Announcement of unaudited preliminary financial results for
the year ended 31 March 2024
Bristol Water plc (the "Company") is
a public company, limited by shares, with irredeemable preference
shares and debenture stock listed on the London Stock
Exchange.
On 1st February 2023 the Company's
licence, trading, assets and liabilities were transferred to South
West Water Limited. Post this statutory transfer the only
transactions in the income statement relate to the remaining
preference shares, debentures and pension asset. The
remaining obligations relating to these are met from matching
intra-group contracted assets and related receipts.
The Company announces its unaudited
preliminary results for the twelve months ending 31 March 2024,
which are set out below and can also be accessed via the Company's
website.
FINANCIAL PERFORMANCE
|
|
2023/24
|
2022/23
(10 months
trading)
|
|
Revenue
|
-
|
£109.0m
|
|
Underlying revenue
1,2
|
-
|
£115.6m
|
|
Underlying profit/(loss) before
tax 1
|
£0.2m
|
(£3.8m)
|
|
Non-underlying items before tax
1
|
-
|
(£20.9m)
|
|
Profit/(loss) before tax
|
£0.2m
|
(£24.7m)
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
Statutory loss per
share
|
(1.67p)
|
(336.7p)
|
|
|
|
|
During the period the Company
declared a dividend of £143.0m, payable to the parent company,
South West Water Limited, as part of the planned group
restructuring steps post statutory transfer. This dividend reduced
the intercompany debtor balance owed by South West Water
Limited.
For
further information, please contact:
|
Steve
Buck
|
Group
Chief Financial Officer
|
01392
443 168
|
|
Catherine
Nash
|
Group
Head of Investor Relations
|
01392
443 166
|
|
James
Murgatroyd
Harry
Worthington
|
FGS
Global
|
020
7251 3801
|
1 Non-underlying items are adjusted
for by virtue of their size, nature or incidence to enable a full
understanding of financial performance
2 The Company's statutory revenue
for 2022/23 of £109m included non-underlying revenue reductions of
£6.6m in respect of a customer bill credit under
WaterShare+
BRISTOL WATER
PLC
UNAUDITED PRELIMINARY
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH
2024
INCOME STATEMENT (UNAUDITED)
for the year ended 31 March
2024
|
|
|
|
2024
|
2023
|
|
|
Notes
|
|
£m
|
£m
|
|
|
|
|
|
|
|
Revenue before non underlying
items
|
4
|
|
-
|
115.6
|
|
Non underlying revenue
|
4
|
|
-
|
(6.6)
|
|
Total revenue
|
|
|
-
|
109.0
|
|
|
|
|
|
|
|
Operating costs excluding impairment
losses on trade receivables
|
5
|
|
(0.5)
|
(84.6)
|
|
Impairment losses on trade
receivables
|
5
|
|
-
|
(3.5)
|
|
Operating costs before non
underlying items
|
|
|
(0.5)
|
(88.1)
|
|
|
|
|
|
|
|
Non underlying operating
costs
|
5
|
|
-
|
(1.2)
|
|
Total net operating
costs
|
5
|
|
(0.5)
|
(89.3)
|
|
|
|
|
|
|
|
Operating (loss) / profit
|
|
|
(0.5)
|
19.7
|
|
|
|
|
|
|
|
Interest payable and similar charges
before non underlying items
|
6
|
|
(1.1)
|
(34.0)
|
|
Interest receivable and similar
charges before non underlying items
|
6
|
|
1.8
|
2.7
|
|
Non underlying interest payable and
similar charges
|
6
|
|
-
|
(13.1)
|
|
Total net interest payable and
similar charges
|
6
|
|
0.7
|
(44.4)
|
|
|
|
|
|
|
|
Profit / (loss) before tax
|
|
|
0.2
|
(24.7)
|
|
|
|
|
|
|
|
Taxation on profit / (loss) on
ordinary activities
|
7
|
|
(0.3)
|
4.5
|
|
|
|
|
|
|
|
Loss for the financial year
|
|
|
(0.1)
|
(20.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per ordinary share
|
8
|
|
(1.67)p
|
(336.7)p
|
|
|
|
|
|
|
|
Substantially all of the Company's operations were
discontinued in the prior year.
|
STATEMENT OF COMPREHENSIVE
INCOME (UNAUDITED)
for the year ended 31 March
2024
|
|
|
|
2024
|
2023
|
|
|
|
Notes
|
|
£m
|
£m
|
|
|
|
|
|
|
|
|
Loss for the financial
year
|
|
|
|
(0.1)
|
(20.2)
|
|
|
|
|
|
|
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
Items that will not be
reclassified to profit and loss
|
|
|
|
|
|
|
Actuarial
gain on retirement benefit surplus
|
|
|
|
-
|
0.5
|
|
Remeasurement of defined benefit pension scheme
restriction
|
|
10
|
|
1.2
|
(0.1)
|
|
|
|
|
|
|
|
|
Other comprehensive income
for the year, net of tax
|
|
|
|
1.2
|
0.4
|
|
Total comprehensive profit /
(loss) for the year
|
|
|
|
1.1
|
(19.8)
|
|
|
|
|
|
|
|
STATEMENT OF FINANCIAL
POSITION (UNAUDITED)
at 31 March 2024
|
|
|
|
2024
|
2023
|
|
|
Notes
|
|
£m
|
£m
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
Other
receivables
|
9
|
|
26.6
|
26.6
|
|
Retirement benefit surplus
|
10
|
|
9.5
|
8.2
|
|
|
|
|
36.1
|
34.8
|
|
Current
assets
|
|
|
|
|
|
Trade and
other receivables
|
|
|
0.1
|
144.5
|
|
Current
tax asset
|
|
|
0.5
|
0.7
|
|
Cash and
cash equivalents
|
|
|
0.7
|
0.1
|
|
|
|
|
1.3
|
145.3
|
|
|
|
|
|
|
|
Total assets
|
|
|
37.4
|
180.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
Borrowings and
derivatives
|
11
|
|
(1.6)
|
(1.6)
|
|
8.75% irredeemable cumulative
preference shares
|
11
|
|
(12.5)
|
(12.5)
|
|
|
|
|
(14.1)
|
(14.1)
|
|
Current liabilities
|
|
|
|
|
|
Trade and other
payables
|
|
|
(0.1)
|
(0.9)
|
|
|
|
|
(0.1)
|
(0.9)
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
(14.2)
|
(15.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets
|
|
|
23.2
|
165.1
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Called-up
share capital
|
|
|
6.0
|
6.0
|
|
Share
premium account
|
|
|
4.4
|
4.4
|
|
Other
reserves
|
|
|
5.8
|
5.8
|
|
Retained
earnings
|
|
|
7.0
|
148.9
|
|
Total
Equity
|
|
|
23.2
|
165.1
|
|
|
|
|
|
|
STATEMENT OF CHANGES IN
EQUITY (UNAUDITED)
For the year ended 31 March
2024
|
|
|
|
|
|
|
Called
up share capital
|
Share
premium
account
|
Capital
redemption
reserve
|
Retained
earnings
|
Total
|
|
|
|
|
|
|
|
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
Balance
at 1 April 2022
|
6.0
|
4.4
|
5.8
|
232.9
|
249.1
|
|
|
|
|
|
|
|
|
Loss for
the year
|
-
|
-
|
-
|
(20.2)
|
(20.2)
|
|
|
|
|
|
|
|
|
Other comprehensive loss for
the year:
|
|
|
|
|
|
|
|
Actuarial
loss recognised in respect of
|
|
|
|
|
|
|
|
retirement benefit obligations
|
-
|
-
|
-
|
0.5
|
0.5
|
|
|
Remeasurement of defined benefit pension scheme
|
-
|
-
|
-
|
(0.1)
|
(0.1)
|
|
|
|
|
|
|
|
|
Total comprehensive loss for
the year
|
-
|
-
|
-
|
(19.8)
|
(19.8)
|
|
|
|
|
|
|
|
|
Ordinary
dividends
|
-
|
-
|
-
|
(64.3)
|
(64.3)
|
|
Share
based payments
|
-
|
-
|
-
|
0.1
|
0.1
|
|
|
|
|
|
|
|
|
Balance as at 31 March
2023
|
6.0
|
4.4
|
5.8
|
148.9
|
165.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
as at 1 April 2023
|
6.0
|
4.4
|
5.8
|
148.9
|
165.1
|
|
|
|
|
|
|
|
|
Loss for
the year
|
-
|
-
|
-
|
(0.1)
|
(0.1)
|
|
Other comprehensive income
for the year:
|
|
|
|
|
|
|
|
Actuarial
profit recognised in respect of
retirement benefit obligations
|
-
|
-
|
-
|
-
|
-
|
|
|
Remeasurement of defined benefit pension scheme
|
-
|
-
|
-
|
1.2
|
1.2
|
|
|
|
|
|
|
|
|
|
Total comprehensive profit
for the year
|
-
|
-
|
-
|
1.1
|
1.21
|
|
|
|
|
|
|
|
|
|
Ordinary
dividends
|
-
|
-
|
-
|
(143.0)
|
(143.0)
|
|
|
|
|
|
|
|
|
|
Balance as at 31 March
2024
|
6.0
|
4.4
|
5.8
|
7.0
|
23.2
|
|
|
|
|
|
|
|
|
|
|
|
The Board has not proposed a final
dividend in respect of the financial year 2023/24 (2023:
£nil).
CASH FLOW STATEMENT
(UNAUDITED)
For the year ended 31 March
2024
|
|
|
2024
|
2023
|
|
|
Notes
|
|
£m
|
£m
|
|
Cash flows from operating
activities
|
|
|
|
|
|
Profit /
(loss) before taxation
|
|
|
0.2
|
(24.7)
|
|
Adjustments for:
|
|
|
|
|
|
|
Share
based payments
|
|
|
-
|
0.1
|
|
|
Deferred
income amortisation
|
|
|
-
|
(3.3)
|
|
|
Depreciation
|
|
|
-
|
21.4
|
|
|
Amortisation of intangibles
|
|
|
-
|
2.9
|
|
|
Difference between pension charges and
|
|
|
|
|
|
|
contributions paid
|
|
|
0.5
|
0.6
|
|
|
Loss on
disposal of assets
|
5
|
|
-
|
0.1
|
|
|
Interest
income
|
6
|
|
(1.2)
|
(2.4)
|
|
|
Interest
expense
|
6
|
|
1.1
|
47.1
|
|
|
Pension
interest income
|
6
|
|
(0.6)
|
(0.3)
|
|
|
|
|
|
|
|
|
Increase
in inventory
|
|
|
-
|
(0.5)
|
|
|
Decrease
in trade and other receivables
|
|
|
1.4
|
0.5
|
|
|
(Decrease) / increase in trade and other creditors and
provisions
|
|
|
(1.1)
|
9.5
|
|
Cash
generated from operations
|
|
|
0.3
|
51.0
|
|
|
|
|
|
|
|
Interest
paid
|
|
|
(0.1)
|
(21.4)
|
|
Corporation taxes paid
|
|
|
(0.1)
|
(1.6)
|
|
Contributions received
|
|
|
-
|
2.8
|
|
|
|
|
|
|
|
Net cash generated from operating
activities
|
|
|
0.1
|
30.8
|
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
Purchase
of property, plant and equipment and intangibles
|
|
|
-
|
(40.7)
|
|
Interest
received
|
6
|
|
1.6
|
2.4
|
|
Repayment
of intercompany loan receivable
|
|
|
-
|
61.1
|
|
Disposal
of trade and assets
|
|
|
-
|
(5.1)
|
|
Net cash used in investing
activities
|
|
|
1.6
|
17.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
Proceeds
from loans and borrowings
|
|
|
-
|
81.1
|
|
Repayment
of loans and borrowings
|
|
|
-
|
(75.8)
|
|
Payment
of lease liabilities
|
|
|
-
|
(0.3)
|
|
Preference dividends paid
|
6
|
|
(1.1)
|
(1.1)
|
|
Equity
dividends paid
|
|
|
-
|
(64.3)
|
|
|
|
|
|
|
|
Net cash used in financing
activities
|
|
|
(1.1)
|
(60.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in
cash and cash equivalents
|
|
|
0.6
|
(11.9)
|
|
|
|
|
|
|
|
Cash and
cash equivalents, beginning of year
|
|
|
0.1
|
12.0
|
|
|
|
|
|
|
|
Cash and cash equivalents,
end of year
|
|
|
0.7
|
0.1
|
Substantially all of the Company's operations were
discontinued in the prior year.
NOTES TO THE FINANCIAL
STATEMENTS
|
1
|
General
information
Bristol Water plc is a public
company, limited by shares, with irredeemable preference shares and
debenture stock listed on the London Stock Exchange.
The Company is incorporated and
domiciled in England, United Kingdom. The address of its registered
office is Bridgwater Road, Bristol, BS13 7AT, England.
The financial information for the
year ended 31 March 2024 does not constitute statutory accounts
within the meaning of section 435 of the Companies Act 2006.
The statutory accounts for the year ended 31 March 2024 will be
finalised on the basis of the financial information presented by
the Directors in this preliminary announcement and will be
delivered to the Registrar of Companies in due course.
|
|
|
|
|
2
|
Basis of
preparation
|
|
|
The unaudited financial statements
of the Company are prepared on a historical cost basis in
accordance with Financial Reporting Standard 101, 'Reduced
Disclosure Framework - Disclosure exemptions from EU-adopted IFRS
for qualifying entities' ("FRS 101") and with the provisions of the
Companies Act 2006.
The preparation of financial
statements in conformity with FRS 101 requires the use of certain
critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Company's
accounting policies. The accounting policies adopted have not
changed significantly from those adopted in the Company's 2023
Annual Report and Financial Statements (which are available on the
Company's website www.bristol water.co.uk).
New standards and interpretations not yet
adopted
New standards or interpretations
which were mandatory for the first time in the year beginning 1
April 2023 did not have a material impact on the net assets of the
Company.
New standards or interpretations due
to be adopted from 1 April 2024 are not expected to have a material
impact on the Company's net assets or results.
|
|
3
|
Going
concern
Following the transfer of the
Company's licence, trade, assets and obligations to South West
Water Limited ("SWW") on 1 February 2023, the Company's remaining
obligations will be met by matching intra-group contracted assets
and related receipts. The Company has received confirmation from
Pennon Group plc that it will provide support to the Company should
it be required, to meet its liabilities as they fall due for the
period which covers the period from approval of these financial
statements through to 20 May 2025. As a result, the Directors
have concluded that the Company has adequate resources, or the
reasonable expectation of raising further resources as required, to
continue in operational existence for the foreseeable future. The
Company therefore continues to adopt the going concern basis in
preparing its financial statements.
Further information on the Company's borrowings is given in note
11.
.
|
|
|
|
|
4
|
REVENUE
|
|
|
|
|
|
2024
£m
|
2023
£m
|
|
|
|
Appointed
income
|
|
|
|
|
|
|
|
Household
- measured
|
|
-
|
50.0
|
|
|
|
|
Household
- unmeasured
|
|
-
|
36.1
|
|
|
|
|
Non-household - measured
|
|
-
|
22.2
|
|
|
|
|
Non-household - unmeasured
|
|
-
|
0.3
|
|
|
|
|
Contributions from developers
|
|
-
|
3.3
|
|
|
|
|
Third
party services
|
|
-
|
1.8
|
|
|
|
|
Rental
income
|
|
-
|
1.0
|
|
|
|
|
|
|
-
|
114.7
|
|
|
|
Non-appointed
income
|
|
|
|
|
|
|
|
Recreations
|
|
-
|
0.5
|
|
|
|
|
Rental
income
|
|
-
|
0.2
|
|
|
|
|
Other
|
|
-
|
0.2
|
|
|
|
|
|
|
-
|
0.9
|
|
|
|
|
|
|
|
|
|
|
|
Underlying
income
|
|
-
|
115.6
|
|
|
|
|
|
|
|
|
|
|
Non-underlying
income
|
|
|
|
|
|
|
|
Watershare +
|
|
-
|
(6.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
income
|
|
-
|
109.0
|
|
|
|
|
|
|
|
|
|
|
|
Appointed income was income earned
under the Company's licence to supply water for the period until 1
February 2023 when the licence was transferred to SWW.
Non-appointed income related to activities that do not require a
water supply licence. All revenue in the prior year relates to the
trade and assets transferred to SWW.
The total revenue in the year ended
31 March 2023 included £107.9m for revenue from contracts with
customers under IFRS 15 and £1.1m of leasing income under IFRS 16
"Leases".
In the year ending 31 March 2023,
the Company offered Pennon Group plc's, its parent company,
WaterShare+ scheme to its customers whereby customers could choose
to accept a credit on their bill or take shares in Pennon Group
plc. The value of the rebate equated to £13 per customer and
the total value of £6.6 million was recognised in full as a
non-underlying reduction to revenue. This item was non-underlying
in nature given its individual size and its non-recurring
nature.
|
|
|
5
|
OPERATING COSTS
|
|
|
|
(a)
Operating costs include:
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
|
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
Wages and salaries
|
|
-
|
19.0
|
|
|
|
|
Social security costs
|
-
|
2.1
|
|
|
|
|
Defined contribution scheme
costs
|
-
|
2.2
|
|
|
|
|
Defined benefit scheme
costs
|
-
|
0.4
|
|
|
|
|
Share-based payments
|
-
|
0.1
|
|
|
|
|
Total payroll cost
|
-
|
23.8
|
|
|
|
|
Less capitalised as tangible and
intangible assets
|
-
|
(9.8)
|
|
|
|
|
|
|
|
|
|
|
|
Net staff costs
|
-
|
14.0
|
|
|
|
|
|
|
|
|
|
|
|
Inventory recognised as an
expense
|
-
|
4.5
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of tangible assets
including impairment
|
|
|
|
|
|
|
|
On owned assets
|
-
|
21.0
|
|
|
|
|
|
On leased assets
|
-
|
0.4
|
|
|
|
|
Amortisation of intangible
assets
|
|
|
|
|
|
|
|
On owned assets
|
-
|
2.9
|
|
|
|
|
|
|
|
|
|
|
|
Other operating charges
|
|
|
|
|
|
|
|
Auditor's remuneration
|
-
|
0.3
|
|
|
|
|
|
Loss on disposal of tangible
assets
|
-
|
0.1
|
|
|
|
|
|
Other charges less
recoveries
|
0.5
|
41.4
|
|
|
|
|
Operating costs excluding impairment losses on trade
receivables
|
0.5
|
84.6
|
|
|
|
|
Impairment of trade
receivables
|
-
|
3.5
|
|
|
|
|
Total operating costs before non underlying
items
|
0.5
|
88.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal costs
|
-
|
1.0
|
|
|
|
|
Integration costs
|
-
|
0.2
|
|
|
|
|
Total non underlying items in the income
statement
|
-
|
1.2
|
|
|
|
|
|
|
|
|
|
|
|
Total net operating costs
|
0.5
|
89.3
|
|
|
|
|
|
|
|
|
|
|
In the prior year £40m bonds due to
be repaid in March 2041 were redeemed as part of the statutory
transfer of the Company's business to South West Water. Associated
legal costs of c£1m were incurred in relation to the bond
redemption. The redemption of the bonds was non-recurring and of a
material value, hence the cost was treated as
non-underlying.
In the prior year the Company
incurred expenses of £0.2m relating to the integration and
statutory transfer of the Company's trade, assets and obligations
to South West Water. These costs were classified as non-underlying
due to their non-recurring nature.
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
OPERATING COSTS (continued)
|
|
|
|
|
|
(b) Employee details
|
|
|
|
From the 1 February 2023 the Company
has no employees. The monthly average number of employees by
activity, including Directors on a service contract, (on a
full-time equivalents basis) during the year to 31 January 2023 is
shown as follows for 2023.
|
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
|
|
No.
|
No.
|
|
|
|
|
|
|
|
|
|
|
Water treatment and
distribution
|
|
-
|
215
|
|
|
|
Support services
|
|
-
|
141
|
|
|
|
Administration
|
|
-
|
181
|
|
|
|
Non-appointed activities
|
|
-
|
14
|
|
|
|
|
|
-
|
551
|
|
|
(c)
Directors' emoluments
|
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
|
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
Aggregate emoluments of Directors,
being remuneration, bonus, pension, LTIP and benefits in
kind
|
|
-
|
0.7
|
|
|
|
|
|
-
|
0.7
|
|
|
|
The highest paid Director during
the year ended 31 March 2023 was Mr Karam.
|
|
|
|
|
|
|
(d) Independent auditors' remuneration
|
|
|
|
|
|
|
During
the year the Company obtained the following services from the
Company's auditors and its associates:
|
|
|
|
|
|
2024
|
2023
|
|
|
|
|
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
Fees payable for the audit of the
Company's annual statutory financial statement
|
|
-
|
0.3
|
|
|
|
|
|
-
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
NET INTEREST PAYABLE AND
SIMILAR CHARGES
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
|
£m
|
£m
|
|
|
Interest
payable and similar charges relate to:
|
|
|
|
|
|
|
|
|
|
|
|
Bank
borrowings
|
-
|
3.7
|
|
|
Term
loans and debentures:
|
|
|
|
|
|
Interest
charges
|
-
|
9.4
|
|
|
|
Indexation
|
-
|
20.0
|
|
|
Leases
|
-
|
0.1
|
|
|
Capitalisation of borrowing cost
|
-
|
(0.9)
|
|
|
Dividends
on 8.75% irredeemable cumulative preference shares
|
1.1
|
1.1
|
|
|
Loan from
Pennon Group plc
|
-
|
0.6
|
|
|
|
1.1
|
34.0
|
|
|
Less
interest receivable and similar income:
|
|
|
|
|
|
|
|
|
|
Interest
income in respect of retirement benefit scheme
|
(0.6)
|
(0.3)
|
|
|
Interest
income on intercompany loans
|
(1.2)
|
(2.4)
|
|
|
|
(1.8)
|
(2.7)
|
|
|
|
|
|
|
|
Total
underlying net interest (receivable)/payable and similar
charges
|
(0.7)
|
31.3
|
|
|
|
|
|
|
|
Bond
redemption costs
|
-
|
13.1
|
|
|
|
|
|
|
|
Total net
interest (receivable)/payable and similar charges
|
(0.7)
|
44.4
|
|
|
|
|
|
|
|
Dividends on the 8.75% irredeemable
cumulative preference shares are payable at a fixed rate of 4.375%
on 1 April and 1 October each year. Payment by the Company to the
share registrars is made two business days earlier. The payments
are classified as interest in accordance with IFRS 9.
In the prior year bonds with a
carrying value of £59.2m were redeemed for £72.3 million. The
difference of £13.1m arising on early settlement was debited to
finance costs in the year ended 31 March 2023. The redemption of
the bonds is non-recurring and of a material value, hence the debit
was treated as non-underlying.
The rate used to determine the
amount of borrowing costs eligible for capitalisation in the prior
year was 7.8% which was the weighted average interest rate of
applicable borrowings.
|
|
|
|
|
|
|
7
|
TAXATION
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
|
£m
|
£m
|
|
|
Tax expense included in
Income Statement
|
|
|
|
|
|
|
|
|
|
|
|
Current
tax:
|
|
|
|
|
|
|
Corporation tax on profits for the year
|
|
0.3
|
0.4
|
|
|
|
Adjustment to prior years
|
|
-
|
(0.1)
|
|
|
Total
current tax
|
|
0.3
|
0.3
|
|
|
|
|
|
|
|
|
Deferred
tax:
|
|
|
|
|
|
|
Origination and reversal of timing differences
|
|
-
|
(4.9)
|
|
|
|
Adjustment to prior years
|
|
-
|
0.1
|
|
|
Total
deferred tax
|
|
-
|
(4.8)
|
|
|
|
|
|
|
|
|
Tax
expense/(income) on profit
|
|
0.3
|
(4.5)
|
|
|
|
|
|
|
|
7
|
TAXATION
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of the tax on
profit on ordinary activities
|
|
|
|
|
|
|
The tax
charge for the year differs from the theoretical amount which would
arise using the standard rate of corporation tax in the UK of 25%
(2022/23:19%), as follows:
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
|
£m
|
£m
|
|
|
Profit before tax
|
|
|
0.2
|
(24.7)
|
|
|
|
|
|
|
|
|
|
At statutory income tax rate of
25% (2023: 19%)
|
|
|
0.1
|
(4.7)
|
|
|
|
|
|
|
|
|
|
Adjustment in respect of prior years' current tax
|
|
|
-
|
0.1
|
|
|
Adjustment in respect of prior years' deferred tax
|
|
|
-
|
(0.1)
|
|
|
|
|
|
|
|
|
|
Non-deductible expenses for tax purposes:
|
|
|
|
|
|
|
|
8.75%
irredeemable cumulative preference share
|
|
|
0.2
|
0.2
|
|
|
|
Non-qualifying asset depreciation
|
|
|
-
|
0.1
|
|
|
|
Other
|
|
|
-
|
0.1
|
|
|
Capital
expenditure tax depreciation super deduction allowances
|
|
|
-
|
(0.2)
|
|
|
Total taxation expense
included in income statement
|
|
|
0.3
|
(4.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From 1 April 2021 to 31 March 2023,
a "super-deduction" on qualifying plant and machinery equivalent to
130% of spend on expenditure relating to contracts entered into
after 3 March 2021 was available in respect of qualifying
expenditure. Prior to the statutory transfer of trade and
assets to SWW, the Company incurred significant capital expenditure
each year as it maintained and enhanced its assets for the benefit
of its customers, communities and the environment. The first
year allowance on certain other types of assets, including
long-life was boosted to 50% for the same period, again for
contracts entered into after 31 March 2021. These enhanced
allowances increased capital allowance claims for the year ended 31
March 2023. There was also a consequently higher deferred tax
liability and charge due to the additional capital allowance
deductions prior to the transfer to SWW.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
|
LOSS PER ORDINARY SHARE
|
|
|
|
|
2024
|
2023
|
|
|
|
|
m
|
m
|
|
|
Basic loss per ordinary share have
been calculated as follows:
|
|
|
|
|
|
|
Loss attributable to ordinary
shares
|
|
£0.1
|
£20.2
|
|
|
|
Weighted average number of ordinary
shares
|
|
6.0
|
6.0
|
|
|
|
|
|
1.67p
|
336.7p
|
|
|
|
|
|
|
|
|
|
As the
Company has no obligation to issue further shares, disclosure of
earnings per share on a fully diluted basis is not
relevant.
|
|
9
|
OTHER RECEIVABLES
|
|
|
|
|
|
Other
receivables comprise loan notes issued to the Company on 1 February
2023 by SWW.
|
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
|
|
m
|
m
|
|
|
£25,000,000 fixed rate loan
note
|
6%
|
|
25.0
|
25.0
|
|
|
£1,405,218 fixed rate loan
note
|
4%
|
|
1.4
|
1.4
|
|
|
£72,900 fixed rate loan
note
|
3.5%
|
|
0.1
|
0.1
|
|
|
£54,875 fixed rate loan
note
|
4%
|
|
0.1
|
0.1
|
|
|
£36,740 fixed rate loan
note
|
4.25%
|
|
-
|
-
|
|
|
|
|
|
26.6
|
26.6
|
|
|
|
|
|
|
|
|
|
The amounts included above relate to
loan notes issued on 1 February 2023 by SWW to the Company.
The loan notes reflect the external borrowings held by the Company
and as such any maturity dates are linked to the maturity of these
external borrowings. All loan notes are unsecured. No
expected credit loss provision has been recognised in respect of
amounts owned by group undertakings.
|
|
|
|
|
|
|
|
|
10
|
RETIREMENT BENEFITS
|
|
|
Pension arrangements for former
employees have historically been provided through the Company's
membership of the Water Companies' Pension Scheme (WCPS), which
provides defined benefits based on final pensionable pay. The
Company's membership of WCPS is through a separate section of the
scheme. On 7 June 2018, the Trustees of
the Bristol Water Section of the WCPS purchased a bulk annuity
policy to insure the benefits for members in the Section. Following
this, the method for valuing the liabilities of the pension scheme
has remained the same. The pension
liability, following the purchase of the bulk annuity policy,
matches the value of the insurance asset.
The gross pension surplus of £12.7m
at 31 March 2024 (31 March 2023 £12.6m) relates to the market value
of assets still held by the scheme other than the annuity
policy/insurance asset.
Looking ahead, we expect the insurer
will take over responsibility for the payment and administration of
member benefits. Once this has happened members will no longer be
members of the Section, instead they will have individual policies
with the insurer. At this point the Section will be wound
up.
In June 2023, the High Court handed
down a decision (Virgin Media Limited v NTL Pension Trustees II
Limited and others) which potentially has implications for the
validity of amendments made by schemes, including the Company
defined benefit scheme, which were contracted-out on a
salary-related basis between 6 April 1997 and the abolition of
contracting-out in 2016. This decision has been appealed and is due
to be reconsidered by the Court of Appeal in June 2024. The impact
will therefore be uncertain for some time to come. Given this
uncertainty, the updated valuation as at 31 March 2024 does not
reflect the High Court ruling as it is currently unclear as to
whether any additional liabilities might arise, and if they were to
arise, how they would be reliably measured. The case is subject to
appeal in 2024 and following the outcome of the appeal and any DWP
response, management will conclude whether any subsequent actions
or amendments to IAS 19 liabilities are required.
|
|
|
Risks of the scheme
|
|
|
Following the purchase of the bulk
annuity policy, the balance sheet asset is now largely only exposed
to changes in the value of the invested assets. This is because the
value of the insurance policy is set to equal the value of the
corresponding obligations meaning that any changes in financial
conditions or other assumptions will affect the value of the
insurance policy and the corresponding obligations by broadly the
same amount.
|
|
|
|
|
|
The value of the pension scheme
surplus has been restricted by refund tax of 25% (2023: 35%) under
UK tax legislation. An increase in the income tax rate will reduce
the net pension scheme surplus.
|
|
|
|
|
|
Basis of valuation
The formal actuarial valuation of
the Company's section of the WCPS as at 31 March 2017 was updated
to 31 March 2024, by and independent actuary Lane, Clarke &
Peacock, "LCP", using the following major assumptions in accordance
with IAS 19 'Employee Benefits':
|
|
|
|
|
|
|
|
|
2024
|
2023
|
|
|
Assumptions:
RPI Inflation
CPI Inflation
Discount rate
|
3.2%
2.6%
4.8%
|
3.3%
2.7%
4.7%
|
|
|
|
|
|
|
|
Assumptions regarding future
mortality are set based on actuarial advice in accordance with
published statistics and experience in the UK. These assumptions
translate into the following average life expectancies in
years:
|
|
|
|
2024
|
2023
|
|
|
Life expectancy at age 60 at the
balance sheet date
|
|
|
|
|
-
|
Men
|
27.2
|
27.3
|
|
|
-
|
Women
|
29.6
|
29.5
|
|
|
Life expectancy at age 60, 25
years from balance sheet date
|
|
|
|
|
-
|
Men
|
30.0
|
30.2
|
|
|
-
|
Women
|
31.9
|
31.8
|
|
|
|
|
10
|
RETIREMENT BENEFIT SURPLUS (continued)
|
|
|
Reconciliation of scheme assets and
liabilities:
|
|
|
|
Assets
|
Liabilities
|
Total
|
|
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
Pension scheme surplus at 1 April
2022
|
161.2
|
(148.8)
|
12.4
|
|
|
|
|
|
|
|
|
Section expenses
|
(0.6)
|
-
|
(0.6)
|
|
|
Interest income (note
6)
|
4.3
|
(4.0)
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurements:
|
|
|
|
|
|
|
Return on plan assets, excluding
amounts
included in interest
income
|
(32.7)
|
-
|
(32.7)
|
|
|
|
Changes in financial
assumptions
|
-
|
40.6
|
40.6
|
|
|
|
Changes in demographic
assumption
Experience adjustments on
obligation
|
-
|
1.8
(9.2)
|
1.8
(9.2)
|
|
|
|
(32.7)
|
33.2
|
0.5
|
|
|
|
|
|
|
|
|
Benefits paid
|
(7.6)
|
7.6
|
-
|
|
|
|
|
|
|
|
|
Pension scheme surplus at 31 March 2023
|
124.6
|
(112.0)
|
12.6
|
|
|
|
|
|
|
|
|
|
Assets
|
Liabilities
|
Total
|
|
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
Pension scheme surplus at 1 April
2023
|
124.6
|
(112.0)
|
12.6
|
|
|
|
|
|
|
|
|
Section expenses
|
(0.5)
|
-
|
(0.5)
|
|
|
Interest income (note
6)
|
5.7
|
(5.1)
|
0.6
|
|
|
|
|
|
|
|
|
Remeasurements:
|
|
|
|
|
|
|
Return on plan assets, excluding
amounts included in interest income
|
(1.7)
|
-
|
(1.7)
|
|
|
|
Changes in financial
assumptions
|
-
|
2.4
|
2.4
|
|
|
|
Changes in demographic
assumption
|
-
|
0.9
|
0.9
|
|
|
|
Experience adjustments on
obligation
|
-
|
(1.6)
|
(1.6)
|
|
|
|
(1.7)
|
1.7
|
-
|
|
|
|
|
|
|
|
|
Benefits paid
|
(7.7)
|
7.7
|
-
|
|
|
|
|
|
|
|
|
Pension scheme surplus at 31
March 2024
|
120.4
|
(107.7)
|
12.7
|
|
|
|
2024
|
2023
|
|
|
Total amount recognised on
the statement of financial position:
|
£m
|
£m
|
|
|
Fair value of plan
assets
|
120.4
|
124.6
|
|
|
Pension scheme
obligation
|
(107.7)
|
(112.0)
|
|
|
Pension scheme surplus
|
12.7
|
12.6
|
|
|
Less: restriction of
surplus
|
(3.2)
|
(4.4)
|
|
|
Net pension scheme
surplus
|
9.5
|
8.2
|
|
|
In accordance with IAS19 'Employee
Benefits' the value of the net pension scheme surplus that can be
recognised in the statement of financial position is restricted to
the present value of economic benefits available in the form of
refunds from the scheme or reductions in future contributions. As
defined under IFRIC 14, the Company believes that it has an
unconditional right to a refund of surplus and that the gross
pension surplus can be recognised.
|
|
|
|
|
10
|
RETIREMENT BENEFIT SURPLUS
(continued)
|
|
|
This benefit is only available as a
refund as no additional defined pension benefits are being earned.
Under UK tax legislation a refund tax deduction of 25% is applied
to a refund from a UK pension scheme, before it is passed to the
employer. This tax deduction has been shown above as a restriction
to the value of the net pension scheme asset that can be recognised
for this scheme. Legislation enacted in the year reduced this
tax rate from 35% to 25%. This change resulted in a one-off
gain of £1.2m which has been recognised in OCI.
|
|
|
|
|
|
Sensitivity
The sensitivity of the pension
scheme obligation at 31 March 2024
|
|
|
|
|
Change
in assumption
|
Increase
in assumption
|
|
|
|
|
|
£m
|
|
|
Discount rate
|
|
0.1%
pa
|
(1.2)
|
|
|
Inflation assumption
(CPI)
|
|
0.1%
pa
|
1.1
|
|
|
Life expectancy
|
|
1
year
|
5.1
|
|
|
|
|
|
The above sensitivity analyses are
based on a change in an assumption while holding all other
assumptions constant. In practice, this is unlikely to occur and
changes in some of the assumptions may be correlated.
|
|
|
|
|
|
The methods and types of assumptions
used in preparing the sensitivity analysis did not change compared
to the previous year.
Following the purchase of the bulk
annuity policy, any changes in the value of the obligations would
largely be matched by a corresponding change in the value of the
Section's assets.
|
|
|
Total cost recognised as (income)/ expense:
|
|
|
|
|
|
2024
|
2023
|
|
|
|
£m
|
£m
|
|
|
|
|
|
|
|
Interest income (note 6)
|
(0.6)
|
(0.3)
|
|
|
Section expenses
|
0.5
|
0.6
|
|
|
|
(0.1)
|
0.3
|
|
|
The market value of the plan
assets was:
|
|
|
|
|
|
|
2024
|
2023
|
|
|
|
Quoted
|
Unquoted
|
2024
|
%
|
Quoted
|
Unquoted
|
2023
|
%
|
|
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidity funds
|
-
|
13.2
|
13.2
|
11
|
-
|
13.7
|
13.7
|
11
|
|
|
Insurance policy
|
-
|
107.2
|
107.2
|
89
|
-
|
110.9
|
110.9
|
89
|
|
|
Cash
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
-
|
120.4
|
120.4
|
100
|
-
|
124.6
|
124.6
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
return on the plan assets was:
|
2024
|
2023
|
|
|
|
£m
|
£m
|
|
|
Interest income
|
5.7
|
4.3
|
|
|
Remeasurements
|
(1.7)
|
(32.7)
|
|
|
Total return on plan
assets
|
4.0
|
(28.4)
|
|
|
|
|
|
|
|
The
current weighted average duration of the expected benefit payments
from the Section is around 12 years.
|
|
|
|
|
|
|
|
|
|
|
|
|
11
|
BORROWINGS
|
|
|
|
|
2024
|
2023
|
|
|
|
|
£m
|
£m
|
|
|
|
|
|
|
|
|
Irredeemable
|
|
|
|
|
|
Debentures
|
|
1.6
|
1.6
|
|
|
8.75% irredeemable cumulative
preference shares
|
|
12.5
|
12.5
|
|
|
|
|
14.1
|
14.1
|
|
|
|
|
|
|
|
|
Total
|
|
14.1
|
14.1
|
|
|
|
|
|
|
|
|
None of
the bank and other term loans included within creditors are payable
in instalments.
Bonds
with a carrying value of £59.2m were redeemed on 17 November 2022
for £72.3 million. The difference of £13.1m arising on early
settlement was debited to finance costs in the prior
year.
|
|
|
|
|
|
|
Interest
rate
|
Maturity
|
Total 2024
|
Total
2023
|
|
|
|
|
|
£m
|
£m
|
|
|
Non current loans and
borrowings
|
|
|
|
|
|
|
|
£1,405,218 Consolidated debentures
|
4.00%
|
irredeemable
|
1.4
|
1.4
|
|
|
|
£36,740
perpetual debentures
|
4.25%
|
irredeemable
|
-
|
-
|
|
|
|
£54,875
perpetual debentures
|
4.00%
|
irredeemable
|
0.1
|
0.1
|
|
|
|
£72,900
perpetual debentures
|
3.50%
|
irredeemable
|
0.1
|
0.1
|
|
|
|
£12,500,000 cumulative preference shares
|
8.75%
|
irredeemable
|
12.5
|
12.5
|
|
|
Total
non- current loans and borrowings
|
|
|
14.1
|
14.1
|
|
|
|
|
|
|
|
|
12
|
COMMITMENTS
|
|
|
|
|
|
|
|
The
Company had no commitments at 31 March 2024 (2023:
£nil).
|
|
13
|
ULTIMATE PARENT COMPANY AND
CONTROLLING PARTY
|
|
|
|
As at 31 March 2023 and 31 March
2024 the immediate parent company for this entity was South West
Water Limited.
As at 31 March 2023 and 31 March
2024 the Directors considered the ultimate parent and controlling
party to be Pennon Group plc.
The smallest and largest group in
which the Company is consolidated is Pennon Group plc which is
registered in England and copies of its consolidated annual report
and accounts are available from Peninsula House, Rydon Lane,
Exeter, Devon, England, EX2 7HR.
|
|
|
|
|
|
|
|
|
|
|
|
|
14.
|
RELATED PARTY
TRANSACTIONS
|
|
|
Related parties include members and
joint ventures of the Pennon Group plc group of companies and key
management personnel.
The principal related parties
are:
|
|
|
|
|
|
Pennon Group plc ("PG"), registered in England and Wales, whose year end is 31 March,
and is the Company's ultimate UK holding company.
Southwest Water Limited, the
Company's immediate parent, registered in
England and Wales, whose year end is 31 March.
Bristol Water Holdings UK Limited
("BWHUK"), registered in England
and Wales, whose year end is 31 March.
Bristol Water Core Holdings Limited, registered in England and Wales, whose year end is 31
March.
Bristol Wessex Billing Services Limited
("BWBSL"), registered in England
and Wales, whose year end is 31 March. The joint venture
interest is held by Bristol Water Holdings Limited, an intermediate
holding company within the BWHUK group of companies, which owns 100
class 'B' shares in the company, representing a holding of 50% of
the voting and equity rights of the company. BWBSL is a joint
venture undertaking between Bristol Water Holdings Limited and
Wessex Water Services Limited, and provides meter reading, billing,
debt recovery and customer contact management services to this
Company and Wessex Water Services Limited, under a cost sharing
arrangement.
Water 2 Business Limited ("W2B"), registered in England and Wales, whose year end is 30
June. The interest is held by BWH Limited, an intermediate holding
company, which owns 30 class 'B' shares in the company representing
a holding of 30% of equity rights and 40% of voting rights of the
company. W2B has a retail water and sewerage supply licence and
provides retail water services to non-household
customers.
Pennon Water Services Limited ("PWS"),
registered in England and Wales, whose year end
is 31 March. The interest is held by PG, the ultimate parent
company, which owns 80% of PWS. On 3 June
2021, following the acquisition by Pennon Group plc, PWS became a
related party of the Company. PWS has a retail water and sewerage supply licence and provides
retail water services to non-household customers.
|
|
|
Trading transactions
During the prior year the Company
entered into trading transactions with related parties. In
the year ended 31 March 2024 there was no trade with these related
parties:
|
|
|
|
Sales of goods and
services
|
|
Purchases of goods and
services
|
|
|
|
2024
|
2023
|
|
2024
|
2023
|
|
|
|
£m
|
£m
|
|
£m
|
£m
|
|
|
Joint ventures and associates of the Pennon Group plc
group
|
|
|
|
|
|
|
|
BWBSL
|
|
|
|
|
|
|
|
- management
charges
|
-
|
-
|
|
-
|
2.5
|
|
|
- capital
expenditure
|
-
|
-
|
|
-
|
0.3
|
|
|
- other recharges
|
-
|
-
|
|
-
|
0.1
|
|
|
W2B
|
|
|
|
|
|
|
|
- non-household supply of
water
|
-
|
16.2
|
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
PWS
|
|
|
|
|
|
|
|
- non-household supply of
water
|
-
|
0.9
|
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
|
-
|
17.1
|
|
-
|
2.9
|
|
|
|
|
|
|
|
|
|
|
The prior year amounts above relate
to the period to 31 January 2023. The trade and assets of the
Company were transferred to SWW on 1 February 2023.
Consequently, year end balances at 31 March 2024 were £nil
(2023: £nil)
|
|
15.
|
CIRCULATION
This unaudited announcement is
available on the Bristol Water website. Paper copies are also
available from the Company's parent company's registered office at
Peninsula House, Rydon Lane, Exeter EX2 7HR.
|