FINANCIAL HIGHLIGHTS
- Profit before tax up 6.4% to £200.5m
- South West Water up 9.8% to £141.5m
- Viridor down 8.4% to £57.6m
- Earnings per share before deferred tax up 11.8% to 47.3p
Dividend
- Full year dividend up 7.6% to 26.52p
- Recommended final dividend per share up 6.7% to 18.30p
- Strong liquidity and funding position
- £566m new/refinanced facilities since 31 March 2011
- £1,084m cash and facilities at 31 March 2012
- £257.4m invested in key infrastructure
- Group businesses well positioned for the future
- Basic earnings per share were 48.1p
OPERATIONAL HIGHLIGHTS
South West Water:
- Strong performance against 2010 - 2015 regulatory contract
- Average funding cost 4.1%
- Substantial progress in operating efficiency
- Strong water resource position: 2012 expected to be the sixteenth consecutive summer without hosepipe bans or drought orders due to:
- Industry-leading leakage control. Targets met every year since inception
- Two new reservoirs, Park and Stannon Lakes, now fully operational
- Long-term improvements to distribution network
- 73.4% of households now metered
- Repeated best ever drinking water quality at 99.98% compliance
- Record percentage of bathing waters achieving excellent status
- Private sewers transferred to SWW on 1 October 2011 - estimated network length increased by over 50%
- Further improvements in Service Incentive Mechanism (SIM) performance
- Customer complaints halved over two years
- Government support for customer bills from 2013/14 welcomed
Viridor:
- Continuing growth in profits from recycling, contracts and joint ventures offset this year by reduction in landfill plus increased bid costs associated with its developing project pipeline
- As flagged previously, recyclate prices have fallen from their first half 2011/12 peak reflecting world economic conditions
- Cost base adjusted accordingly: more than 50% of impact recovered via terms of customer supply contracts and by cost reductions
- Significant progress in developing pipeline of long-term projects including:
- Becoming preferred bidder for the 25 year South London Waste Partnership residual waste PPP
- Confirmation as successful participant for the 25 year Glasgow residual waste PPP
- The successful resolution of the legal challenge for the Ardley EfW plant with the Oxford PPP Notice to Proceed issued and construction commenced
- Construction commenced on Exeter EfW
- Construction contract signed (post year-end) for Cardiff EfW
- Strong pipeline of future opportunities
- Five acquisitions in 2011/12 for c£40m
Transforming waste:
- c50% of profits from recovering value in waste
Ken Harvey, Chairman said:
"Overall, this has been another very successful twelve months for the Group.
"During the year South West Water continued its very strong operational performance and is well placed to outperform the assumptions for the current K5 regulatory period. As we highlighted in March, we are confident this summer will be our sixteenth successive summer without water restrictions. This reflects our industry-leading record on tackling leakage; the addition of two new reservoirs - Park and Stannon Lakes - and long-term improvements to our distribution networks.
"Viridor made very substantial progress during the year in progressing its pipeline of PPP and EfW projects. However, as expected the full year profits for Viridor are below those of last year. Viridor experienced a reduction in recyclate prices in the second half of the year, reflecting world economic conditions and increased bid costs associated with the company's growing pipeline of long-term projects. Accordingly, we took action to reduce the cost base which recovered more than 50% of the impact of reduced recyclate prices. Viridor's financial performance will continue to be impacted by trends in recycling and landfill. We are cautious about the prospect for a recovery in recyclate prices in the near-term. Looking further ahead, our growing pipeline of projects will ensure the future success of the company and could more than double Viridor's EBITDA within the next five years."
