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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