Anglian Water pays £92mn dividend to owners as customer bills rise

Anglian Water, one of the UK’s largest suppliers of water and sewerage services, is paying a £92mn dividend to its owners despite rising customer bills and sewage and pollution failures.

Anglian is Britain’s largest privatised water company by geography, servicing 7mn customers across 13 counties stretching from Lincolnshire to Essex.

It is owned by a group of private equity, sovereign wealth and pension funds including the Abu Dhabi Investment Authority, the Canada Pension Plan Investment Board and IFM Global Infrastructure Fund.

The payout for 2021 comes as customers face a £22 a year bill increase, raising average annual prices from £430 to £452, adding to the rapidly rising cost of living.

Anglian said the dividend, which was announced in the company’s preliminary results for the year until the end of March 2022, marked the first distribution to shareholders since 2017 and brought the net payouts taken since 2010 to “well below the level expected by our regulator”. It has arranged a £65mn package to help vulnerable customers.

The company added that shareholders “have shared our vision of investing today to ensure the long-term resilience of our region”.

“We are pleased to now be in a position to repay their faith in us by sharing our financial returns with them.” 

Ofwat, the industry regulator, has urged companies to link pay to performance as awards to executives and owners have been criticised by MPs across the political spectrum.

England’s regional water monopolies are facing the biggest wave of protests over sewage pollution since they were transferred to private ownership 32 years ago. Just 16 per cent of coastal waterways and rivers in England and Wales meet minimum EU standards because of frequent outflows of untreated effluent and storm water.

Anglian has been fined by the Environment Agency for water pollution three times so far this year, including £300,000 this month for killing 5,000 fish in the River Wid in Essex in 2016. That investigation found that the pumps being used by the group were almost 40 years old.

Peter Simpson, Anglian Water’s chief executive, and Steve Buck, its chief financial officer, were together paid more than £2.2mn in bonuses, as well as their combined base pay of more than £900,000 in 2021, according to company records. Other water company executives have received higher pay — including Liv Garfield, chief executive of Severn Trent, who received £4mn last year.

Anglian Water said its £6bn investment plan for 2020-2025 was its “biggest ever”. It will be paid for through a mix of customer bills and debt.

England is the only country in the world to have fully privatised its water system in a move aimed at bringing investment into the sector. However, most companies have slashed capital investment in critical infrastructure by up to a fifth in the past 30 years, according to research by the Financial Times.

Over the same period the companies — which were sold off with no debt and handed £1.5bn — have borrowed £53bn, the equivalent of around £2,000 per household. Much of that has been used not for new investment but to pay £72bn in dividends.

Anglian Water said it had reduced gearing from 82 per cent to 65 per cent in the year to March 31. Operating costs less financing have risen from £187mn in 2021 to £237.5mmn in 2022.

Feargal Sharkey, an environmental protester, said: “Anglian has no shame. At a time when many people are struggling with the cost of living, we are being forced to pay for these fat-cat dividends and salaries through our water bills.

“Not only are they making off with our money like bandits, they are polluting our rivers and depleting our future water supplies — even though our lives depend on them.”