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South Staffs Grp PLC (SSF)

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Wednesday 12 December, 2001

South Staffs Grp PLC

Re Joint Venture

South Staffordshire Group PLC
12 December 2001

South Staffordshire Group Plc and Pennon Group Plc announce a customer service
joint venture agreement

South Staffordshire Group Plc and Pennon Group Plc announce the formation of a
joint venture company between their subsidiaries Echo Managed Services Ltd
('Echo') and South West Water Limited ('SWW'). The new venture, Echo South
West, will provide customer contact and billing services for SWW's 1.5 million
customers in Devon, Cornwall and parts of Somerset and Dorset and establishes
a commercial foothold in the region for customer service provision to third
parties.

Echo South West will be owned equally by SWW and Echo and will provide
services to SWW with contract revenues of £30 million over four years. The
operation will be based in Exeter and will involve the transfer of staff from
SWW's existing customer service function. In the next twelve months the
business will be implementing the RAPID customer service and billing system
acquired by SWW from South Staffordshire Group earlier this year.

Bob Baty, Chief Executive of South West Water Limited said, 'The new venture
will help South West Water achieve even higher levels of customer service and
satisfaction and will also help us meet the challenging operating cost targets
set by Ofwat. We are impressed by the commercial approach that Echo has
developed and we are confident additional income streams will be generated as
new business is gained. The joint venture will also provide the potential for
future job creation in the region'.

Brian Whitty, Chief Executive of South Staffordshire Group said 'I am
delighted that Pennon has decided to work with us in developing our Echo
business in the South West of England. SWW is rated in OFWAT's highest
category for customer contact and billing and will therefore be a valuable
partner in our customer service business in the region. This is an important
step for both Echo towards achieving its goal of being a national multi site
operation and for South Staffordshire Group as it continues to develop its
support services businesses'.

For further information please contact :

Brian Whitty, Chief Executive - South Staffordshire Group Plc on 01922 618000

Bob Baty, Chief Executive - Pennon Group Plc on 01392 443035



Notes

Echo Managed Services is part of the South Staffordshire Group Plc (SSG). SSG
has recently been re-listed from the Water Sector to Support Services in line
with its 4 divisions - Home Service, Onsite, South Staffordshire Water and
Customer Solutions.

Echo Managed Services Ltd was established in April 2001 and provides customer
service solutions to a wide range of sectors. Services include Billing, Debt
Recovery, multi-media contact centres, Order Processing and Field Support.
Although relatively young the company already provides services to South
Staffordshire Water, Severn Trent, Datapol, Stirling Recruitment and Giraffe
Marketing.

SSG Interim results have been announced showing an increase in turnover of 15%
to £78.6 m (2000 £68.7 m) and an increase in profit by 11% to £15.1 m 
(2000 £13.7 m). SSG employs 1800 people.