South East Water pays £9m dividend – despite imposing a hosepipe ban and falling to a £74.2m loss

The water company responsible for the summer’s first water supply ban has showered shareholders with a multi-million pound dividend – despite reporting a huge loss.

South East Water, whose boss David Hinton has blamed working from home for the water shortage, will pay £9 million to owners.

Hinton, meanwhile, received a bonus of £105,000 – less than half of last year, but he still has a total salary package of £417,000.

The company serves 2.3 million customers in Hampshire, Berkshire, Surrey, Sussex and Kent.

South East Water slipped to a loss of £74.2m for the year to the end of March as the cost of paying off its £1.3bn mountain of debt increased by £49.9m to £117.5m.

That was because much of the debt is index-linked, meaning that the cost of paying back the debt rises as inflation rises.

The company said high inflation and rising interest rates have “significantly increased the challenges we face and will face in the years to come.”

The losses were also partly attributed to ‘extreme weather’ costing £17 million, including an ‘unprecedented’ heat wave, relentless rainfall causing flooding and power cuts, as well as a ‘freeze-thaw’ event in December.

South East Water said the immediate response to the weather, such as buying new water, cost it £6.6 million.

The group incurred a further £4.9m in repairing leaks and burst pipes, and also paid customers £5.5m in compensation.

The company said it was experiencing the driest conditions in Kent since records began in 1836, and the least rainfall in Sussex since 1911.

In addition, the demand for water was unprecedentedly high during the warmer weeks.

An £8.4m increase in energy prices also took its toll on profits.

Meanwhile, the company admitted that it had fallen short of annual leakage targets. It was losing a whopping 94.5 million gallons of water per day on a three-year rolling average against a target of 93.2 million gallons.

South East Water – which is owned by a consortium of Australian, French and British investors – imposed a garden hose ban on customers in Kent and Sussex last month.

Hinton said in a letter to clients that working from home was a “key factor” behind the region’s shortages, as it had “increased demand for drinking water.”

The company also left thousands of customers in Tunbridge Wells and surrounding villages without running water for days leading up to last Christmas.

Tunbridge Wells MP Greg Clark said in parliament that many were left to “conditions of stress and, quite frankly, misery” and blamed a “catalogue of failures that exposed a network lacking the resilience needed to do the job or provide reliable water.”

The results come amid increased scrutiny of Britain’s water utilities.

Thames Water, the country’s largest supplier, is in crisis talks with the government to secure funding after debt rises to £14bn.