Warwick Emanuel PR : Press Release
Welsh Water Financial Results for the year to 31 March 2008
Audio clips by Managing Director Nigel Annett:
http://www.dwrcymru.com/download/nigelannet/
Welsh Water returns £27 million to its customers
Dwr Cymru Welsh Water today announces its preliminary financial results for the year ending 31 March 2008 – showing that further gains in efficiency and financial strength are enabling the company to return £27 million to its customers this year.
Welsh Water, which is run for its 1.2 million customers on a not-for-profit basis, is the only UK water company to pay a ‘customer dividend’, which has risen to £21 this year. It is the sixth consecutive year that the company has returned money to customers, while continuing to improve standards of service.
Welsh Water has been owned by Glas Cymru since May 2001 and has the single purpose of delivering better value services to its customers. Glas Cymru is unique amongst UK utility companies in that it has no shareholders and reinvests all financial surpluses for the benefit of Welsh Water’s customers.
Glas Cymru Chairman Lord Burns said, “Welsh Water’s customers are continuing to see the benefits of our unique business model - receiving a ‘customer dividend’ which has steadily risen to reach £21 this year. Customers are also seeing benefits from one of our largest ever capital investment programmes, with more than £300 million invested during the past year and resulting in improvements to customer service, drinking water quality and the environment.”
Highlights for the year include:
- ‘Customer dividend’ for 2008-09 increased to £21 for customers receiving both water and sewerage services (2007: £20 per customer)
- Capital investment of over £300 million, the highest ever level by Welsh Water, will benefit customers, for example by reducing the risk of sewer flooding in the future
- Reduction in leakage, hitting the Ofwat leakage target for the tenth year in a row
- Strong financial performance, with gearing reduced to 72% (as against 93% in May 2001)
- Improved credit rating, with a recent upgrade of senior bonds to A grade awarded by Standard and Poor’s.
Lord Burns also praised the staff of Welsh Water and partner companies for their response to particularly unfavourable weather conditions over the last twelve months. Summer flooding events, particularly in Herefordshire, and an extremely wet summer in general created additional challenges in maintaining customer supplies and the quality of drinking water.
“Customer satisfaction with the service and value for money provided by Welsh Water continues to be at very pleasing levels, notwithstanding a number of external challenges that we have had to cope with over the last year,” he continued. “I am confident that customers can look forward to even higher levels of service from Welsh Water in the future, due to the record levels of investment we are making in the business, supporting the commitment and professionalism of our people”.
Independent research has shown that 80 per cent of Welsh Water customers are satisfied or very satisfied with the services they receive from Welsh Water.
The results in detail:
Customer benefits and operational performance:
- 'customer dividend’ increased this year to £21 per customer at a total cost of £27 million (2007: £26 million). The ‘customer dividend’ has increased steadily since it was first introduced in 2003 at £9 per customer
- customers suffering from internal sewer flooding as a result of blockages, collapses or overloaded sewers down by 18%
- best ever compliance with the standards for iron in water – a result of nearly 3,500 km of unlined iron water mains being replaced or renewed since April 200
- in the 2008 summer season, Wales has 47 Blue Flag beaches and marinas (2007: 49 Blue Flags), around a third of the UK total
- on health and safety, a 17% reduction in reportable accidents
- achieved the leakage reduction target set by Ofwat for 2007/08 – with 50 leaks and bursts being repaired every day
- continuing high customer satisfaction of more than 80%, as measured by independent tracking research
- a 40% increase in the number of customer calls to our dedicated Welsh language line.
Major capital investment programme: - capital investment of £301 million (2007: £269 million) benefiting customer service, environmental quality and drinking water quality
- total investment over the AMP4 period (2005 to 2010) forecast to be £1,400 million (equivalent to over £1,000 of investment for every customer served)
- total capital investment since April 2005 of £807 million (57% of the expected AMP4 total)
- 440 kms of unlined iron water mains replaced or refurbished (2007: 350 kms)
- major programme of environmental investment, improving 91 sewer overflows and alleviating the risk of sewer flooding for over 400 properties.
Strong financial performance: - net debt has reduced to 72% of Regulatory Capital Value (RCV), down 2% over the year
- profit before taxation (but excluding the fair value movements on financial instruments) was £14 million (2007: £2 million), which will be retained in the business for the future benefit of customers
- operating costs of £231 million (2007: £229 million), a reduction in real terms of 3%
- Standard and Poor’s, the credit rating agency, raised their rating of the company’s class B bonds from A- to A and of the class C bonds from BBB to BBB+, reflecting the improved credit quality of the company
- lease finance of £85 million raised in the year, enhancing the strong liquidity position.
Ends
For further information, contact the Welsh Water press office on 02920 556140.