TIDM53HO
RNS Number : 2623Z
South East Water Limited
14 December 2017
South East Water Limited
Condensed group financial statements
for the six months ended 30 September 2017
Registered number 02679874
Contents
Chairman's introduction
Statement of directors' responsibilities
Condensed group income statement
Condensed group statement of comprehensive income
Condensed group statement of financial position
Condensed group statement of changes in equity
Condensed group statement of cash flows
Notes to the condensed group financial statements
Chairman's introduction
I am pleased to present our interim report for the first half of
the 2017/18 financial year.
We have reached the half-way mark of our five year business
plan, a plan which put customer satisfaction at the heart of
everything we do. We do this by working with our customers and
communities, sharing ideas and working together to innovate in
ensuring we provide a reliable and economic high quality drinking
water service, while enhancing the environment and benefiting
society through our work.
A review of the year
Our vision is to be the water company people want to be supplied
by and want to work for. The report by the Consumer Council for
Water in September this year recognised our continuous improvement
in customer service and highlighted our commitment to getting
things right first time for customers. Some of the innovative
initiatives which have helped us achieve this success include:
-- increased digital communications such as 'My Account' (with
50,000 customers signed up by August 2017) and an online 'in your
area' map showing supply updates;
-- improved technology to help resolve customer queries, such as
ensuring we have dedicated employees available to support social
media and live chat channels via our website;
-- encouraging ideas from employees and acting on feedback
through our 'Pipe Up' ideas forum and employee workshops.
We will continue to engage with customers and community groups
with the objective of delivering a five-star service for all. For
example our popular open days give customers a chance to see behind
the scenes at our water treatment works and raise questions and
suggestions that we feed back into the business. This commitment to
listening to customers is demonstrated by the fact we are on track
to see complaints reduce for a seventh consecutive year, with
complaints for the period to 30 September 2017 down by 21 per
cent.
One area where we have worked particularly hard to ensure a
positive customer experience is in our customer metering programme.
We have installed a further 21,323 water meters in the first six
months of the year. The metering team has recently been shortlisted
as "Team of the Year" at the Utility Week Awards, which endorses
their efforts to ensure a smooth transition to metered water for
customers.
We now have 84 per cent of our customers on meters and are on
track to achieve 90 per cent by 2020, as set out in our long term
water resources strategy.
We strive to keep improving the quality of the water we supply.
While we have maintained high overall water quality with 99.95 per
cent of samples passing standards set (as this is calculated on a
calendar year basis this is the figure from January to September
2017), we want to reduce the number of calls we receive about
discoloured water. In order to do this we are carrying out a pipe
flushing programme in the order of approximately 900 miles during
the year.
It is important that customers have trust in the quality of the
information we provide and we continue to work hard to ensure our
reporting is not only robust and transparent, but also clear and
engaging for readers. Our regulator Ofwat has, for a second year,
recognised our work in this area and assessed the quality of the
information and assurance as industry leading.
We have our largest environmental programme of work taking place
during this five year period through the Water Industry National
Environment Programme (WINEP). Work includes catchment management
education programme and practical projects with farmers to help
them reduce pesticide runoff into rivers. This work is carried out
in partnership with Natural England and we are grateful for the
addition of their expertise to support this programme.
Eels are a protected species and can be damaged through our
treatment works if special screens are not in place. As part of the
WINEP we have had sign off for one of our eel screens at Bray and
we have commenced the design of five more screens. In the last six
months a screen at Crowhurst Bridge has been constructed and we
expect two others to be constructed this year.
Another environmental success, with Natural England and also Bug
Life, is that our dedication to improving wildlife habitats has
seen the successful reintroduction of rare wart-biter crickets to
our land at Deep Dean in East Sussex. Careful management of the
land above our chalk aquifers not only ensures we are protecting
the water quality below the ground, but we are also benefiting the
biodiversity above ground too.
The start to this year's recharge season has been drier than
average in the south east, with October receiving just 40 per cent
long term average rainfall. As such we have been preparing in case
there is a second consecutive dry winter. At this point, our
reservoirs are in a good position, but we need above average winter
rainfall to refill the underground sources. We will continue to
monitor and manage supplies through the winter and work closely
with customers to promote water efficiency in preparation for the
spring/ summer 2018.
This year we are updating our long-term water resource plans. We
will begin a 12 week public consultation early in 2018 on our new
draft water resources management plan, which has been prepared to
ensure we have a resilient water supply through to 2080. In order
to plan this far ahead we have worked closely with a number of key
stakeholders to develop the plan through our Environment Focus
Group and, as active members of the Water Resources in the South
East (WRSE) group, with our neighbouring water companies as we work
together to look to develop optimal regional solutions.
Results and key financial performance indicators
The results published in this statement summarise our
performance for the period to 30 September 2017. The financial
statements are prepared under International Financial Reporting
Standards ("IFRS") and incorporate the performance of South East
Water Limited and our subsidiary, South East Water (Finance)
Limited.
Revenue for the period was GBP114.5 million compared with
GBP111.0 million for the same period in the previous year. The
increased revenue is largely due to the numbers of new properties
in the area and the increase in prices averaging 4.86 per cent for
the year. This is partially offset by lower consumption of
approximately 3.87 per cent due to the cooler and wetter than
average summer and the impact of metering on billing.
Net operating costs for the period to 30 September 2017 were
GBP79.0 million, which is some GBP6.1 million higher than the
corresponding period last year. The higher costs are mainly due to
a 30 per cent increase in business rates (GBP2.3 million),
increased depreciation due to the continued high investment in the
company's assets (GBP1.6 million), higher contractor and staff
costs due to reactive maintenance (including mains bursts) of the
network (GBP0.9 million) and increased energy costs of GBP0.2
million.
Operating profit was GBP39.3 million for the period to 30
September 2017 which compares with GBP42.0 million in the prior
year. Operating profit as a percentage of revenue has decreased
from 37.9 per cent in the first half of 2016/17 to 34.3 per cent in
the current year.
Finance costs have increased by GBP4.1 million from GBP22.9
million to GBP27.0 million. This reflects the higher RPI being
applied to the index linked loans and bonds during the period to 30
September 2017.
Profit before tax was GBP14.7 million compared with GBP21.8
million for the same period last year. This represents 12.8 per
cent of revenue compared with 19.7 per cent for the corresponding
period last year.
Deferred tax for the same period in 2016/17 was significantly
affected by the changes in future tax rates announced in that year.
This resulted in a tax credit of GBP3.6 million. There have been no
new adjustments to the headline rate of corporation tax announced
in the same period in 2017/18. Therefore, the company has incurred
a tax charge of GBP1.7 million for the period to 30 September 2017,
being GBP1.0 million of current tax on our ordinary operations and
GBP0.7 million of deferred tax due to taxation timing
differences.
As a result of the above, profit after tax has decreased from
GBP25.4 million to GBP13.0 million for the first six months of the
year.
Net cash generated from operations was GBP64.5 million for the
period to 30 September 2017 compared to GBP62.9 million in the same
period for the previous year. Also, during the period the company
drew down GBP15.0 million from our committed loan facilities to
ensure the capital programme could be maintained in line with the
plans submitted to our regulators.
The interest paid in the year is significantly less than the
previous year due to the timing of interest payments on our listed
bonds.
We continue to comply with the financial covenants set out in
our securitisation structure and continue to hold ratings from
Moody's and Standard & Poor's consistent with the requirements
of both our securitisation and our instrument of appointment.
Investing in customer satisfaction
We are the only water company which elected to include customer
satisfaction measures with potential financial penalties and
rewards within our five year performance commitments. It is
important for us to make sure we were hearing from all our
customers - including the silent majority - and therefore every
month we survey a random selection of customers to ask how
satisfied they are with the service we provide.
Across the business, initiatives have been running to keep
improving customer satisfaction and for the second year our scores
have improved. The period to 30 September 2017 saw an average of
75.57 per cent of customers surveyed say they are either satisfied
or very satisfied with the service we provide. This compares to an
average score of 74.76 per cent in the same period of 2016/17. In
particular we have been focused on improving customer satisfaction
with leakage and are pleased to say this has increased to an
average of 3.9 out of five for the six month period, close to our
target of 4.0.
We are delighted that our service incentive mechanism
qualitative score has been an average of 4.33 out of 5.00 for the
period to 30 September 2017 compared to 4.19 in the first half of
2016/17. One area of considerable improvement for our customers
this year is our joint initiative with Southern Water for us to
bill on their behalf for wastewater services, giving our customers
the convenience of just one bill - something customers have asked
for. Since this was agreed we have transferred more than 324,000
customers (to the end of November 2017) to the new joint billing
approach, with the remainder due to move by April 2018.
We are on track with our planned capital investment programme of
GBP83.9 million for the year 2017/18. For the period to 30
September 2017 we have invested GBP43.0 million on maintaining and
improving our network of pipes, treatment works, metering and other
key areas.
Our largest capital scheme during this five year investment
programme is the extension of our water treatment works at Bray,
Berkshire. The site is currently capable of treating up to 45
million litres of fresh drinking water per day and we plan to
extend the works to be able to treat up to 68 million litres per
day in order to secure water supplies for current and future
customers across Berkshire, Surrey and Hampshire. The scheme was
submitted for planning permission in November 2017.
Our purpose built laboratory in Farnborough has tested more than
100,000 samples in the first six months of the year. Along with
supporting our own water sampling programme, the UKAS accredited
laboratory provides a service to more than 200 other businesses and
organisations, from other water companies and local authorities
through to individual private supplies.
One of our customer commitments is to keep interruptions to
customer supplies to a minimum. Our underlying performance has been
good and most customers who have suffered an interruption have had
their water restored in under three hours, leading to an average
interruption time across our whole customer base of 3.9 minutes per
property for the period to 30 September 2017. Our target for the
full year is to remain below 12 minutes per property.
We have launched an "in your area" map on our website that
allows customers to quickly find out about any work or supply
interruptions in their area. Simply entering a postcode allows you
to zoom to an area of the map and find information about anything
from planned roadworks to reported leaks. Customers can then sign
up for email or text alerts to keep them updated on work that
interests them. This online information is proving popular and
between April and September we have sent more than 4,400 emails and
4,600 SMS text messages to help keep customers informed about our
work.
This is just one of the ways we try to keep all our customers
informed when we are working in their area. We also have our
priority services register where people can sign up for special
assistance, such as delivery of bottled water. We now have 16,708
customers on our register (at the end of September 2017) - an
increase of just over 1,000 in the last six months.
Our Customer Care Team works in partnership with many
organisations including other utilities to identify those customers
who may need extra support whether that be through information we
provide or if they have difficulty paying their water bills. The
team sensitively talks through their situation to understand their
circumstances and find the right tariff and payment options for
them.
At the end of September 2017 we had more than 12,500 customers
now signed up to our Social Tariff helping ensure their bills are
affordable.
The business retail market opens
On the 1 April 2017 we, along with the other water companies
nationally, were ready for the opening of a new retail market for
non-household customers. We welcomed the challenge and continue to
work hard to ensure the new market is successful. Our dedicated
Wholesale Service Desk is working closely with the new retailers to
ensure a smooth transition and that the non-household customers
continue to receive an excellent and reliable service.
South East Water Choice, our non-household retail business, has
had a successful first six months with most of our business
customers opting to stay and many choosing to now get both their
water and wastewater services from us.
Our sister company Water Choice, which is part of our group, has
also been offering water and wastewater retail services to all
business customers across England since market opening.
Our next step is to bring all our retail activities under one
roof. From 1 April 2018 all our water and sewerage retail business
will be undertaken by Water Choice. This will simplify our
operations, and help us provide a more efficient service and an
improved customer experience.
An application has been submitted to the Secretary of State for
the Department for Environment, Food and Rural Affairs (Defra) and
if given the go ahead the transition is planned to take place on 1
April 2018.
We will keep our customers fully informed along the way and
maintain the best level of service to our customers through our
knowledgeable and experienced team.
You can find out more about the new business retail market
itself at open-water.org.uk.
Principal risks and uncertainties
The principle risks and uncertainties facing the business are
set out in the Strategic Report within the group's Annual Report
for the financial year 2016/17, which can be found on the South
East Water website.
Going concern
The directors are satisfied that the group has sufficient
resources to continue in operation for the foreseeable future; a
period of not less than 12 months from the date of this report.
Looking ahead
This year is a particularly important one as we prepare and
consult on our long term plans. Along with our water resources
management plan, we are preparing our business plan for the period
2020-2025 and will publish this in September 2018.
We have been working closely with our Customer Challenge Group
(CCG), and engaging widely with customers and our communities to
help us develop a plan that ensures everything we do reflects all
of the many different people we serve and meets the needs of our
customers, communities and the environment.
As a business that ensures there is a reliable supply of quality
water for the south east of England, we know we have a potentially
significant impact on society. We intend for our plan to be one
that ensures we are building a future that puts the environment,
society and the next generation at the forefront.
I would like to take the opportunity to thank Zoe Mcleod who
chairs our CCG and all the members of the group who are giving us a
strong challenge to ensure we develop a plan that truly makes
customer engagement part of who we are at South East Water.
The board is excited by the future direction that we can see
developing through our conversations with customers and
stakeholders. There is real appetite for us to see South East Water
recognised as a leading business in customer engagement, not just
in the water industry, but to be an example for other industries
too.
We know that it is the employees and business partners at South
East Water and their dedication and passion for our vision that has
helped us continue to improve as they keep aiming for
five-out-of-five service for every one of our customers. On behalf
of the board I would like to thank everyone involved. We look
forward to the rest of this year and through 2018 as we work with
our customers to develop a sustainable future for water in our
community of the south east.
Nick Salmon
Chairman
14 December 2017
Statement of directors' responsibilities
The directors confirm that to the best of their knowledge:
-- the condensed group financial statements have been prepared
in accordance with IAS 34 Interim Financial Reporting as endorsed
by the European Union; and
-- the condensed group statements herein include a fair review
of the information required by the Disclosure and Transparency
Rules 4.2.7R.
The directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the group and enable them to ensure that the
group financial statements comply with the Companies Act 2006. They
are responsible for safeguarding the assets of the group and hence
for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The directors are also responsible for the maintenance and
integrity of the corporate and financial information included on
the company's website. Legislation in the United Kingdom governing
the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
Paul Butler
Managing Director
14 December 2017
Condensed group income statement
for the six months ended 30 September 2017
Six months Six months
ended ended
30 September 30 September
2017 2016
Notes GBP000 GBP000
Revenue 3 114,450 110,990
Group net operating costs 5 (79,009) (72,890)
Other income 3 3,840 3,939
Group operating profit 39,281 42,039
Finance costs 6 (26,957) (22,882)
Finance income 7 2,349 2,686
Profit before taxation 14,673 21,843
Taxation 8 (1,662) 3,596
-------------- -----------------------
Profit for the period 13,011 25,439
-------------- -----------------------
Earnings per share
Basic and diluted from continuing
operations 26.38p 51.59p
-------------- -----------------------
Profit for the current and prior period is generated entirely
from continuing operations.
Condensed group statement of comprehensive income
for the six months ended 30 September 2017
Six months Six months
ended ended
30 September 30 September
2017 2016
GBP000 GBP000
Profit for the period 13,011 25,439
-------------- ------------------------
Items that will not be reclassified
subsequently to profit or
loss:
Re-measurement of defined
benefit liability (3,159) (10,664)
Deferred tax on defined
benefit pension schemes 537 1,920
Impact of deferred tax rate
change in respect of pension
schemes - (389)
(2,622) (9,133)
-------------- ------------------------
Total comprehensive income
for the period attributable
to Owners of the Company 10,389 16,306
-------------- ------------------------
Condensed group statement of financial position
as at 30 September 2017
30 September 31 March 30 September
2017 2017 2016
Notes GBP000 GBP000 GBP000
Non-current assets
Intangible assets 10 10,830 11,058 10,777
Property, plant and
equipment 11 1,480,018 1,455,380 1,430,220
Amount due from parent
undertaking 190,013 190,013 190,013
Defined benefit pension
surplus 8,104 9,616 7,372
1,688,965 1,666,067 1,638,382
-------------- -------------- --------------
Current assets
Inventories 219 214 239
Trade and other receivables 12 77,336 72,113 72,627
Cash and cash equivalents 13 27,697 11,371 16,376
105,252 83,698 89,242
-------------- -------------- --------------
Total assets 1,794,217 1,749,765 1,727,624
-------------- -------------- --------------
Current liabilities
Loans and borrowings 14 (15,000) - -
Trade and other payables 16 (110,544) (96,130) (89,380)
Deferred income (7,169) (6,573) (6,608)
Provisions (2,361) (2,472) (3,860)
(135,074) (105,175) (99,848)
Non-current liabilities
Loans and borrowings 14/15 (888,586) (882,024) (872,610)
Derivative financial
instruments 14/15 (104,501) (100,916) (91,052)
Trade and other payables 14 (5,347) (4,261) (3,501)
Net deferred tax liabilities (133,080) (132,895) (131,326)
Defined benefit pension
liability (1,378) (1,851) (8,577)
Deferred income (72,157) (69,938) (67,234)
(1,205,049) (1,191,885) (1,174,300)
-------------- -------------- --------------
Total liabilities (1,340,123) (1,297,060) (1,274,148)
-------------- -------------- --------------
Net assets 454,094 452,705 453,476
-------------- -------------- --------------
Equity
Ordinary share capital 49,312 49,312 49,312
Revaluation reserve 258,965 261,549 264,063
Retained earnings 145,817 141,844 140,101
-------------- -------------- --------------
Total equity 454,094 452,705 453,476
-------------- -------------- --------------
The notes below are an integral part of these condensed group
financial statements.
Condensed group statement of changes in equity
for the six months ended 30 September 2017
Issued
share Revaluation Retained Total
capital reserve earnings equity
GBP000 GBP000 GBP000 GBP000
At 1 April 2017 49,312 261,549 141,844 452,705
--------- -------------- ----------- ---------
Profit for the
period - - 13,011 13,011
Other comprehensive
loss - - (2,622) (2,622)
Total comprehensive
income - - 10,389 10,389
Dividends (see
note 9) - - (9,000) (9,000)
Amortise revaluation
reserve - (3,064) 3,064 -
Release revaluation
on disposals - (43) 43 -
Deferred tax on
reserve releases - 523 (523) -
At 30 September
2017 49,312 258,965 145,817 454,094
--------- -------------- ----------- ---------
for the six months ended 30 September 2016
Issued
share Revaluation Retained Total
capital reserve earnings equity
GBP000 GBP000 GBP000 GBP000
At 1 April 2016 49,312 264,134 129,328 442,774
--------- -------------- ---------- --------
Profit for the
period - - 25,439 25,439
Other comprehensive
loss - - (9,133) (9,133)
--------- -------------- ---------- --------
Total comprehensive
income - - 16,306 16,306
Dividends (see
note 9) - - (8,000) (8,000)
Amortise revaluation
reserve - (3,064) 3,064 -
Release revaluation
on disposals - (20) 20 -
Deferred tax on
reserve releases - 617 (617) -
Impact of deferred
tax rate change - 2,396 - 2,396
--------- -------------- ---------- --------
At 30 September
2016 49,312 264,063 140,101 453,476
--------- -------------- ---------- --------
Condensed group statement of cash flows
for the six months ended 30 September 2017
Six months Six months
ended ended
30 September 30 September
2016 2016
Notes GBP000 GBP000
Operating activities
Net cash flow from operating
activities 64,450 62,882
Interest received 2,225 2,543
Interest paid (6,337) (17,354)
Group tax relief paid (2,000) (1,000)
Net cash flow before investing
and financing activities 58,338 47,071
-------------- ---------------
Investing activities
Proceeds from sale of property,
plant and equipment 103 159
Purchase of property, plant
and equipment (47,807) (39,436)
Purchase of intangible assets (1,414) (1,297)
Fixed asset contributions
received 1,106 932
Net cash flow used in investing
activities (48,012) (39,642)
-------------- ---------------
Financing activities
New bank loans received 15,000 -
Dividends paid to shareholder 9 (9,000) (8,000)
Net cash flow used in financing
activities 6,000 (8,000)
-------------- ---------------
Increase/(decrease) in cash
and cash equivalents 16,326 (571)
Cash and cash equivalents
at 1 April 11,371 16,947
-------------- ---------------
Cash and cash equivalents
at 30 September 13 27,697 16,376
-------------- ---------------
Notes to the condensed group financial statements
for the six months ended 30 September 2017
1. Basis of preparation
The condensed group financial statements for the six months
ended 30 September 2017 are set out above, and have been prepared
in accordance with the Disclosure and Transparency Rules of the
Financial Conduct Authority and IAS 34 Interim Financial Reporting
as endorsed by the European Union. The statements should be read in
conjunction with the financial statements for the year ended 31
March 2017, which have been prepared in accordance with
International Financial Reporting Standards ("IFRS") endorsed by
the European Union.
The condensed group financial statements are presented in
sterling.
These interim financial results are neither audited nor reviewed
by our auditor. The information for the year ended 31 March 2017
does not comprise statutory accounts within the meaning of section
434 of the Companies Act 2006. Statutory accounts for the year
ended 31 March 2017 were approved by the Board of Directors on 14
July 2017 and delivered to the Registrar of Companies. The report
of the auditors on those accounts was not qualified, did not
include any reference to any matters to which the auditors drew
attention by way of emphasis without qualifying the report and did
not contain any statement under section 498(2) or (3) of the
Companies Act 2006.
2. Accounting policies
Changes in accounting policies
The accounting policies adopted are consistent with those of the
financial statements for the year ended 31 March 2017 as described
in those financial statements.
3. Total income
Six months Six months
ended ended
30 September 30 September
2017 2016
GBP000 GBP000
Revenue
Unmetered water income 19,083 24,537
Metered water income 92,573 83,417
Other sales 2,794 3,036
-------------- --------------
Total revenue 114,450 110,990
-------------- --------------
Other income
Rental income 566 585
Sundry income 3,274 3,354
-------------- --------------
Total other income 3,840 3,939
-------------- --------------
Total income 118,290 114,929
-------------- --------------
All revenue is from customers within the United Kingdom.
4. Segmental analysis
The group's revenue mainly arises from the supply of water and
related activities. The activities of the group, for management
purposes, fall into three operating areas being the supply of
potable water on a wholesale basis, the supply of potable water and
waste water services on a retail basis, both of which are governed
by the Water Act 2014, and related non-regulated activities.
The group analyses results by segment to operating profits only,
therefore no segmental statement of financial position or statement
of cash flows are presented.
Period to 30 September Wholesale Retail Other
2017 activities activities activities Total
GBP000 GBP000 GBP000 GBP000
Total income 101,921 12,329 4,040 118,290
------------ ------------ ------------ ---------
Operating profit 36,019 1,725 1,537 39,281
------------ ------------ ------------
Finance income 2,349
Finance costs (26,957)
---------
Profit before taxation 14,673
Taxation (1,662)
---------
Profit for the
period 13,011
---------
Period to 30 September
2016
Total income 98,932 12,074 3,923 114,929
------------ ------------ ------------ ---------
Operating profit 38,610 1,560 1,869 42,039
------------ ------------ ------------
Finance income 2,686
Finance costs (22,882)
---------
Profit before taxation 21,843
Taxation 3,596
---------
Profit for the
period 25,439
---------
5. Net operating costs
Six months Six months
ended ended
30 September 30 September
2017 2016
GBP000 GBP000
Employee benefits expenses 14,662 13,550
Asset expenses 24,348 22,616
Other operating expenses 39,999 36,724
-------------- --------------
79,009 72,890
-------------- --------------
6. Finance costs
Six months Six months
ended ended
30 September 30 September
2017 2016
GBP000 GBP000
Effective interest on listed
debt 11,129 10,950
Fair value movements on
interest rate swap 3,585 3,825
Indexation on listed debt 3,143 1,729
Interest on index linked
loans 5,810 5,657
Indexation on index linked
loans 3,146 727
Other finance costs 1,189 1,208
28,002 24,096
Less: interest capitalised (1,045) (1,214)
-------------- --------------
26,957 22,882
-------------- --------------
7. Finance income
Six months Six months
ended ended
30 September 30 September
2017 2016
GBP000 GBP000
Interest receivable from group
undertakings 2,210 2,462
Pension fund finance credit 124 168
Interest receivable on bank
balances and short term deposits 15 56
2,349 2,686
-------------- --------------
8. Taxation
Six months Six months
ended ended
30 September 30 September
2017 2016
GBP000 GBP000
Current taxation charge 940 1,717
Deferred taxation charge/(credit) 722 (5,313)
1,662 (3,596)
------------------------- --------------
The current tax charge is recognised based on management's
estimate of the weighted average annual corporation tax rate
expected for the full financial year.
9. Dividends
Six months Six months
ended ended
30 September 30 September
2017 2016
GBP000 GBP000
Equity dividends paid during
the period of 18.3p per share
(2016: 16.2p) 9,000 8,000
-------------- --------------
10. Intangible assets
GBP000
Net book amount
At 1 April 2017 11,058
Additions for the period 1,953
Reclassification of assets in the period (539)
Amortisation for the period (1,642)
--------
At 30 September 2017 10,830
--------
Net book amount
At 1 April 2016 11,046
Additions for the year 3,197
Amortisation for the year (3,180)
Disposals for the year (2)
Impairment for the year (3)
--------
At 31 March 2017 11,058
--------
Net book amount
At 1 April 2016 11,046
Additions for the period 1,297
Amortisation for the period (1,566)
--------
At 30 September 2016 10,777
--------
11. Property, plant and equipment
GBP000
Net book amount
At 1 April 2017 1,455,380
Additions for the period 46,908
Reclassification of assets in the period 539
Disposals for the period (88)
Depreciation for the period (22,721)
At 30 September 2017 1,480,018
----------
Net book amount
At 1 April 2016 1,412,184
Additions for the year 86,625
Disposals for the year (116)
Depreciation for the year (43,275)
Impairment for the year (38)
----------
At 31 March 2017 1,455,380
----------
Net book amount
At 1 April 2016 1,412,184
Additions for the period 39,245
Disposals for the period (63)
Depreciation for the period (21,120)
Impairment for the period (26)
----------
At 30 September 2016 1,430,220
----------
12. Trade and other receivables
30 September 31 March 30 September
2017 2017 2016
GBP000 GBP000 GBP000
Financial asset receivables
Trade receivables 33,580 32,669 31,033
Accrued income 36,879 32,433 35,288
Amounts due from group
undertakings 273 96 37
70,732 65,198 66,358
------------- --------- -------------
Non-financial asset
receivables
Prepayments 4,727 3,302 4,438
Other receivables 1,877 3,613 1,831
------------- --------- -------------
6,604 6,915 6,269
------------- --------- -------------
77,336 72,113 72,627
------------- --------- -------------
13. Cash and cash equivalents
30 September 31 March 30 September
2017 2017 2016
GBP000 GBP000 GBP000
Cash at bank and in
hand 27,697 11,371 9,376
Short term bank deposits - - 7,000
------------- --------- -------------
27,697 11,371 16,376
------------- --------- -------------
14. Financial liabilities
30 September 31 March 30 September
2017 2017 2016
GBP000 GBP000 GBP000
Non-current liabilities
Irredeemable debenture
stock 991 991 991
Listed bonds 526,284 523,281 520,563
Index linked loans 361,311 357,752 351,056
------------- --------- -------------
Loans and borrowings 888,586 882,024 872,610
Derivative financial instruments 104,501 100,916 91,052
Trade and other payables 5,347 4,261 3,501
------------- --------- -------------
998,434 987,201 967,163
------------- --------- -------------
Current liabilities
Other bank loans 15,000 - -
------------- --------- -------------
Trade and other payables which fall under the heading of
financial liabilities are reported under note 16.
15. Financial Instruments
Fair values of financial assets and financial liabilities
Fair value is the amount at which a financial instrument could
be exchanged in an arm's length transaction between informed and
willing parties. In the opinion of the directors, the fair values
of the financial assets and liabilities of the group (apart from
the specific items shown in the fair value table below) are not
materially different from the book values.
Book Fair Book Fair Book Fair
Value Value Value Value Value Value
30 September 30 September 31 31 30 September 30 September
2017 2017 March March 2016 2016
GBP000 GBP000 2017 2017 GBP000 GBP000
GBP000 GBP000
Loans and receivables
Amounts due
from parent
undertaking 190,013 173,920 190,013 140,373 190,013 193,321
-------------- -------------- ---------- ------------ -------------- --------------
Financial liabilities
at amortised
cost
Irredeemable
debentures 991 841 991 766 991 921
Listed bonds 526,284 631,450 523,281 659,312 520,563 633,743
Index linked
loans 361,311 660,655 357,752 441,423 351,056 489,057
-------------- -------------- ----------
888,586 1,292,946 882,024 1,101,501 872,610 1,123,721
-------------- -------------- ---------- ------------ -------------- --------------
The following table details the financial instruments that are
carried in the group's books at the fair value at 30 September
2017.
Book and Book and Book and
Fair Value Fair Value Fair Value
30 September 31 March 30 September
2017 2017 2016
GBP000 GBP000 GBP000
At fair value through
the income statement
Derivative financial instruments
- Interest rate swap 104,501 100,916 91,052
-------------- ------------ --------------
The book value of the interest rate swap has been adjusted to
reflect its fair value.
Fair value hierarchy
The group held the following financial instruments measured at
fair value:
Total Level Level Level
GBP000 1 2 3
GBP000 GBP000 GBP000
Financial liabilities
at fair value through
the income statement
30 September 2017
Interest rate swap (104,501) - (104,501) -
------------ -------- ------------ --------
31 March 2017
Interest rate swap (100,916) - (100,916) -
------------ -------- ------------ --------
30 September 2016
Interest rate swap (91,052) - (91,052) -
------------ -------- ------------ --------
During the reporting period ended 30 September 2017, there were
no transfers between Level 1 and Level 2 fair value measurements
and no transfers into and out of Level 3 fair value
measurements.
The group uses the following hierarchy for determining and
disclosing the fair value of financial instruments by valuation
technique:
-- Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
-- Level 2: other techniques for which all inputs with a
significant effect on the recorded fair value are observable,
either directly or indirectly; and
-- Level 3: techniques using inputs which have a significant
effect on the recorded fair value that are not based on observable
market data.
16. Trade and other payables
30 September 31 March 30 September
2017 2017 2016
GBP000 GBP000 GBP000
Financial liability
payables
Trade payables 10,674 14,339 11,724
Amounts due to group
undertakings 10,191 11,266 10,839
Other payables 5,119 949 675
Accruals 46,088 33,354 29,682
------------- --------- -------------
72,072 59,908 52,920
------------- --------- -------------
Non-financial liability
payables
Payments received
in advance 37,516 35,207 35,480
Other taxes and social
security 956 1,015 980
------------- --------- -------------
38,472 36,222 36,460
------------- --------- -------------
110,544 96,130 89,380
------------- --------- -------------
17. Subsequent events
There have been no post balance sheet events that require
disclosure.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BSBDDDBBBGRX
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