Interim Results
29 November 2007 - 8:01AM
UK Regulatory
RNS Number:7153I
Bristol Water PLC
29 November 2007
BRISTOL WATER plc
Announcement of interim results for the six months ended 30 September 2007
Bristol Water plc is a subsidiary of Sociedad General de Aguas de Barcelona S.A.
For further information:
Alan Parsons, Managing Director
Bristol Water plc
Tel: 0117 953 6407
or contact:
Bristol Water Corporate Affairs on 0117 953 6470 during office hours or 07831
453924 or 07831 518964 at any time
HIGHLIGHTS - REPORTED UNDER UK GAAP
Six months ended 30 September 2007 2006
(unaudited) (unaudited)
#m #m
Turnover 46.0 43.3
Operating profit 14.2 14.0
Profit before taxation 10.6 12.1
Profit after taxation 9.9 9.7
Regulatory Capital Value (RCV) - forecast year end 275 256
Net debt (excluding 8.75% irredeemable cumulative
preference shares) as percentage of forecast RCV
at year end 68% 67%
* Operating profit #14.2m - 1% increase
* Profit before taxation #10.6m - 12% decrease reflecting higher interest
costs
* Capital investment of #26.3m in period
* Net debt, excluding irredeemable cumulative preference shares, of
#185.6m - approximately 68% of projected RCV at 31 March 2008
Bristol Water plc supplies water to over one million people and businesses in an
area of almost 2,400 square kilometres, centred on Bristol.
CHAIRMAN'S STATEMENT
Introduction
The summer floods in Gloucestershire were the focus of considerable media
attention. Services to our customers were not affected by the events and we were
pleased that we were able to provide considerable practical support to Severn
Trent who were at the centre of the crisis.
This event clearly demonstrates how important it is for the water industry to
have robust and resilient infrastructure and operating systems. This will be an
important factor in the next Ofwat price review, which will result in the
setting of price limits for the 5-year period 2010/11 to 2014/15. The first
major milestone in the process is the submission to Ofwat in December 2007 of a
strategic direction statement setting out our vision and outline plans for the
next 25 years.
Operational performance
We are now at the mid point of the current 5 year regulatory period 2005-10 and
are continuing to make good progress in the delivery of the outputs required by
Ofwat's determination of price limits for the period. Three major capital
schemes are nearing completion:
* A #24m project to improve the security of supply for a population of
almost 200,000 in the northern and eastern parts of Bristol and surrounding
areas. This scheme would have helped to deal with the types of problems
experienced in Gloucestershire during this summer's flooding.
* A #11m project to upgrade our Banwell treatment works to improve its
effectiveness in dealing with a range of different raw water qualities.
* A #7m project to construct a new treatment works to treat water from the
River Axe.
In total, we invested #26m in capital projects during the period. We currently
anticipate a total investment programme for the 5-year regulatory period of
about #172m (in current prices, before grants and contributions). This is
broadly in line with Ofwat's assumptions.
Our customer service performance remains at high levels with customer surveys
consistently showing high satisfaction levels.
Application for an interim determination of K (IDOK)
In 2004 Ofwat set price limits for all English and Welsh water companies for
five years ended 31 March 2010. The price limits were based on a very detailed
analysis of the costs and investments that companies were expected to incur to
deliver services to customers.
When setting price limits, Ofwat identified a number of uncertainties where, if
the original assumptions proved to be wrong, price limits could be reviewed by
an interim determination. In three of these areas Bristol Water is experiencing
significant increases in costs arising from:
* A higher number of domestic customers opting for a free meter
* An increase in the level of bad debts i.e. customers not paying their
bills
* Water abstraction charges levied by the Environment Agency
During September we therefore applied to Ofwat for a change to the original
price limits for the next two years.
Ofwat have considered our application and issued their draft determination at
the beginning of November. There is now a period of public consultation and
discussion between Ofwat and the company. Ofwat has stated it will issue its
final determination by no later than 14 December.
Ofwat's draft determination proposes real price increases (K's) of 4.6% for 2008
/09 and minus 2.0% for 2009/10 compared to the original price limits of 0.7% in
2008/09 and minus 2.3% in 2009/10.
We are pleased that Ofwat have recognised that we are experiencing extra costs
in specific areas beyond our control. We have confirmed to Ofwat that in overall
terms the draft determination is acceptable but have proposed an alternative
profile achieving the same recovery of costs with real price increases of
approximately 3.6% in 2008/09 and nil in 2009/10.
Our current average annual domestic water supply bill is some 6% lower than the
average bill for English and Welsh companies and significantly lower than the
average bills of some of our nearest neighbours. Even with the new proposed
price limits our average bill would increase in real terms to only around
#144 by 2009/10 and represents excellent value for the services we provide to
customers.
Financial performance
Operating profit for the period increased by #0.2m to #14.2m. The average 5.4%
increase in charges to customers under the approved price limits was more than
offset by inflation on operating costs including the impact of increased energy
cost and additional depreciation related to the capital investment programme.
Energy costs increased by #1.1m reflecting the impact of a price increase in
line with general market movements of approximately 65% in October 2006. New
contracts apply from October 2007 and prices are approximately 20% lower than
those for October 2006.
Net interest charges, excluding those related to retirement benefits and the
preference share dividend, increased by #1.3m to #3.6m. This mainly reflects the
increase in net debt resulting from the financing of the capital expenditure
programme and an increase in the inflation element of the charge related to our
indexed linked debt.
Profit before tax reduced by #1.5m to #10.6m.
The tax charge of #0.7m represents an effective tax rate of 7% (2006: 20%). The
charge is net of a #1.7m gain due to a reduction in deferred tax liabilities
(after discounting) following the reduction in corporation tax rates from April
2008 and other changes confirmed in the Finance Act 2007.
Net debt, excluding the irredeemable preference shares, increased to #185.6m (31
March 2007 #176.3m) and represents approximately 68% of forecast Regulatory
Capital Value at 31 March 2008. As previously indicated we currently anticipate
that this ratio will increase to between 70% and 80% for the remainder of the
5-year regulatory period ending in March 2010.
Prospects
In the Directors' report and business review within the company's Annual Report
and Accounts 2007 we set out a summary of the key risks and uncertainties that
the company faces. The main risk areas are operational problems and performance,
regulatory requirements and developments and financial factors.
The results for the second half of the year will include the following:
* A reduction in energy costs in line with new contracts.
* An increase in interest charges reflecting increased net debt and higher
indexation charges related to our index linked debt (1.6% in the six months
to 30 September 2007, 2.2% in the six months to 31 March 2008).
* Increased debt to finance the continuing planned high levels of capital
investment.
Dividends
The company policy is to pay an annual level of ordinary dividends comprising:
* A base level reflecting the cost of capital allowed by Ofwat in the
5-year determination of price limits, adjusted to reflect actual gearing
levels and where appropriate actual performance relative to Ofwat's
assumptions.
* An amount equal to the post-tax interest receivable from Bristol Water
Group Ltd (the ultimate UK parent company) in respect of intercompany loans.
During the period an interim ordinary dividend for 2007/08 in respect of the
intercompany loan interest element of #1.4m was paid.
A final dividend of #6.0m in respect of 2006/07 was approved at the Annual
General Meeting and accrued in these statements. It was paid on 25 October 2007.
A second interim ordinary dividend for 2007/08 in respect of the base level
dividend of #3.1m was approved by the Board on 29 November 2007 and will be paid
during the first quarter of 2008.
Board membership
In September, Tony Harding joined the Board as a non-executive director. Tony is
a senior executive with Suez Environment (the largest shareholder in Agbar) and
has extensive water sector experience including previous positions as Managing
Director of Northumbrian Water and Essex & Suffolk Water.
Andy Nield leaves the Board as these interim accounts are issued. He has made a
substantial contribution to the development of the company and the wider Bristol
Water Group. He has been involved in all major corporate transactions in his
seven years with us. We thank him for his excellent contribution and wish him
well for the future. Stefano Pellegri has been appointed to take his place as
Finance Director.
Moger Woolley
Chairman
29 November 2007
PROFIT AND LOSS ACCOUNT
For the six months ended 30 September 2007
Six months to Six months to Year to
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited)
Note #m #m #m
Turnover 2 46.0 43.3 86.3
Operating costs 3 (31.8) (29.3) (61.1)
-------- ------- -------
Operating profit 14.2 14.0 25.2
Dividends on 8.75% irredeemable
cumulative preference shares (0.5) (0.5) (1.1)
Interest in respect of retirement
benefit surplus 0.5 0.9 1.5
Other net interest payable 4 (3.6) (2.3) (6.7)
-------- ------- -------
(3.6) (1.9) (6.3)
-------- ------- -------
Profit on ordinary activities
before taxation 10.6 12.1 18.9
Taxation on profit on ordinary
activities 5 (0.7) (2.4) (2.5)
-------- ------- -------
Profit on ordinary activities
after taxation 9.9 9.7 16.4
-------- ------- -------
Earnings per ordinary share -
basic and diluted 6 164.5p 160.5p 273.0p
-------- ------- -------
Dividend per ordinary share 12
- declared or proposed in
respect of the period 75.28p 23.60p 147.10p
-------- ------- -------
- paid during the period 23.60p 81.62p 105.09p
-------- ------- -------
All activities above relate to the continuing operations of the company.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the six months ended 30 September 2007
Six months to Six months to Year to
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited)
Note #m #m #m
Profit attributable to
Bristol Water plc ordinary
shareholders 9.9 9.7 16.4
Actuarial gains recognised in
respect of retirement benefit
surplus 10,11 2.3 1.1 4.8
Attributable deferred
taxation 10,11 (0.7) (0.3) (1.3)
Deferred tax asset reversal
upon closure of equity-settled
share based payment scheme - - (0.6)
-------- ------- -------
Total recognised gains for
the period 11.5 10.5 19.3
-------- ------- -------
The accompanying notes to the accounts form an integral part of these
statements.
BALANCE SHEET
30 September 2007
At At At
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited)
Note #m #m #m
Fixed assets 7 232.8 207.2 218.7
Investment - Loans to ultimate UK
holding company 68.5 68.5 68.5
Current assets
Stocks 0.9 0.7 0.8
Debtors 24.5 23.0 20.8
Other investments 8 17.5 31.9 28.0
Cash at bank 8 3.8 1.6 2.8
-------- ------- -------
46.7 57.2 52.4
-------- ------- -------
Creditors: amounts falling due
within one year
Short term borrowings 8 (11.7) (2.4) (2.5)
Ordinary dividends approved but
not paid at period end 12 (6.0) - -
Other creditors (25.7) (21.9) (24.1)
-------- ------- -------
(43.4) (24.3) (26.6)
-------- ------- -------
Net current assets 3.3 32.9 25.8
-------- ------- -------
Total assets less current
liabilities 304.6 308.6 313.0
Creditors: amounts falling due
after more than one year
8 (195.2) (203.1) (204.6)
8.75% irredeemable cumulative
preference shares 8 (12.5) (12.5) (12.5)
Deferred income (9.7) (10.0) (9.4)
Provision for deferred tax 9 (18.8) (19.8) (19.7)
Retirement benefit surplus, net
of attributable deferred
taxation 10 10.8 4.5 8.3
-------- ------- -------
Net assets 79.2 67.7 75.1
-------- ------- -------
Capital and reserves
Called up share capital 6.0 6.0 6.0
Share premium 4.4 4.4 4.4
Other reserves 5.8 5.8 5.8
Profit and loss account 63.0 51.5 58.9
-------- ------- -------
Shareholders' funds 11 79.2 67.7 75.1
-------- ------- -------
The accompanying notes to the accounts form an integral part of this statement.
CASH FLOW STATEMENT
For the six months ended 30 September 2007
Six months to Six months to Year to
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited)
Note #m #m #m
Net cash inflow from operating
activities 13 20.6 18.0 42.6
-------- ------- -------
Returns on investments and servicing
of finance
Interest received 2.8 3.1 6.0
Interest paid on term loans and
debentures (4.5) (3.8) (8.7)
Interest paid on finance leases (0.5) (1.2) (1.0)
Dividends paid on 8.75%
irredeemable cumulative preference
shares (0.5) (0.5) (1.1)
-------- ------- -------
(2.7) (2.4) (4.8)
-------- ------- -------
Corporation tax paid (0.4) (0.3) (1.0)
-------- ------- -------
Capital expenditure and investing
activities
Purchase of fixed assets (26.6) (17.3) (41.2)
Contributions received 2.6 1.6 3.5
-------- ------- -------
(24.0) (15.7) (37.7)
-------- ------- -------
Equity dividends paid (1.4) (4.9) (6.3)
-------- ------- -------
Cash outflow before management (7.9) (5.3) (7.2)
of liquid resources and financing
Management of liquid resources
Being decrease in other
investments 10.5 7.6 11.5
-------- ------- -------
Financing
Capital element of lease
repayments (1.6) (1.4) (2.2)
Payments in respect of swap
liability - (0.3) (0.3)
-------- ------- -------
(1.6) (1.7) (2.5)
-------- ------- -------
Increase in cash 13 1.0 0.6 1.8
Cash, beginning of period 2.8 1.0 1.0
-------- ------- -------
Cash, end of period 3.8 1.6 2.8
-------- ------- -------
The accompanying notes to the accounts form an integral part of this statement.
NOTES TO THE INTERIM RESULTS
For the six months ended 30 September 2007
Note Accounting policies
1:
The financial information contained in this interim announcement does not
constitute statutory accounts within the meaning of section 240 of the
Companies Act 1985. The interim results, which have not been audited but
have been reviewed by the company's auditors, have been prepared on the
basis of the accounting policies adopted by Bristol Water plc for the year
ended 31 March 2007 as set out in the Annual Report and Accounts. A copy of
the statutory accounts for that year has been delivered to the Registrar of
Companies. The auditors' report on those accounts was not qualified and did
not contain statements under S.237(2) or (3) of the Companies Act 1985.
As outlined in the company's Annual Report and Accounts for the year ended
31 March 2007, the company does not currently intend to adopt IFRS until UK
GAAP and IFRS are fully harmonised.
Note Turnover
2:
Turnover is wholly derived from water supply and related activities in the
United Kingdom. The maximum level of prices the company may levy for the
majority of water charges is controlled by the Water Services Regulation
Authority (Ofwat) through the RPI + K price formula.
Note Operating costs
3:
Six months to Six months to Year to
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited)
#m #m #m
Operating costs comprise -
Payroll cost, net of recharges to fixed assets, and
including retirement benefit costs and equity-settled
share based payments 6.1 5.7 11.2
Other operating costs 15.8 14.6 31.0
Depreciation, net of amortisation of deferred income 9.9 9.0 18.9
------- ------- -------
31.8 29.3 61.1
------- ------- -------
Note Other net interest payable
4:
Six months to Six months to Year to
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited)
#m #m #m
Other net interest payable relates to -
Bank borrowings 0.8 0.8 1.6
Term loans and debentures
- interest charges 3.6 3.5 7.1
- indexation of principal 1.5 0.5 2.9
Finance leases 0.5 0.5 1.0
------- ------- -------
6.4 5.3 12.6
------- ------- -------
Less:
Interest receivable from loan to Bristol Water
Group Ltd (2.0) (2.0) (4.0)
Other external investments and deposits (0.8) (1.0) (1.9)
------- ------- -------
(2.8) (3.0) (5.9)
------- ------- -------
Total other net interest 3.6 2.3 6.7
------- ------- -------
Note Taxation on profit on ordinary activities
5:
Six months to Six months to Year to
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited)
#m #m #m
The charge for taxation comprises -
Current tax:
Corporation tax at 30% 1.6 1.9 2.4
Advanced Corporation Tax (ACT)
previously
recovered now written off - - 0.5
Adjustments to prior periods - (0.2) (1.1)
------- ------- -------
Total current tax 1.6 1.7 1.8
------- ------- -------
Deferred tax:
Current period movement 1.5 1.8 2.7
Adjustment to prior periods following changes made
in Finance Act 2007 (3.5) - -
Other adjustments to prior periods - - 0.7
Effect of discounting 1.1 (1.1) (2.7)
------- ------- -------
Total deferred tax (0.9) 0.7 0.7
------- ------- -------
Total taxation on profit on ordinary activities 0.7 2.4 2.5
------- ------- -------
The overall tax charge represents 7% (six months to 30 September 2006: 20%;
year ended 31 March 2007: 13%) of the profit before taxation. The charge is
net of a #1.7m discounted gain (#3.5m gain before discounting) due to a
reduction in deferred tax liabilities following the reduction in
corporation tax rates from April 2008 and the removal of the industrial
buildings allowance clawback provisions. Both of the changes were confirmed
in the Finance Act 2007.
Note Earnings per ordinary share - basic and diluted
6:
Six months to Six months to Year to
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited)
m m m
Earnings per share have been calculated as follows -
Earnings #9.9 #9.7 #16.4
Weighted average number of ordinary shares in issue 6.0 6.0 6.0
------- ------- -------
Note Fixed assets
7:
Six months to Six months to Year to
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited)
#m #m #m
The movement in fixed assets comprises -
Net book value, beginning of period 218.7 197.0 197.0
Additions 26.3 20.8 45.5
Grants and contributions (2.1) (1.2) (4.9)
Depreciation (10.1) (9.4) (18.9)
------- ------- -------
Net book value, end of period 232.8 207.2 218.7
------- ------- -------
Note Net borrowings
8:
At At At
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited)
#m #m #m
Net borrowings comprise -
Debt due after one year, excluding
8.75% irredeemable cumulative preference shares 195.2 203.1 204.6
Current portion of debt 11.7 2.4 2.5
------- ------- -------
206.9 205.5 207.1
Cash at bank and other investments (21.3) (33.5) (30.8)
------- ------- -------
Net borrowings excluding 8.75% 185.6 172.0 176.3
irredeemable cumulative preference shares
8.75% irredeemable cumulative preference 12.5 12.5 12.5
shares
------- ------- -------
Net borrowings 198.1 184.5 188.8
------- ------- -------
Note Provision for deferred tax
9:
At At At
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited)
#m #m #m
Deferred tax liability 37.6 36.0 38.7
Effect of discounting (15.1) (14.3) (16.0)
------- ------- -------
Net provision, including deferred tax on
retirement benefit surplus 22.5 21.7 22.7
Less, attributable to retirement
benefit surplus (3.7) (1.9) (3.0)
Net provision, excluding deferred ------- ------- -------
tax on retirement benefit surplus 18.8 19.8 19.7
------- ------- -------
Note Retirement benefits
10:
Pension arrangements for the majority of the company's employees are
provided through the company's membership of the Water Companies' Pension
Scheme (WCPS), which provides defined benefits based on final pensionable
pay. Bristol Water plc's membership of WCPS is through a separate section
of the scheme. The assets of the section are held separately from those of
the company and are invested by discretionary fund managers appointed by
the trustees of the scheme. The section has been closed to new entrants and
all new eligible employees are offered stakeholder pensions.
In addition to providing benefits to employees and ex-employees of Bristol
Water plc, the section provides benefits to employees and ex-employees of
Bristol Water Holdings Limited and former Bristol Water plc employees who
transferred to Bristol Wessex Billing Services Ltd. The majority of the
section assets and liabilities relate to Bristol Water plc employees and
ex-employees.
The company made a contribution of #7.0m to WCPS in July 2005 and also
agreed to make additional contributions of #1.0m in each of the four years
beginning 1 April 2006 and a further #0.9m in 2010/11. The amounts are in
addition to the normal pension contributions required by the WCPS trustees.
In accordance with FRS 17 actuarial gains and losses are recognised
immediately in the Statement of Total Recognised Gains and Losses.
In summary assets and liabilities under FRS 17 were:
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited)
#m #m #m
Market value of section assets 135.4 126.3 131.3
Present value of liabilities (112.3) (119.9) (120.0)
------- ------- -------
Surplus in the section 23.1 6.4 11.3
Restriction of surplus due to asset
limit under FRS 17 (8.6) - -
------- ------- -------
14.5 6.4 11.3
Deferred taxation (3.7) (1.9) (3.0)
------- ------- -------
Net retirement benefit surplus 10.8 4.5 8.3
------- ------- -------
Note Shareholders' funds
11:
Six months to Six months to Year to
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited)
#m #m #m
Movement in shareholders' funds -
At beginning of period 75.1 62.1 62.1
Profit for the period 9.9 9.7 16.4
Actuarial gains recognised in respect of
retirement benefit surplus 2.3 1.1 4.8
Attributable deferred taxation (0.7) (0.3) (1.3)
Ordinary dividends (note 12) (7.4) (4.9) (6.3)
Deferred tax asset written off
upon closure of equity-settled
share based payment scheme - - (0.6)
------- ------- -------
End of period 79.2 67.7 75.1
------- ------- -------
Note 12: Ordinary dividends
Six months to Six months to Year to
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited)
#m #m #m
* Dividends in respect of 2005/06:
Fourth interim and final dividend of 58.02
pence per share, approved by the Board on
16 May 2006 - 3.5 3.5
* Dividend in respect of 2006/07:
First interim dividend of 23.60 pence per
share, approved by the Board on 28 September
2006 - 1.4 1.4
Second interim dividend of 23.47 pence per
share, approved by the Board on 22 March 2007 - - 1.4
Final dividend of 100.03 pence per share,
approved at the Annual General Meeting
6 August 2007 6.0 - -
* Dividend in respect of 2007/08:
First interim dividend of 23.60 pence per
share, approved by the Board on
27 September 2007 1.4 - -
-------- ------- -------
7.4 4.9 6.3
--------- ------- -------
A final dividend in respect of 2006/07 of 100.03 pence per share, totalling
#6.0m, was approved at the Annual General Meeting on 6 August 2007 and paid
on 25 October 2007.
A second interim ordinary dividend for 2007/08 of 51.68 pence per share
totalling #3.1m was approved by the Board on 29 November 2007 and will be
paid in the first quarter of 2008. In accordance with FRS 21 this dividend is
not recognised in these accounts as a liability.
Note Supplementary cash flow information
13:
Six months to Six months to Year to
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited)
#m #m #m
a) Reconciliation of operating profit to net
cash inflow from operating activities -
Operating profit 14.2 14.0 25.2
Depreciation net of amortisation
of deferred income 9.9 9.0 18.9
Difference between pension
charges and normal contributions 0.2 0.4 0.5
------- ------- -------
Cash flow from operations 24.3 23.4 44.6
Working capital movements
Stocks (0.1) - (0.1)
Debtors (3.7) (4.0) (1.8)
Creditors and provisions 0.6 (1.0) 0.9
Additional contributions to
pension scheme, including
payments in respect of staff
retiring early due to
restructuring programme (0.5) (0.4) (1.0)
------- ------- -------
Net cash inflow from operating activities 20.6 18.0 42.6
------- ------- -------
Six months to Six months to Year to
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited)
#m #m #m
b) Reconciliation of net cash flow
to movement in net borrowings -
Increase in cash in the period 1.0 0.6 1.8
Cash used to repay borrowings 1.6 1.7 2.5
Decrease in other investments (10.5) (7.6) (11.5)
------- ------- -------
Increase in net borrowings (7.9) (5.3) (7.2)
Movement in net debt not
affecting cash flow (1.4) (0.5) (2.9)
Net borrowings, beginning of
period, including 8.75%
irredeemable cumulative
preference shares (188.8) (178.7) (178.7)
------- ------- -------
Net borrowings, end of period,
including 8.75% irredeemable
cumulative preference shares (198.1) (184.5) (188.8)
------- ------- -------
Note 14: Costs related to a director leaving will be reimbursed by the ultimate
UK parent company.
Note Suez / La Caixa acquisition of Abgar
15: At 31 March 2007 approximately 49.7% of the share capital of Agbar was
controlled by the French group Suez and the Spanish bank La Caixa. In April
2007 Suez, La Caixa and their joint venture Hisusa undertook to make a bid
for the entire share capital of Agbar. They had secured a further 6.7%
through an irrevocable undertaking; this 6.7% interest was acquired on
21 November, giving Suez and La Caixa a 56.4% stake in Agbar, at which time
Suez and La Caixa declared that as a consequence of the mandatory bid they
would excercise joint control over Agbar. The corresponding mandatory bid
over 100% of shares in Agbar still requires authorisation by the Spanish
Securities Regulator.
The outcome of this acquisition and the subsequent mandatory bid may change
the identity of Bristol Water plc's ultimate holding company, which is
currently considered to be Agbar for the purposes of the Condition P of
Bristol Water's Instrument of Appointment. Ofwat are being kept informed
of material developements.
Note Circulation
16: This interim announcement is being sent to all shareholders and debenture
holders. Copies are available to the public from the company's registered
office at PO Box 218, Bridgwater Road, Bristol, BS99 7AU and on the Bristol
Water web site: http://www.bristolwater.co.uk.
DIRECTORS' RESPONSIBILITIES FOR THE PREPARATION OF INTERIM FINANCIAL STATEMENTS
We confirm that to the best of our knowledge:
* the condensed set of financial statements has been prepared in
accordance with UK GAAP:
* the Chairman's statement includes a fair review of the
information required to indicate important events during the
first six months of the financial year and their impact on the
condensed set of financial statements, and a description of
principal risks and uncertainties for the remaining six months of
the financial year.
By order of the Board
S C Robson
Secretary
29 November 2007
INDEPENDENT REVIEW REPORT TO BRISTOL WATER PLC
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2007 which comprises the profit and loss account, the statement of
total recognised gains and losses, the balance sheet, the cash flow statement
and related notes 1 to 15. We have read the other information contained in the
half-yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
set of financial statements.
This report is made solely to the company in accordance with International
Standard on Review Engagements 2410 issued by the Auditing Practices Board. Our
work has been undertaken so that we might state to the company those matters we
are required to state to them in an independent review report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the company are
prepared in accordance with United Kingdom Generally Accepted Accounting
Practice. The condensed set of financial statements included in this half-yearly
financial report have been prepared in accordance with the accounting policies
the group intends to use in preparing its next annual financial statements.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the accompanying interim financial information is not prepared, in all
material respects, in accordance with the Disclosure and Transparency Rules of
the United Kingdom's Financial Services Authority.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditor
29 November 2007
Bristol, UK
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKFKDABDDPDB
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