Comment: Ofwat criticism was about how we paid dividends, not how we deliver our service says Portsmouth Water CEO

We are also hugely disappointed that Ofwat has singled us out in their report and will be taking this up with them in due course. But the Ofwat ‘concern’ with Portsmouth Water is over one issue, dividend, and there is a very simple explanation.

In a nutshell, when Covid took hold, we were unaware of the scale of financial impact this would have on our business – and in order to mitigate impact we stopped paying an annual dividend to our owners, one of a raft of measures taken at that time including the freezing of manager and director salaries. Once Covid was over, we restarted dividend payments when we were confident of recovery – as a result, in the last financial year we paid a higher dividend than in previous years as the dividend included payments relating to two years, the year ending March 31, 2020 and the year ended March 31, 2021. During both of these years, and in spite of lockdown, we delivered a consistently high level of service to our customer, delivering industry leading performance on supply interruptions, leakage, and customer services, for the lowest average bill in the country.

Ofwat have raised concerns that we have not met their expectations to clearly explain how dividends paid had taken into account performance commitments and financial resilience. We had amended our dividend policy to reduce the level of dividends paid in future and include greater transparency on how they relate to service for customers. However, we accept that we could have provided better explanation of the dividends that were declared in our 2021/22 accounts.

We will take action to address Ofwat’s concerns in our policy and accounts for the year ended March 31, 2023.

We are a company that has built its reputation today by ‘doing the right thing’ by our customers and stakeholders; we fully accept that we should have explained ourselves more clearly on what is a very sensitive matter this time but as you can see from this letter, the history shows another real life example of our considerate and sensitive approach towards our customers.