Southern Water is reporting a positive start to AMP8 with further improvements delivered across a number of key operational metrics and a clear Delivery Action Plan to address areas of underperformance, according to its newly released unaudited interim results for the six months ended 30 September 2025.

The water company says six months into its new AMP8 business plan, it is continuing to deliver improvements for customers and the environment, building on the success of its Turnaround Plan - during this period it has already invested £483.6 million.

Schemes already underway include:

• the first new reservoir in the UK for 30 years at Havant Thicket in Hampshire
• number of water recycling plants, including Sandown
• work on the first of two new major pipelines in Southampton and later Andover

Southern Water is continuing to receive support from shareholders who will have injected £2.3 billion into the group since September 2021, including a commitment in July 2025 to invest £655 million of additional equity, £505 million of which was received in November and £150 million which will be paid by March 2026. An update on an additional equity commitment, a minimum of £245 million, is expected before the end of December 2025.

Of the equity received to November 2025, £1.4 billion has flowed into Southern Water, with the remainder used to repay and restructure debt in the utility’s holding companies. According to the report, this equity, along with additional debt financing of over £1.5 billion raised since March 2025, has improved its financial resilience and resulted in S&P removing its CreditWatch from the company’s credit rating.

The Competition and Markets Authority (CMA) provisional determination allows Southern Water an extra £180 million of revenue in the current regulatory period - the firm has increased its customer bills to support the investment needed. The provisional determination has been subject to a period of consultation and the CMA is due to issue its final decision on 17 March 2026.

Operational highlights flagged up in the report include:

• improved proactive maintenance and compliance across the wastewater network – reducing pollutions and flooding – by creating a new asset register, supported by AI-driven health checks.
• installation of a new compliance database and mapping system, increasing visibility of issues on the network to better track risk.
• dentification of a number of high impact interventions to reduce pollution risk, which have been front-end loaded to be completed by January 2026.
• new tankering contract in place, allowing Southern to work more efficiently and react to issues within the sewer network quickly.
• upgrading several key wastewater sites and building a new one at Whitfield - the company is progressing through the projects this year and will invest £11 million.
• work underway on a number of schemes introducing different interventions to slow the flow of surface water entering the network. Southern Water is aiming to invest £262 million this year of £906 million allocated to 2030.
• changing treatment processes at sites to improve water quality with an investment this year of £8 million out of a total £135 million in AMP8
• investing £41 million this year out of a total £367 million spernd in AMP8 to to remove phosphorous. Work started in Tillington in August, and the firm will also be upgrading sites in Coolham, Lower Beeding, and Partridge Green by March 2026. In terms of nitrogen removal projects, £11.6 million of £230 million will be invested this year.
• trial of advanced leak detection tools completed in Kent before further roll out, helping pinpoint larger leaks.
• upgrading five strategic water supply sites, increasing the amount of water they can treat and improving treatment standards. The first year of AMP8 will see an investment of over £44 million of £727 million allocated. Stage one contracts have been set up, with design work under way.

The water company now has more than half of the new contracts in place for the next five-year investment period, to improve overall efficiency in its wastewater operations. Southern has also set up new supplier frameworks and expanded existing ones, to help it deliver sustainable drainage projects more quickly, including a new one with partners in the voluntary sector.

Resilient financial position

Revenue for the period increased to £729.9 million (30 September 2024: £496.2 million) – the increase principally arises from the change in Southern Water’s regulatory tariff following Ofwat’s Final Determination of its AMP8 Business Plan.

Operating costs increased by 10.2% to £543.8 million (30 September 2024: £493.4 million), largely driven by an increase in operating expenditure due to the following principal drivers:

Inflation has increased prices for all existing operational costs by £8.6 million.

The main increases were in contractor and employee related costs - employee costs increased by £6.3 million excluding inflation. Of this £2.3 million was due to the change in employers National Insurance contributions with the remainder due to increased employee numbers, which grew to 3,071 at September 2025 (September 2024: 2,737)

In the period to 30 September 2025, recognition of a bad debt provision charge of £28.0 million (30 September 2024 £12.6 million), an increase of £15.4 million compared to the prior year driven by the increase in revenues.

New costs included:

• appealing Ofwat’s Final Determination on AMP8 plans for 2025–30 to the Competition and Markets Authority - the appeal added £3.2 million to operating costs in the period to September 2025.
• additional work in the period to improve customer service and cash collection performance incurring additional costs of £2.3 million.
• Clean Rivers and Seas Task Force projects to aid the reduction of storm overflows which include initiatives to slow the flow of rainwater into the network. Some of the initiatives do not result in assets that the utility owns and are expensed, incurring £6.0 million of additional operating costs during the period.
• additional chemical dosing costs of £1.6 million were incurred following the completion of capital projects to install equipment to reduce phosphorus and nitrogen levels.

First-half revenue of £729.9m (30 September 2024: £496.2m) was primarily driven by the change in regulatory tariff following Ofwat’s Final Determination in support ofSouthern Water’s AMP8 capital delivery programme

Profit from continuing operations after tax was £39.0m (30 September 2024: loss of £63.1m), reflecting increased revenues to support capital investment programme through to 2030. No dividend has been paid to shareholders since 2017, and none will be before 2030

An additional £655m of equity committed by funds managed by Macquarie Asset Management with an update on additional equity commitment expected before the end of December 2025.

An operating profit of £186.9 million for the period (30 September 2024: £3.8 million); profit from continuing operations after tax was £39.0 million (30 September 2024: loss of £63.1 million)

Overall gross capital expenditure, excluding capitalised interest and asset adoptions, increased to £483.6 million (2024: £459.7 million) including:

• £67.8 million under the Water Industry National Environment Programme to reduce nutrients and improve the quality of shellfish waters,
• £42.7 million in relation to improvements at Southern Water’s four largest water supply works,
• £23.1 million of capital expenditure as part of Clean Rivers and Seas projects
• £47.7 million in relation to long-term projects to improve and secure water resources into the future.

The water company also apologises in the report for the incident at its Eastbourne Treatment Works that occurred in October 2025, which saw up to 10 tonnes of plastic beads which are used in wastewater treatment escape and enter the sea via a 3.4km long outfall pipe.

Lawrence Gosden Chief Executive Officer comments:

“We know that this rare and extremely serious occurrence, caused anger and anxiety to communities along the south east coast. We’re determined to do all we can to put things right, and we recognise this is a long-term, substantial commitment.”

Southern Water has launched an independent investigation into the cause and has commissioned expert advice relating to the longer term impact. The utility continues to work closely with the Environment Agency as part of the clean-up and environmental response.