TIDM53HO
RNS Number : 5082U
South East Water Limited
13 July 2018
South East Water Limited
Preliminary results
for the year to 31 March 2018
Chairman's Statement
On behalf of the Directors of South East Water, I am pleased to
present our annual report and financial statements for the year
ended 31 March 2018. This is the third reporting year of the
current five year regulatory period and we have put particular
emphasis this year on our ambition to ensure people (customers, the
community we serve and our employees) and our environmental impact
on the planet are at the centre of our strategy to responsibly
deliver a continuous improvement in customer satisfaction.
The team has worked hard throughout the year to deliver the
stretching objectives set in the 2015 to 2020 business plan,
ensuring we provide great service to all our household customers
and within the new non-household retail market, which opened on 1
April 2017. A great deal of effort has also been focused on
developing our plans for the future in the form of the 60 year
water resources management plan and our draft business plan for the
next five year regulatory period from 2020 to 2025.
The operations team works hard 24 hours a day, seven days a week
to maintain our extensive network of underground pipes while also
finding and fixing more than 30,000 leaks and bursts, however in
March 2018 we experienced a severe operational challenge caused by
the "Beast from the East" (several days of freezing temperatures,
high winds and significant snowfall), followed by a very rapid
thaw. This led to a break out of burst pipes across the network at
a scale we have never witnessed in our area, with around 70 per
cent of the leaks on customer private plumbing. A dedicated team
worked around the clock to get water supplies restored to around
20,000 properties, while distributing large volumes of bottled
water to the public, focusing on vulnerable customers, and ensuring
temporary supplies for livestock at affected farms. A major effort
was made in communicating up-to-date information to our customers
through our website, social media, tv and radio etc. We have now
written to all customers impacted to apologise for the disruption
and credited their account with above statutory compensation in
recognition of the inconvenience that was caused. We would like to
thank all our customers who were very patient and understanding of
the circumstances. We are also very grateful to the number of
organisations who helped, whether it was identifying vulnerable
customers, or the fire service supporting filling bowsers for
farmers. Our liaison with our local resilience forum made an
important difference during the event.
I would like to add my personal thanks to all those who worked
with such passion and dedication throughout the incident while at
the same time apologising to all our customers who were affected. A
full review into this incident has taken place.
The team had done a lot to prepare for the impact of the freeze
and thaw on our network, and those bursts that occurred on our
pipes were quickly identified and repaired. But the speed and scale
of the upsurge in demand following the rapid thaw, due primarily to
leaks on customer properties, is something we've never experienced
before. That said we recognise that we must learn from the
experience to identify opportunities to minimise the impact of such
a severe incident in the future including what more we can do to
proactively support customers so they can better protect their own
properties' pipes - in fact customers being part of the resilience
solution will be a key part of our next five year business plan.
Ofwat has completed its own review into the impact of the
freeze/thaw across the whole country and the lessons to be learned
therefrom. We will work closely with the industry to ensure best
practice approaches are built into our emergency plans for future
events.
Customer engagement - shared know h(2) ow
During 2017/18 we have engaged with more customers and
stakeholders than ever before to help develop together our
2020-2025 business plan, which will be published in September 2018.
Our engagement strategy "Shared know h(2) ow" seeks to develop a
sustainable legacy by working together with all those who are
impacted by our service. Partnerships with our community and all
users of water will be the key to continuing to protect and improve
the service we provide into the future.
We have worked closely with our independent Customer Challenge
Group, led by chair Zoe McLeod, to develop our innovative
engagement strategy both for the purposes of finalising a business
plan driven by customer priorities and also to embed customer
engagement in the way we do business day in day out. I would like
to thank Zoe and her team for the challenge they have put to us
during the year. In particular, their experience in identifying and
understanding the needs of people in vulnerable circumstances is
helping us develop our offering so our services are affordable and
accessible at those times when they need support and protection the
most.
Our draft water resources management plan was published in
February 2018. This plan takes a long term view (60 years) of how
to ensure adequate supplies of water for both normal and drought
conditions while balancing the needs of the natural environment on
a sustainable basis. We engaged with customers to develop our draft
plan, and have since held a 12 week public consultation during
which time we have had 430 conversations with customers and met
with more than 100 individual stakeholders to obtain feedback. This
public consultation has included holding eight drop-in sessions for
the public to meet members of our team, a joint stakeholder event
with other water companies in the south east region and numerous
press and social media messages to encourage people to view the
plans. Our web pages for the consultation received more than 1,900
visits during the period.
I'm pleased that many of the responses we received were very
supportive of our plan - particularly the medium term need to
develop new reservoirs at Broad Oak in Kent and Arlington in
Sussex. Where we saw more challenge was around our ambitions for
reducing customers' water use and overall leakage. We have listened
to these challenges and have committed to deliver more ambitious
plans to reduce demand for water both through reducing leakage and
consumption, with a revised plan due to be published during summer
2018.
Engaging with others to develop our plans is important and will
ensure customers are at the centre of our work. Ultimately it is
continuing that engagement as we deliver the plan that will help us
to realise our vision. We have seen the success of this
collaborative approach over the last few years as we have strived
to increase customer satisfaction with our service.
The "five-out-of-five" focus across the business continues to
grow with employees from teams in both the office and the field
adopting the measure to reward and recognise dedication to customer
satisfaction. The Consumer Council for Water published a report in
September 2017 that recognised our continuous improvement in
customer service and highlighted our commitment to getting things
right first time for customers. We have continued with the
initiatives which have helped us achieve this, including:
-- increased digital communications such as 'My Account' with
60,029 customers signed up by April 2018, and
an online 'in your area' map showing supply updates;
-- improved technology to help resolve customer queries, such as
our dedicated digital team to support
social media and live chat channels via our website; and
-- encouraging ideas from employees and acting on feedback
through our 'Pipe Up' ideas forum and employee workshops
Initiatives like these have seen our customer satisfaction
measure scores increase to an average of 4.33 up from 4.28 in
2016/17 - customer satisfaction scores have increased slightly for
all measures but most significantly for low pressure which has
increased by 0.1.
Customers have told us it would make their lives easier to
receive a combined bill rather than separate bills for drinking
water from us and another one from Southern Water for wastewater
services. This year we have teamed up with Southern Water to launch
'One Bill' - a single bill from South East Water that will also
include Southern Water's wastewater charges too.
Designed to make things simpler for our shared customers, One
Bill means customers only need to contact one company - South East
Water - to make payments for both of the services they receive.
This is an approach we have successfully followed for many years
with Thames Water, and means now all our customers receive just the
one bill, wherever they live.
This has been a significant project through the year and I
commend the team for managing a complex billing transition smoothly
for 465,466 customers.
With a project of this scale we anticipated a temporary rise in
customer contacts and complaints due to the complexity of
transferring thousands of accounts. As anticipated the project did
lead to an increase in complaints, and together with those caused
by the incident in March we have seen an increase in written
complaints for the second half of the year, ending the year with
1,498 complaints compared to 1,400 the previous year. We are
confident that now the transition is complete we can bring this
number back down and continue our long-term improvement in reducing
complaints, a fact already recognised by the Consumer Council for
Water in its September 2017 report.
Our service incentive mechanism (SIM) score for 2017/18 was 85.6
out of 100 - a one point improvement on the previous year's score
of 84.6. We are particularly pleased to see continued improvement
in our qualitative SIM scores; in particular our billing scores are
improving as a result of us billing on behalf of Southern Water as
these have risen to 4.50 out of five, compared to 4.42 the previous
year, which means that our combined billing and water scores this
year bring us above industry average for the first time.
As part of our Board/Customer engagement programme, my fellow
non-executive directors and I have spent time with the Customer
Care team and have witnessed their dedication to supporting
customers in vulnerable circumstances who may need extra support.
They are always looking for opportunities to talk to customers and
tell them about the services we offer, attending events from
dementia cafes through to parent and toddler groups and working
with partner organisations such as Citizens Advice to meet those
who may need a helping hand. Throughout the year the team attended
45 per cent more events which enabled them to listen to customers
about any issues they may have with their water services and
offered ways to help manage their water bills. The team took an
innovative approach this year by having specialist water efficiency
training, run by Waterwise, so they can also provide advice to
customers about further ways to manage their water use and see bill
savings as a result. This proactive approach has led to a further
7,318 (a 32 per cent increase) customers benefiting from our
support tariffs for those who are financially vulnerable and 12,903
(a 71 per cent increase) people being added to our priority
services register to support their personal circumstances.
The Customer Care team has also worked with our digital
specialists to find innovative ways to support customers with a
range of issues via the ReciteMe system. Customers can now set
visibility and language preferences on our website or have the
content of our website spoken for those who can't see. The website
can be translated into a number of different languages if English
is not the user's first language. We are pleased to see that more
than 26,000 customers have used the ReciteMe system during the year
helping them engage with our business more easily.
Science and engineering excellence to deliver quality water
During the year we invested GBP96.0 million in new and existing
assets as part of the GBP437 million investment planned for the
period from 2015 to 2020. The expenditure in the year saw us
install 36km of new pipelines and renew a further 11km of old
pipelines across the region, continue our customer metering
programme and improve our water treatment works. Schemes such as
these are supporting our efforts to improve services for our
customers and help safeguard the environment, and we are committed
to continuing this level of investment.
Our largest capital scheme during this five year investment
programme is the extension of our water treatment works at Bray,
Berkshire which extracts water from the River Thames. The site is
currently capable of treating up to 45 million litres of fresh
drinking water per day and we plan to extend the works to be able
to treat up to 68 million litres per day in order to secure water
supplies for current and future customers across Berkshire, Surrey
and Hampshire. The scheme was submitted for planning permission in
November 2017 and work on the ground is now due to start in May
2018.
We also have our largest environmental programme of work taking
place during this five year period through the Water Industry
National Environment Programme (WINEP). Our catchment management
partnership with Natural England has been recognised as industry
leading, picking up the water resilience initiative at the Water
Industry Awards, while our biodiversity programme has seen
continued success with the reintroduction of the rare wart-biter
cricket to our land at Deep Dean in East Sussex.
We strive to keep improving the quality of the water we supply.
While we have maintained high overall water quality with 99.95 per
cent of samples passing standards set by the Drinking Water
Inspectorate (calendar year January to December 2017), we want to
reduce the number of calls we receive about discoloured water which
relate to naturally occurring, harmless deposits which build up
over time. To do this we are carrying out a flushing programme of
approximately 900 miles of pipework per year to draw sediment
deposits - such as iron and manganese - out of the network.
This year has been a particularly testing one operationally. We
started the year working to ensure we managed our water resources
following the dry winter experienced in 2016/17 by proactively
moving water around our region to maintain supplies to customers
without the need for temporary water restrictions. The winter of
2017/18 started dry again, but we have since seen increased
rainfall later in the year which means as we move into the summer
our water resources are in a good position.
The changeable weather during the winter put particular pressure
on our distribution teams as they managed the impact of the various
freeze/thaws on the network. Our supply interruption performance
before March was good and April 2017 to the end of February 2018
our overall interruption performance for both planned and unplanned
work was at 5.6 minutes per property (against our target of 12.0
minutes for the year). However the unprecedented "Beast from the
East" freeze/thaw incident referred to previously had a major
impact and our overall interruption performance for unplanned work
for the full year as a whole deteriorated to 44.6 minutes.
Leakage is calculated to include leaks on customer pipes as well
as our own, so this event also put our leakage target at risk as we
saw a sudden rise in leaks across the network when the pipes
thawed. When customer supplies were restored the incident team
focussed on stepping up leakage activity to get back on target. The
team had worked hard throughout the year to beat the target and
therefore despite the severe weather we have been able to
outperform our target of 90Ml/d, achieving 87.7Ml/d.
We recognise the importance of regular and timely communication
with customers during any supply interruption. Investment in
technology is giving us the opportunity to keep customers updated
with the information they need through our "in your area" portal
operating on the website. It enables customers to enter their
postcode to get up-to-date information on work in their region that
may affect them and receive texts or emails to keep them informed.
This online information comes into its own during an incident and
works well. This year we have sent more than 45,000 emails and
36,000 SMS text messages to help keep customers informed about our
work; indeed during the major freeze/thaw event in March our
website was viewed more than 320,000 times.
Non-household retail competition
On 1 April 2017 we, along with the other water companies in
England and Wales, were ready for the opening of a new retail
market for non-household customers. We welcomed the challenge and
continue to work hard to ensure the new market is successful. Our
dedicated Wholesale Service Desk is working closely with the new
retailers to ensure a smooth transition and that the non-household
customers continue to receive an excellent and reliable
service.
We began the year with our non-household retail business, South
East Water Choice operating within our supply region and the
company had a good first year of trading. At the same time, Water
Choice, owned by another company within our group of companies,
Invicta Water Ltd, was offering water and wastewater retail
services to all non-household customers across England. In April
2018 we transitioned South East Water Choice across to become one
business owned by Invicta Water.
Invicta Water has subsequently sold the business to Castle Water
with the completion of the sale on 1 July 2018. Castle Water has
the scale and experience to build on the progress Water Choice has
made since the market opened. South East Water is committed to
providing an excellent wholesale service to all business retailers.
We have worked closely with both Castle Water and Invicta Water
during this period to ensure a smooth transition.
We look forward to building our relationships with all
non-household retailers that operate within our region during
2018/19 as we concentrate on ensuring we provide an excellent
wholesale customer service. Household customers in our region will
continue to receive retail services exclusively from South East
Water.
You can find out more about the new business retail market at
open-water.org.uk.
Financial results
The results published in this report describe our performance
for the year and incorporate the performance of South East Water
Ltd and South East Water (Finance) Ltd.
This year we have had a steady financial performance having
generated an operating profit of GBP75.0 million for the year to 31
March 2018, compared with GBP79.0 million for the prior year. Our
turnover was GBP224.8 million for the year compared to GBP218.9
million in the prior year.
Net operational costs have increased in the year to GBP158.7
million compared to GBP147.3 million in the prior year, an increase
of GBP11.4 million. Included in this increase are additional costs
of GBP2.1 million in respect of the major incident in March 2018,
GBP2.2 million of additional business rates charges and GBP3.2
million additional depreciation on fixed assets.
Profit before tax has fallen by GBP1.6 million from GBP25.3
million to GBP23.7 million. Net finance costs have decreased in the
year by GBP2.5 million to GBP51.2 million, offsetting the reduced
operating performance. The decrease in net finance costs reflects
the significantly smaller increase in the fair value of the Group's
interest rate swap liability in the year of GBP3.3 million (2017:
GBP13.7 million). However, interest and indexation charges on the
Group's index linked loans and bonds have increased by GBP7.5
million to GBP52.5 million due to the significant upward movement
in the Retail Price Index over the course of the year.
Profit after tax has reduced from GBP27.1 million to GBP16.2
million, a reduction of GBP10.9 million which is driven by the
additional operating costs noted above, an adjustment to the
deferred tax treatment of the group's revaluation reserve resulting
in a charge of GBP4.2 million and the tax benefit in the prior year
of GBP6.2 million, due to the effect of changes in the future rate
of corporation tax on deferred tax, not available in the 2017/18
financial year.
Overall the Board is pleased with our financial performance in
the year.
We want to ensure that South East Water is a trusted business
and therefore our reporting aims to provide a transparent account
of our performance and financial governance. We are this year
carrying out further research with customers and stakeholders to
ensure we continue to improve our reporting to ensure we are a
trusted business.
Our people, working together towards future success
We want to ensure South East Water is the water company people
want to work for - it's an integral part of our vision as we know
great people, who see purpose in their work, are key to our future
success. We are proud that this year we were shortlisted in three
Water Industry Achievement Awards, including Water Company of the
Year. Our people are proud of the job they do and the important
role they play in our society.
Our health, safety and wellbeing strategy, Thrive 365, was
launched at the end of last year. The strategy focusses on two
strands, safe people and safe working, and is about more than just
preventing accidents; it is about enhancing the overall wellbeing
of our people.
From a wellbeing perspective a number of activities go from
strength to strength. One member of staff, Lee Allen, has set
himself an impressive challenge and has now run 10km every day for
more than 500 days. He has inspired a number of employees to
increase their physical activities and there is now a thriving
running club.
This year through this focus on fitness South East Water won the
Kent Active Workplace Challenge, a competition involving 122
workplaces in Kent, we logged more activity than any other during
the eight week challenge.
We work closely with every department to ensure safety is always
the first thing that is considered before completing any task.
During 2017/18 we unfortunately had two reportable accidents, one
due to a strained shoulder injury, the other following a slip on
some ice.
In March we published our gender pay gap report which shows an
average hourly rate pay gap of 25 per cent, which is above the
national average. We recognise that this is predominately due to
more women working in our call centre, while more men are in
technical operational roles. However, all our employees are paid
the same for the same task. We also recognise that we have more men
in senior leadership roles. Publishing this report is an important
step to encourage a dialogue within the business about the gap and
identify areas that require further attention.
We want to encourage more diversity across our business and the
range of roles available to people. This includes thinking about
our next generation of South East Water employees; that's why we
have been developing our STEM (Science, Technology, Engineering and
Maths) ambassador scheme, particularly led by women in our
organisation to inspire a new generation to work in our
industry.
Supporting the continuous development of our employees has seen
us deliver more than 10,000 hours of training and development
through the year. We have also implemented a new employee review
system, called iReview, which encourages employees to think about
their own development, performance throughout the year and their
ambitions for the future.
We welcome the appointment to the Board in June 2018 of Célia
Pronto as an independent non-executive director. Célia brings her
expertise in customer engagement and service improvement, digital
engagement, e-commerce and technology and innovation to the board.
She will help us expand our customer engagement and continue our
efforts to place customers at the heart of what we do.
This year, maybe more than any other, has demonstrated the
dedication of the workforce at South East Water. During the March
freeze/thaw incident, people from right across the business
volunteered to help and took on roles outside their normal duties
to ensure we were there for our customers. It is this passion and
dedication to our business that comes through time and again from
our employees. We will work with our employees and business
partners, together with our customers and stakeholders, to develop
a sustainable future for water in our community of the south east.
On behalf of the Board I would like to thank all our employees, the
management team and our business partners for all they have
achieved in 2017/18 and look forward to the year ahead.
Nick Salmon
Chairman
13 July 2018
Group income statement
for the year ended 31 March 2018
2018 2017
Notes GBP000 GBP000
Revenue 3 224,776 218,905
------------------ ----------
Group net operating costs (158,713) (147,302)
------------------ ----------
Other income 3 8,895 7,407
Group operating profit 74,958 79,010
Finance costs (56,019) (58,793)
Finance income 4,803 5,119
Profit before taxation 23,742 25,336
Taxation 4 (7,574) 1,759
------------------ ----------
Profit for the year 16,168 27,095
------------------ ----------
Earnings per share
Basic and diluted from continuing operations 6 32.79p 54.95p
------------------ ----------
Profit for the current and prior year is generated entirely from
continuing operations.
Group statement of comprehensive income
for the year ended 31 March 2018
2018 2017
GBP000 GBP000
Profit for the year 16,168 27,095
Items that will not be reclassified
subsequently to profit or loss:
Remeasurement of defined benefit asset/liability 9,355 (3,933)
Deferred tax on defined benefit pension
schemes 4 (1,590) 708
Impact of deferred tax rate change in
respect of the pension schemes 4 - (286)
7,765 (3,511)
--------- ----------
Total comprehensive income for the year
attributable to owners of the Company 23,933 23,584
--------- ----------
Group statement of financial position
as at 31 March 2018
31 March 31 March
2018 2017
GBP000 GBP000
Non-current assets
Intangible assets 10,758 11,058
Property, plant and equipment 1,501,707 1,455,380
Amount due from parent undertaking 190,013 190,013
Defined benefit pension surplus 21,229 9,616
-------------- --------------
1,723,707 1,666,067
-------------- --------------
Current assets
Inventories 236 214
Trade and other receivables 78,255 72,113
Cash and cash equivalents 6,528 11,371
-------------- --------------
85,019 83,698
-------------- --------------
Total assets 1,808,726 1,749,765
-------------- --------------
Current liabilities
Loans and borrowings (20,000) -
Trade and other payables (94,379) (96,130)
Deferred income (7,593) (6,573)
Provisions (2,515) (2,472)
-------------- --------------
(124,487) (105,175)
-------------- --------------
Non-current liabilities
Loans and borrowings (900,897) (882,024)
Trade and other payables (5,979) (4,261)
Derivative financial instruments (104,169) (100,916)
Net deferred tax liabilities (140,085) (132,895)
Defined benefit pension liability - (1,851)
Deferred income (74,471) (69,938)
(1,225,601) (1,191,885)
-------------- --------------
Total liabilities (1,350,088) (1,297,060)
-------------- --------------
Net assets 458,638 452,705
-------------- --------------
Equity
Ordinary share capital 49,312 49,312
Revaluation reserve 256,396 261,549
Retained earnings 152,930 141,844
-------------- --------------
Total equity 458,638 452,705
-------------- --------------
The accompanying notes are an integral part of this statement of
financial position.
Group statement of changes in equity
for the year ended 31 March 2018
Issued
share capital Revaluation Retained Total equity
GBP000 reserve earnings GBP000
GBP000 GBP000
Balance at 1 April 2016 49,312 264,134 129,328 442,774
--------------- -------------- ----------- ---------------
Profit for the year - - 27,095 27,095
--------------- -------------- ----------- ---------------
Other comprehensive income:
Remeasurement of defined benefit
asset/liability - - (3,933) (3,933)
Deferred tax on defined benefit
pension schemes - - 708 708
Impact of deferred tax rate change
in respect of the pension schemes - - (286) (286)
--------------- -------------- ----------- ---------------
Total other comprehensive income - - (3,511) (3,511)
Total comprehensive income - - 23,584 23,584
Dividends (see note 5) - - (16,000) (16,000)
Amortise revaluation reserve - (6,130) 6,130 -
Release revaluation on disposals - (28) 28 -
Deferred tax on reserve releases - 1,226 (1,226) -
Impact of deferred tax rate change - 2,347 - 2,347
--------------- -------------- ----------- ---------------
Balance at 31 March 2017 49,312 261,549 141,844 452,705
--------------- -------------- ----------- ---------------
Profit for the year - - 16,168 16,168
--------------- -------------- ----------- ---------------
Other comprehensive income:
Remeasurement of defined benefit
asset/liability - - 9,355 9,355
Deferred tax on defined benefit
pension schemes - - (1,590) (1,590)
Total other comprehensive income - - 7,765 7,765
Total comprehensive income 23,933 23,933
Dividends (see note 5) - - (18,000) (18,000)
Release of revaluation reserve - (6,129) 6,129 -
Release of revaluation reserve
on disposals - (70) 70 -
Deferred tax on revaluation and
retained earnings transfer - 1,046 (1,046) -
Balance at 31 March 2018 49,312 256,396 152,930 458,638
--------------- -------------- ----------- ---------------
All transactions relate to the equity holders of the
Company.
Group statement of cash flows
for the year ended 31 March 2018
Notes 2018 2017
GBP000 GBP000
Operating activities
Net cash flow from operating activities 7 123,089 127,462
Interest received 4,554 4,827
Interest paid (35,619) (35,169)
Group tax relief paid (4,020) (2,000)
--------- ---------
Net cash flow before investing and financing
activities 88,004 95,120
--------- ---------
Investing activities
Proceeds from sale of property, plant
and equipment 264 212
Purchase of property, plant and equipment (93,763) (83,423)
Purchase of intangible assets (3,106) (3,197)
Fixed asset contributions received 1,758 1,712
Net cash flow used in investing activities (94,847) (84,696)
--------- ---------
Financing activities
Repayments of borrowings 20,000 -
Dividends paid to shareholder 5 (18,000) (16,000)
Net cash flow used in financing activities 2,000 (16,000)
--------- ---------
Decrease in cash and cash equivalents (4,843) (5,576)
Cash and cash equivalents at the beginning
of the year 11,371 16,947
--------- ---------
Cash and cash equivalents at the year
end 6,528 11,371
--------- ---------
Notes
1 Basis of preparation
(i) The financial information included within this statement has
been prepared on the basis of accounting policies consistent with
those set out in the Annual Report and Financial Statements for the
year ended 31 March 2018.
(ii) The information shown for the years ended 31 March 2018 and
31 March 2017 does not constitute statutory accounts within the
meaning of section 435 of the Companies Act 2006 and has been
extracted from the full accounts for the year ended 31 March 2018.
The reports of the auditors on those accounts were unqualified and
did not contain a statement under either Section 498(2) or Section
498(3) of the Companies Act 2006. The accounts for the year ended
31 March 2018 will be delivered to the Registrar of Companies in
due course.
(iii) The financial information included in this statement was
approved by the Board on 13 July 2018.
2 Going concern
The group finances its working capital requirements through cash
generated from operations and committed facilities that can be
called upon as required. The group's annual budget and forecasts
together with its five year plan and longer-term resources planning
all indicate that the group should be able to continue in operation
utilising its current financial resources and the proceeds of
future borrowing opportunities expected to become available.
The directors believe that the company and group are well placed
to manage its business risks successfully. After making enquiries,
the directors have a reasonable expectation that the company and
the group have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to
adopt the going concern basis in preparing the annual report and
financial statements.
3 Total income
2018 2017
GBP000 GBP000
Revenue
Unmetered water income 34,971 46,115
Metered water income 183,033 166,513
Unmetered sewerage income 4 -
Metered sewerage income 507 -
Other sales 6,261 6,277
---------- ----------
Total Revenue 224,776 218,905
---------- ----------
Other income
Rental income 1,178 1,245
Sundry income 7,717 6,162
---------- ----------
Total other income 8,895 7,407
---------- ----------
Total income 233,671 226,312
---------- ----------
4 Corporation tax
Major components of the tax expense for the years ended 31 March
2018 and 2017 are:
2018 2017
GBP000 GBP000
Group income statement
Current tax:
Current UK tax charge 1,975 3,168
Amounts over) provided in previous years (1) (25)
-------- ----------
1,974 3,143
-------- ----------
Deferred tax:
Relating to origination and reversal of temporary
differences 5,600 1,300
Impact of deferred tax rate change - (6,202)
5,600 (4,902)
-------- ----------
Tax charge/(credit) reported in the group
income statement 7,574 (1,759)
-------- ----------
Tax charge/(credit) to equity
Deferred tax on defined benefit pension schemes 1,590 (708)
Impact of deferred tax rate change in respect
of the pension schemes - 286
-------- ----------
Tax reported in comprehensive income statement 1,590 (422)
-------- ----------
5 Dividends
2018 2017
GBP000 GBP000
Equity dividends paid during the year:
First interim dividend of 9.13p per
ordinary share (2017: 8.11p per ordinary
share) 4,500 4,000
Second interim dividend of 9.13p per
ordinary share (2017: 8.11p per ordinary
share) 4,500 4,000
Third interim dividend of 9.13p per
ordinary share (2017: 8.11p per ordinary
share) 4,500 4,000
Final dividend of 9.13p per ordinary
share (2017: 8.11p per ordinary share) 4,500 4,000
--------- ---------
18,000 16,000
--------- ---------
There were no dividends proposed for approval as at 31 March
2018 and 31 March 2017.
6 Earnings per ordinary share - basic and diluted
The following reflects the income and shares data used in the
basic and diluted earnings per share computations:
2018 2017
GBP000 GBP000
Profit for the year 16,168 27,095
----------- -----------
2018 2017
Number Number
Basic and diluted weighted average number
of shares 49,312,354 49,312,354
----------- -----------
Basic and diluted earnings per share 32.79p 54.95p
----------- -----------
There have been no other transactions involving ordinary shares
or potential ordinary shares between the reporting date and the
date of completion of these financial statements.
7 Group Cash flow from operating activities
2018 2017
GBP000 GBP000
Profit for the year 16,168 27,095
Adjustments for:
Income tax charge/(credit) 7,574 (1,759)
Finance income (4,835) (5,119)
Finance costs 56,051 58,793
Depreciation and impairment of property, plant
and equipment 46,253 43,313
Amortisation and impairment of intangibles 3,405 3,183
Profit on disposal of fixed assets (120) (94)
Difference between pension contributions paid
and amounts recognised in the income statement (3,861) (3,839)
Changes in working capital:
Increase in trade and other receivables (5,958) (5,492)
Increase in inventory (22) (29)
Increase in trade and other payables 8,434 11,410
---------- ----------
Net cash flow from operating activities 123,089 127,462
---------- ----------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR EASXAFFKPEFF
(END) Dow Jones Newswires
July 13, 2018 02:00 ET (06:00 GMT)
Sth.e.wtr.5%db (LSE:53HO)
Historical Stock Chart
From May 2024 to Jun 2024
Sth.e.wtr.5%db (LSE:53HO)
Historical Stock Chart
From Jun 2023 to Jun 2024
