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Welcome to our Annual Report and Financial Statements 2023–24

We are committed to making sure our customers have access to high-quality, affordable and efficient water and wastewater services, while we protect and enhance our communities and the environment.

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We provide essential water services to 2.7 million customers and wastewater services to more than 4.7 million customers across Kent, Sussex, Hampshire and the Isle of Wight.

Every day we supply 570 million litres of water, along 13,973km of network via 635 pumping stations, and remove 1,522 million litres of wastewater along a 40,058 km network via 3,519 pumping stations.

Our purpose

Our purpose is to provide water for life to:

1

Enhance health and wellbeing

Supporting our customers, employees and communities in the South East.
2

Protect and improve the environment

Ensuring a sustainable and resilient water future.
3

Sustain the economy

Promoting innovation and a holistic approach to planning.
1

Enhance health and wellbeing

Supporting our customers, employees and communities in the South East.
2

Protect and improve the environment

Ensuring a sustainable and resilient water future.
3

Sustain the economy

Promoting innovation and a holistic approach to planning.

Our vision and values

We are working to create a resilient water future for our customers in the South East.

Our vision, purpose and values, alongside our ethical decision making and modern compliance frameworks, help our leadership team, employees and partners make better decisions every day.

Succeeding together

Doing the
right thing

Always improving

Working with care

Financial highlights

Revenue (£m)

Revenue increased to £859.4 million (2023: £792.5 million). This is principally due to the application of inflationary increases, totalling £56.3 million, in line with the allowances set by Ofwat and the application of lower penalties for Outcome Delivery Incentives (ODI) to our revenues offset by lower consumption and changes to our tariffs to support customers.

823.5

21-22

792.5

22-23

859.4

23-24

Profit/(loss) before interest and tax (£m)

As a result of the increase in operating costs and depreciation, we incurred an operating loss of £72.8 million (2023: £18.4 million loss).

17.6

21-22

(11.9)

22-23

(72.3)

23-24

Capital investment (£m)

Through our capital delivery programme, we invested a record £828 million in our network and assets.

632.9

21-22

737.5

22-23

828.1

23-24

Non-current assets excluding dept (£m)

At the end of the year to 31 March 2024, we had non-current assets (excluding dept) of £7,678.2 million (2023: £7,213.9 million), an increase of £464.3 million from March 2023. This increase largely results from our ongoing capital investment programme.

6,853.4

21-22

7,213.9

22-23

7,678.2

23-24

Net debt (£m)

The net debt to RCV ratio is calculated as the ratio of net debt (short and long-term senior borrowings, less cash and short-term deposits) to the RCV 

(6,003.6)

21-22

(5,676.6)

22-23

(6,163.8)

23-24

Return on capital employed (%)

0.3

21-22

(0.2)

22-23

(1.0)

23-24

A new recycling project to solve water scarcity in the South East

Over the next 10 years we're investing in water recycling to solve the growing issue of water scarcity across the South East.

Read case study
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Our Clean Rivers and Seas Plan in action

Our plan provides our customers and stakeholders with a simple map clearly showing what we're doing in their area to reduce the use of storm overflows. We are investing £1.5 billion between 2025–35.

Read case study
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Improving the reliability of water supplies

Delivering a reliable supply of water is our top priority. Find out how we're achieving this through our programme of reservoir and tank inspection and cleaning.

Read case study
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Southern Water And South Western Water Have This Morning Been Slammed Over Their Environmental Record Which The Sector Watchdog Called Consistently Unacceptable 1321498927 (1)

Operational performance

Our Water for Life Business Plan 2020–25 is broad and ambitious and includes 47 clear customer commitments. We 
recognise that performance needs to be improved for our customers and the environment and we have detailed plans in 
place to do this. Our Turnaround Plan, our service commitment to customers, explicitly targets improvements in health and 
safety, capability, systems and technology, resilience of our assets, digitalisation, logistics, compliance and customer service.

Our priority areas

A reliable supply of water for our customers:

Safeguarding resources and making sure our customers have access to a supply of high quality water now and into the future.

Trusted and easy customer service:

Supporting our customers with easy service and transparent communications that show we care for our communities.

Healthy rivers and seas:

Protecting and improving the environment, working transparently to enhance inland and coastal habitats.

Empowered and supported colleagues:

Supporting our customers with easy service and transparent communications that show we care for our communities.

A reliable supply of water for our customers:

Safeguarding resources and making sure our customers have access to a supply of high quality water now and into the future.

Trusted and easy customer service:

Supporting our customers with easy service and transparent communications that show we care for our communities.

Healthy rivers and seas:

Protecting and improving the environment, working transparently to enhance inland and coastal habitats.

Empowered and supported colleagues:

Supporting our customers with easy service and transparent communications that show we care for our communities.

Statements: Chair Chief Executive
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Chair's statement

"As you will see from the Q&A with our CEO Lawrence on pages 13 to 18, more than a year on from the publication of its Turnaround Plan, Southern Water is starting to see an improvement in performance. With more than 2,600 colleagues, and many more supply chain partners, working to a clear set of customer priorities, the Executive has focused teams across the business on building more resilience into operations, reducing total pollutions, improving water quality and our wastewater treatment works’ compliance record. 

There are some key areas where our 2020–25 targets remain challenging but the Turnaround Plan – supported with further significant additional funding from our largest shareholder, Macquarie, bringing our total capital investment to over £3 billion for this asset management period – is delivering a step change to prepare our business to deliver our ambitious plans for the next investment period to 2030 and beyond."

- Keith Lough, Chair

Keith Lough, Chair, Southern Water

Chief Executive's statement

"Our performance has significantly improved in critical areas like total pollutions, water quality and compliance, see page 19 for an overview. While we will still have challenges in meeting some of the stretching targets set for this investment period, every Southern Water colleague and our partners – engineers, scientists, operators, analysts and office-based teams alike – is committed to continuing to build on this improvement.

We are transparent about our performance. I want to start by highlighting that we are reporting another year of financial loss as a business due to the investments we have made to improve services for customers and the environment, and no dividends have been paid to our shareholders. At the same time, our shareholders have injected a total of around £1.6 billion into the Southern Water group to support our turnaround, helping us to manage above inflation costs, and invest more to improve our performance."

- Lawrence Gosden, CEO

Lawrence Gosden CEO Southern Water

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