Final Results
11 Junho 2009 - 3:00AM
UK Regulatory
TIDM52IP
RNS Number : 7142T
Welsh Water Utilities Finance PLC
11 June 2009
NEWS FROM WELSH WATER
Preliminary Financial Results for the year to 31 March 2009
Record investment as Welsh Water helps
customers cope with recession
Despite the increasingly difficult economic environment, Welsh Water, the
not-for-profit company owned by Glas Cymru, reported a year of continued good
progress in operational and environmental performance and in customer service,
raising its 'customer dividend' to GBP21 per customer.
Glas Cymru is unique amongst UK utility companies in that it has no shareholders
and all its financial surpluses are used for the benefit of Welsh Water's
customers.Since 2001, it has returned some GBP150 million through its annual
'customer dividend' - it is the only water company to give a 'customer dividend'
in this way.
Welsh Water also reported a strong financial position, its biggest ever capital
investment programme and increased help for customers.
Glas Cymru Chairman Lord Burns said, "Welsh Water has responded positively to
the challenges of the current economic recession. We have put affordability at
the heart of all our plans and have introduced a range of innovative measures
designed to help many of those customers who are struggling to pay their bills."
"Having built up a strong financial position over the last seven years, we have
been able to afford to press ahead with our largest ever capital investment
programme, with over GBP355 million spent on projects during 2008-09 - an 18%
increase on the previous year. Our robust financial position means that all our
customers will continue to see the benefits of our unique business model in the
years ahead," he added.
Highlights for the year include:
* 'Customer dividend' in 2008-09 of GBP21 per customer totalling GBP27 million
(2007-08: GBP20 per customer, totalling GBP26 million). The 'customer dividend'
has increased steadily since it was first introduced in 2003 at GBP9 per
customer.
* Welsh Water Assist tariff introduced on a trial basis which, combined with the
existing Water Direct and Water Collect tariffs and the Welsh Water Customer
Assistance Fund, offers a range of support for many customers struggling to pay
their water bills.
* Capital investment of GBP355 million (2007-08: GBP301 million) - a record level
which will benefit customer service, environmental performance and drinking
water quality.
* Significant improvement in important aspects of environmental performance in
2008, including 100% compliance at wastewater treatment works (2007: 99.1%).
* Robust financial position, with gearing at 72% (2008: 72%) - as against 93% when
Welsh Water was acquired by Glas Cymru in May 2001.
During the year, Welsh Water had to cope with some unusual operating challenges,
including new threats to drinking water quality in North Wales, which required
two precautionary boil water notices, and the impact of the very cold spell last
winter, during which we needed to fix some 100 bursts and leaks a day.
Welsh Water has also published its plans for the period 2010 to 2015, in which
it proposes to maintain a high level of capital expenditure, including important
investments to enhance the protection of drinking water quality, mitigate the
worst impacts of sewer flooding, substantially reduce the carbon footprint of
its activities and improve customer service. All this is to be achieved with the
average household customer's bill in 2015 being the same in real terms as it is
today. According to Ofwat research, over 90% of Welsh Water's customers
endorsed its draft business plan which was released last summer.
The results in detail:
Financial results:
* Having given a 'customer dividend' of GBP27 million, the loss before taxation
(excluding the fair value movements on financial instruments) was GBP11 million
(2007-08: profit of GBP11 million, having given a 'customer dividend' of GBP26
million).
* The impact of reduced consumption amounted to GBP3 million during the year, with
demand from our business customers down some 3%.
* Operational costs of GBP267 million (2007-08: GBP234 million), an underlying
increase in real terms of some GBP25 million, mainly due to increased power
costs of GBP13 million and an increase of GBP6 million in the provision for bad
debts.
* Net debt of 72% of Regulatory Capital Value (RCV) (2008: 72%).
* A robust liquidity position, with GBP559 million of cash and undrawn bank loans
as at 31 March 2009, meaning that the business is well funded to 2010 and
beyond.
* Strong credit ratings, with the senior bonds being rated 'A' by Standard and
Poor's and Fitch Ratings, and 'A3' by Moody's.
Operational performance
* Continued high level of water quality compliance - 99.95% mean zonal
compliance (2007: 99.93%).
* 100% compliance at wastewater treatment works (2007: 99.1%).
* Category 1 and 2 pollution incidents reduced to 3 (2007: 9 incidents).
* In the 2009 summer season, Wales has 43 Blue Flag beaches and marinas (2008: 47
Blue Flags), over a third of the UK total.
* Achieved the leakage target set by Ofwat for 2008-09, despite the effects of the
very cold weather this winter, when some 100 leaks and bursts were repaired
every day.
* Continuing high customer satisfaction, as measured by independent tracking
research.
Major capital investment programme:
* Capital investment of GBP355 million (2007-08: GBP301 million) benefiting
customer service, environmental quality and drinking water quality.
* Total capital investment since April 2005 of GBP1,162 million (equivalent to
some GBP1,000 of investment for every household served).
* Good progress in delivering our enhanced drinking water quality protection
programme, with ultraviolet disinfection operational at 12 sites and additional
stages of treatment being built at 9 sites, predominantly in north Wales.
The full results are available on Welsh Water's website www.dwrcymru.com
Ends
Notes for Editors:
1. Glas Cymru was formed in April 2000 for the sole purpose of acquiring Welsh
Water. It is a 'company limited by guarantee' registered under the Companies Act
1985. Glas Cymru has no shareholders. Instead, Members carry out an important
corporate governance role but they do not receive dividends nor do they have any
other financial interest in the Company. This corporate structure ensures that
all financial surpluses generated are retained and reinvested for the benefit of
Welsh Water and its customers.
2. Glas Cymru's constitution strictly limits its purpose to that of financing water
assets in Welsh Water's area of appointment and managing Welsh Water's business
so that high quality water and sewerage services are delivered at least cost to
the communities served by Welsh Water. Glas Cymru cannot diversify into other
unrelated commercial activities.
3. Welsh Water outsources the provision of operational and customer services and
the delivery of its investment programme. By working closely in a partnership
framework with industry specialists, we aim to deliver improving business
performance and customer benefits.
4. Welsh Water has recently introduced new customer tariffs, unique in the UK water
industry, which provide assistance to some customers who experience difficulty
in paying their water charges. These include capped charges for a specific group
of customers with low income and high water use, and a range of collection
methods that include a discount for direct payment from benefits.
5. Consistent, independent research of customer opinion carried out by Beaufort
Research shows that customer satisfaction with the service provided by Welsh
Water remains stable at very high levels - with nearly 80% of customers being
either 'fairly satisfied' or 'very satisfied'. Customers rate the value for
money provided by Welsh Water as being above that provided by other utility
companies in Wales covered by the survey.
Enquiries to the Dwr Cymru Welsh Water press office on 029 2055 6140
This information is provided by RNS
The company news service from the London Stock Exchange
END
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