7%.<\/p>\n Despite that performance, the annual report showed that Hinton\u2019s pay increased compared with the previous year. He received \u00a3488,000 in total pay, even after forgoing his bonus under pressure from MPs \u2013 up from \u00a3458,000 the previous year.<\/p>\n Hinton\u2019s resignation meant he will not be paid a heavily criticised \u00a3400,000 \u201cservice award\u201d<\/a> if he had made it to July 2030.<\/p>\n