Step change in performance in 2010-15 regulatory period delivers benefits for all stakeholders
o significant customer service improvements, as measured through Ofwat's SIM mechanism
o much improved delivery of capital investment programme; Time:Cost:Quality index above 95%
o investment totalling c£3.8bn over the five years, enhancing assets and services for customers
o upper quartile operational performance on Ofwat and Environment Agency KPI assessments
o strong shareholder returns and dividend policy delivered
o exceeded regulatory outperformance targets, enabling us to reinvest c£280m to benefit customers
o responsible business practice, reflected by Dow Jones Sustainability Index 'World Class' rating
Strong 2014/15 financial performance
o underlying operating profit up £30m to £664m
o RCV gearing at 59%, well within our target range of 55% to 65%
o final dividend of 25.14 pence per share (total for the year of 37.70 pence), in line with policy
Good platform to deliver further value in next regulatory period
o already a leading operational performer, providing a solid foundation for further improvements
o 'systems thinking' approach, leveraging technology and data intelligence to improve efficiency
o regulatory capital investment of £3.5bn+; network resilience, customer and environmental benefits
o robust capital structure and strong credit ratings
o dividend growth rate target of at least RPI inflation each year through to 2020
o below inflation growth in average household bills for the decade to 2020
Steve Mogford, Chief Executive Officer, said:
"We have now completed the 2010-15 regulatory period and are pleased to have achieved a strong overall performance for the benefit of all our stakeholders. We have delivered substantial improvements in customer satisfaction and have become a leading operational performer in our sector. We have exceeded our regulatory outperformance targets, enabling us to reinvest around £280 million in customer service improvements and in helping customers struggling to pay.
"We expected our 2015-20 price determination to be tough and it was. However, our operational improvements and preparation provide us with a good platform to deliver further value in the forthcoming regulatory period. For shareholders, we are targeting to grow dividends by at least RPI inflation for the next five years. For customers, we will continue to provide benefits through significant levels of investment, improved service and below inflation growth in average household bills for the decade to 2020."
