Water group Pennon has announced the purchase of Sutton and East Surrey (SES) Water from its Japanese owners.
Exeter-based Pennon Group, which also owns South West Water, said it had acquired SES Water, which supplies 750,000 customers in the south-east of England, along with other ancillary businesses from Sumitomo Corporation and Osaka Gas. The total price of the deal is £380m.
Exeter-based Pennon also announced a £180mn equity capital raise on Wednesday, to keep the enlarged group’s leverage within a gearing range of 55 to 65 per cent. Pennon said it was paying £89mn for the equity, while SES’s net debt stood at £291mn.
Speaking about the acquisition, Susan Davy, chief executive of Pennon: “It’s a fantastic fit for Pennon as we further expand our presence in water supply across southern England, building on our successful similar acquisitions of Bournemouth Water and Bristol Water alongside the adoption of water supply in the Isles of Scilly.”
Pennon’s Past Performance
Whether or not the purchase is a good fit for current Sutton and East Surrey Water remains to be seen. That’s because Pennon has recently applied for the permission to increase South West Water customers’ bills by 32 per cent by 2030 which will see the average household’s costs rise from £476 to £720 a year, before inflation.
This is before the £50 per year taxpayer subsidy that’s been in place since 2013 to make customers’ bills more affordable.
Moreover, last year, South West Water was fined £2.1mn by the UK’s Environment Agency after it was found to have polluted waters across Devon and Cornwall over a four year period.
South West Water is one of six companies that are currently being investigated due to concerns that it may be breaching sewage regulations. This includes potential illegal discharges at more than 2,000 sewage treatment works.
So with a patchy track record, many households and businesses who are currently customers of SES Water may be concerned about their new supplier.
Thankfully, unlike households which are tied to their local supplier, businesses in the UK have the ability to switch suppliers. So if you’re a business owner and you have reservations about Pennon Group managing your water, perhaps it’s time to think about switching!
If you’re an SES customer then you might be concerned about this news due to Pennon’s past performance and history of trying to raise customer bills.
The service you can expect to receive from your supplier, as well as the amount you pay for your bills, is clearly important to any business owner. If the company you choose to give your hard-earned cash to isn’t performing or there’s a risk they may up your bills unexpectedly, you’re well within your rights to seek out a new deal.
This is why it very often pays to switch business utilities, especially as a business owner. If you own your own company then bringing down the cost of your outgoings is one of your primary concerns, and so is having a reliable supplier to provide your water.
So if you’re on the lookout for a water supplier that meets your needs and preferences, we’re here to help you in your pursuit. As a water broker, we have access to hundreds of different tariffs with dozens of water suppliers across the UK.
We partner with reputable and trusted water suppliers to put you in touch with the best options based on your business’s needs and preferences. So whether you’re looking for the cheapest deal or a company prioritising sustainability, we can help you connect with the company that offers what you’re after.
By explaining to us what you’re looking for in your supplier, we can help you find the best deals on the market, saving you time, money and ensuring you get the service you deserve.
So to find a company with the best service, speak to us today and we’ll help put you in touch with some of the country’s most trustworthy suppliers.