Millions of households put on high alert as crisis-hit water firm warns it could run out of cash

MILLIONS of households have been put on high alert after a major water company warned it could run out of cash. South East Water, which supplies around 2.3million customers across the south east of England, said it needs to secure fresh financing to stay afloat. The firm confirmed it took a £55million hit after a string of outages over the winter left tens of thousands without running water. It said it has enough cash to keep going until July 2027, but admitted it will need more financing “shortly after” that. Sign up for the Money newsletter Thank you! In its annual report, the company said: “Shortly after the going concern period it will be necessary to secure new loan facilities in order to continue as a going concern.” It added: “The severe but plausible downside case… would indicate a need for further financing towards the end of the financial year.” The warning means there are now doubts over the firm’s ability to keep operating without fresh funding. However, South East Water said talks with lenders are in the “late stages” and are expected to conclude over the summer. The supplier described the past year as “tough operationally and financially”, pointing to a 2025 summer drought and two major incidents in December and January. It said: “The operational challenges of the 2025 summer drought and the two major incidents in December 2025 and January 2026 resulted in significant additional costs.” Most read in Money More than 77,000 customers were left with no water, low pressure or intermittent supplies during the winter incidents, caused by leaks, bursts and storm-related power cuts. Schools were forced to close and some customers struggled with medical conditions as a result, according to regulator Ofwat. South East Water’s shareholders are also funding a £30.5million redress package agreed with Ofwat that will go towards improving the network in the affected local areas. 3 comments3