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22 June 18

Financial Results for year ended 31 March 2018

 

We have today published our Annual Report and Financial Statements for the year ended 31 March 2018, the third year of the 2015-2020 price control period (Asset Management Plan 6; AMP6) 

 

Throughout the year we have continued to make progress towards the performance commitments that we included within our AMP6 Business Plan. We have invested in building relationships with customers and other key stakeholders, improved our digital technologies and have worked hard to ensure the resilience of our network. We are particularly focused on minimising the impact of our activities on the environment that we operate in by reducing leakage, driving down customer consumption and reducing our abstraction.

 

We had a disappointing year for our unplanned interruptions to supply and have underperformed in this area. We have taken action to improve our service to customers in this area and have seen performance improve. We will continue to work hard to improve this in 2018/19.We are keen to recognise the huge effort from different teams across the business that have delivered improved levels of performance to help us meet the commitments we have made to customers.

 

Business highlights

Financial performance

 

Revenue - £306.3 million (2017: £308.7 million)

 

Profit before tax - £35.9 million (2017: £26.7 million)

 

Over £137 million invested in enhancing and maintaining infrastructure and assets

 

£120 million of bonds issued in the year to ensure we have the finances in place to deliver our expected investment programme for the 2020-2025 price control period and to deliver high levels of service.

 

Continued to maintain Baa1 investment grade corporate family credit rating in line with our peers in the water sector, being two notches above investment grade.  

 

Operational performance

 

Remained on track to meet the industry’s most challenging leakage reduction target for 2015-2020, having reduced leakage for the last three years

 

Reduced our average water use (per person, per day) by 8.0 litres to 151.7 litres, compared to our 2016/17 performance

 

Continued to provide high quality water for the 2017 calendar year, mean zonal compliance of 99.96%

 

We experienced 7,890 unplanned interruptions to supply over 12 hours compared to a target of 320 and actual performance of 1,840 in 2016/17. Improvements were made during the year and, excluding the impact of the severe weather event in early March 2018 causing disruption on our network, we would have met the target for the second half of the year

 

Reduced the amount of water taken from the environment (abstraction) in the year by 32.7 megalitres per day

 

Continual increased focus on customers, delivering improvements in the year by rolling out our digital services, with positive trends in our customer service metrics, including a 32% reduction in complaints and 34% reduction in escalated complaints compared to 2016/17. We have also moved our SIM score up by 2.4 points

 

Achieved our target of fewer than 3,100 mains bursts in the year, and experienced fewer bursts than the previous year, despite the severe weather event in early March 2018 causing disruption on our network

 

Remained on course to replace all lead service pipes in Finchley and Watford, as well as all primary schools in our supply area by the end of the AMP

 

Since 2014/15 we have revised our strategy and improvement plan to focus on a number of safety and health initiatives. We recorded 0.29 lost time injuries per 100,000 hours worked, compared to actual performance of 1.02 in 2014/15

 

Commissioned and put into service a new reservoir near Folkestone, providing additional capacity of 3.2 ML and significantly increasing security of supply for customers

 

Dividends

 

There has been no change in the company’s dividend policy during the year, although year on year dividends increased by £8.0 million. This increase can be attributed to the increase in RPI on the company’s equity related to its regulated business and proceeds from the disposal of the company’s non-household retail business to Affinity for Business (Retail) Limited.

 

In 2017/18, Affinity Water spent 70p of every £1 of customers’ money on our assets, people and suppliers for services, ensuring customers receive the highest quality water and service, with only 11p of every £1 spent on dividends and interest on shareholder debt.

 

View our Annual Report and Financial Statement for the year ended 31 March 2018 >>

 

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