For once Owl is lost for words.

Susan Davy, Chief Executive Pennon Group, is quoted as justifying the payout because: “we have delivered improvements in environmental performance, building on our sector leading 100pc water quality for our 860 miles of coastline and on track to reduce our use of storm overflows by 50pc by 2025.”

Simultaneously, she has been setting herself up as an environmental champion to lead a community response to the climate crisis, with particular reference to water supply. See what is described as her “advertorial” here: www.devonlive.com 

“….while climate change is a global issue, it has many local and community impacts, and working together with our customers and our communities holds the key to making the most difference.

“As the largest private employer and business in the region, Pennon takes its societal contribution extremely seriously….

“…We continue to invest in innovative solutions to mitigate the impacts of the drought, from repurposing ex-quarries to provide new water resources, to fixing customer-side leaks for free, launching pioneering initiatives such as Save Every Drop, and encouraging everyone to think differently about water usage…”

[Extremely seriously, how much water leaks away before it ever gets to our taps? – Owl]

South West Water pays £112m to shareholders amid sewage leak backlash

The owner of one of Britain’s biggest water companies has rewarded investors with an £112m dividend despite profits plunging and an ongoing probe into its alleged failure to report sewage leaks. 

By Oliver Gill, Chief Business Correspondent www.telegraph.co.uk 

Pennon Group, the FTSE 100 company that owns South West Water, said shareholder dividends would increase by 10.9pc.

The company highlighted that the dividend rise was 2pc higher than inflation, as measured by the Consumer Price Index including housing costs.

The 42.73p-a-share dividend amounts to £112m. It leaves Pennon with just £144m of cash reserves, compared with almost £2.7bn two years ago.

Pennon posted an £8.5m pre-tax loss on £797m of revenue for the year ending 31 March. Last year it made £128m in profit.

The results come as Pennon, which also owns Bristol Water, faces an investigation by the industry regulator examining whether its reporting of leaks and water use was accurate. 

Water companies must show that they are tackling leaks and keeping household water consumption down in accordance with rules laid down by regulator Ofwat.

David Black, the chief executive of Ofwat, said on Wednesday that a “thorough investigation will now be carried out and we will provide updates in due course on our findings and whether there is any further action Ofwat needs to take”.

Pennon responded to the investigation by saying that the figures were “subject to rigorous assurance processes” and signed off by a technical auditor.

Susan Davy, Pennon chief executive, said that the company’s annual loss followed “an extraordinary year for Pennon in which extreme weather patterns have tested our operational resilience”.

She added: “In a year in which the sector has been rightly challenged to clean up its act, we have delivered improvements in environmental performance, building on our sector leading 100pc water quality for our 860 miles of coastline and on track to reduce our use of storm overflows by 50pc by 2025. 

“I am also clear that one pollution is one too many, and numbers are falling as we implement sustained change.”

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said that high power and inflation-related costs were responsible for eroding Pennon’s profits.

He added: “But cashflows are getting squeezed by higher investment levels as the group aims to shore up its water supplies for the year. Unseasonably dry winter weather means the drought status in southwest England remains in place. 

“As summertime nears, it’s touch-and-go whether reservoir levels will be sufficient to keep customers’ supplies running at full flow. If not, Pennon could find itself in the regulator’s firing line.”