Southern Water has outlined its position on dividends and corporate structure, saying no dividends were paid to external shareholders in 2017-18 and that a redundant Cayman Islands subsidiary will be dismantled.

Southern Water is owned by both UK and international investors - mainly pension funds who seek a low risk, reliable return which utility companies around the world generally provide. The water company commented:

“Having a broad investor base including foreign investors is an important part in demonstrating to lenders and regulators that we have a stable structure which provides them with security and confidence.”

All of the company’s operations are in the UK and all companies in the group are UK domiciled for tax purposes – the water company paid £69.7 million to the Exchequer last year.

No dividend was paid to external investors - off-shore or otherwise: An £8 million dividend paid by Southern Water Services was made in order to service group debt and didnot go to shareholders.

A further £46.1 million dividend paid by Southern Water to another group company was repaid prior to financial year end resulting in no cash movement.

Southern Water said it does have a redundant Cayman Islands subsidiary established as a result of regulations which made it impossible for non-PLCs to issue bonds. It has never had a tax benefit for Southern Water and will be dismantled by the year end.