Interim Results
09 Dezember 2004 - 8:01AM
UK Regulatory
RNS Number:1926G
Bristol Water PLC
09 December 2004
BRISTOL WATER plc
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2004
Bristol Water plc is a subsidiary of Bristol Water Group plc (BWG) which is also
reporting its results today.
Bristol Water plc supplies water to over one million people and businesses in an
area of almost 2,400 square kilometres, centred on Bristol.
HIGHLIGHTS
Six months ended 30 September 2004 2003
(unaudited) (unaudited)
#m #m % change
Turnover 35.3 36.0 -2%
Operating profit 9.4 10.4 -10%
Profit before tax 6.2 7.4 -17%
Profit after tax 5.0 6.3 -21%
Earnings per ordinary share 73.9p 96.2p -23%
* PBT reduction of 17% reflecting negative K factor of 1.9%
* Net capital investment of #8.1m in period
* Net debt of #142.8m - approx 64% of average Regulatory Capital Value for
2004/05
* PR04 final determination - K factor of 13.8% for 2005/06, average K's
for 2005-10 of 3.2%
For further information:
Alan Parsons, Chairman Oliver Winters
Andy Nield, Finance Director Simon Courtenay
Bristol Water Group plc City Profile
Tel: 020 7448 3244
Tel: 020 7448 3244 (9 December) Jeremy Williams, Corporate Affairs
Tel: 0117 953 6407 (thereafter) Bristol Water plc
Tel: 0117 953 6470 / 07831 453924
or contact:
Bristol Water Corporate Affairs on 0117 953 6470 during office hours or 07831
453924 or 07831 518964 at any time
CHAIRMAN'S STATEMENT
Introduction
On 2nd December, Ofwat issued its final determination of prices for the five
years 2005/06 to 2009/10. We will be allowed to increase prices in real terms by
an average of 3.2% per annum with an initial K factor of 13.8% for 2005/06. This
is less than we had sought as Ofwat have taken a more challenging approach to
future efficiency targets, excluded some proposed capital schemes and have dealt
with a number of issues by use of their Notified Item process which could
trigger interim price determinations within the period. The price limits assume
a capital programme of #117m (2002/03 prices) over the five year period.
We are studying the documentation provided by Ofwat and the service obligations
that will be required of us. Our initial conclusions are that the package of
price caps and obligations is challenging. We are continuing to review the
position in detail and have an opportunity to ask the Competition Commission to
review Ofwat's conclusions if appropriate. Following the conclusion of our
review we will make a further announcement in due course.
Capital Structure and Dividends
In February 2004 the company made a #47m interest bearing loan to the ultimate
parent company Bristol Water Group plc (BWG). Together with other cash balances
BWG used this to finance a #51m return of capital to shareholders. To finance
the loan the company borrowed long term funds and increased the level of debt
relative to Regulatory Capital Value.
The objective of these transactions was to increase the capital efficiency of
both the company and BWG.
As part of the arrangements the company intends to increase the level of
ordinary dividends it pays to its immediate parent company by an amount
equivalent to the interest receivable on the intercompany loan net of tax
relief.
Accordingly the interim ordinary dividend for 2004/05 compared to 2003/04 is:
2003/04 2004/05
Interim Final Total Interim
#m #m #m #m
Base dividend level 1.8 4.1 5.9 1.9
Additional dividend
equivalent to interest receivable on
intercompany loan net of tax relief - 0.3 0.3 1.0
Total 1.8 4.4 6.2 2.9
The overall interim ordinary dividend of 47.15 pence per share represents a 5%
increase in the 'base' dividend plus the additional dividend equivalent to
interest receivable on the intercompany loan net of tax.
The new financial structure has no impact on prices charged to customers for
2004/05. For 2005-10 there will be a benefit to customers as Ofwat have set
price limits taking into account the tax relief obtained on the additional debt
raised by the company.
Trading performance
As previously signalled, the allowed price increase under the RPI+K formula was
just 0.6% (RPI of 2.5% less a real price reduction of 1.9%). This is
significantly lower than inflationary increases on our operating cost base and
therefore profits were reduced. Income from our main water supply charges fell
by #0.7m to #32.9m, this represents the net effect of the price increase (#0.2m)
and new connections (#0.3m) offset by lower consumption levels by metered
customers during the poor summer weather compared to the previous year and the
net effect of meter optants.
Consequently the company has recorded an operating profit of #9.4m compared to
#10.4m in 2003.
In these accounts we have dealt with pensions on a SSAP24 basis. The last formal
actuarial valuation of the final salary scheme was as at 1 April 2002, the next
valuation is due at 1 April 2005. The accounts reflect an updated interim
valuation as at 1 April 2003, prepared for SSAP24 purposes only and used for the
2003/04 statutory accounts. This reflects the significant change in the equity
markets since the last formal valuation. The company has not yet fully adopted
FRS17, however under FRS17 at 30 September 2004 the net deficit, after tax, of
the scheme would have been approximately #9.8m. We will review in due course the
level of contributions to the scheme in the light of actuarial advice and
movements in the equity and gilt markets.
Profit before tax reduced by #1.2m to #6.2m reflecting the lower operating
profit and increased interest charges.
The tax charge for the six months is #0.1m higher than the equivalent charge for
2003. This reflects a number of factors; the reduction in profit before tax
together with disclaimers of capital allowances in respect of prior years in
both 2003 and the current year, offset by the net effect of changes in the
discount rates used to calculate deferred tax liabilities. The total tax charge
of #1.2m represents an effective tax rate of 19% (2003 - 15%). This is in line
with the current estimated full year effective rate, however the full year rate
remains dependent upon any further changes in discount rates affecting the
deferred tax liability.
Earnings per share on a fully diluted basis for the six months were 73.9p (2003
- 96.2p).
The result for the full year will reflect two significant additional charges; an
increase in electricity tariffs of more than 40% from October and the first
depreciation charges related to the Barrow treatment plant upgrade.
Capital investment, including infrastructure renewals, net of grants and
contributions, in the period amounted to #8.1m. The major upgrade of our Barrow
treatment plant is now complete. We anticipate net capital expenditure for the
full year of approximately #19m.
Net debt increased by #2.5m in the period to #142.8m at 30 September 2004,
representing approximately 64% of the average Regulatory Capital Value (RCV) for
2004/05.
PR04
The key issue for the future is Ofwat's PR04 final determination of price limits
for the five years, 2005/06 to 2009/10. The price limits under the RPI+K formula
are higher than in Ofwat's draft determination but still lower than we proposed.
The K factors, the overall adjustment to tariffs before inflationary effects are
taken into account, are:
Company
Final business plan
determination proposal
2005/06 13.8% 20%
2006/07 2.8% 6%
2007/08 1.5% 6%
2008/09 0.7% 0%
2009/10 -2.3% 0%
The main reasons for the difference are:
*A smaller capital expenditure programme of #117m compared to the #156m we
proposed (2002/03 price base). This reflects the deletion of a number of
schemes, mainly related to improvements to the security of supply for
customers, together with more challenging efficiency assumptions.
*An operating cost efficiency target of 2.5% compared to the 0.8% p.a. we
proposed
*The final determination deals with a number of uncertainties through
Ofwat's Notified Item process which could trigger interim price
determinations within the period. In our business plan we had built a number
of these uncertainties into the proposed K factors.
The average annual household water bill for our customers in the current year is
#108, some 9% lower than the industry average of #117. Under the new price
limits by 2009/10 the average household water bill for our customers will
increase to #122 (2004/05 prices) remaining well below the expected industry
average of #140.
The new price limits and obligations represent a challenging package which we
are now reviewing in detail. Following the conclusion of our review we will make
a further announcement in due course.
Alan Parsons
Chairman
Bristol Water plc
9 December 2004
PROFIT AND LOSS ACCOUNT
Six months to Six months to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited)
Note #m #m #m
Turnover 2 35.3 36.0 70.6
Operating costs 3 (25.9) (25.6) (51.1)
-------- ------- --------
Operating profit 9.4 10.4 19.5
Profit on disposal of tangible
fixed assets - - 0.2
Net interest payable 4 (3.2) (3.0) (6.2)
-------- ------- --------
Profit on ordinary activities
before taxation 6.2 7.4 13.5
Taxation on profit on ordinary
activities 5 (1.2) (1.1) (2.4)
-------- ------- --------
Profit on ordinary activities
after taxation 5.0 6.3 11.1
-------- ------- --------
Dividends - 6
On irredeemable preference
shares (0.5) (0.5) (1.1)
(non-equity)
On ordinary shares (equity) (2.9) (1.8) (6.2)
-------- ------- --------
Total dividends (3.4) (2.3) (7.3)
-------- ------- --------
Profit retained 1.6 4.0 3.8
-------- ------- --------
Earnings per share 7 73.9p 96.2p 166.0p
-------- ------- --------
Dividend per ordinary share 6 47.15p 29.10p 103.37p
-------- ------- --------
All activities above relate to the continuing operations of the company.
The profit on ordinary activities after taxation includes all recognised gains
and losses.
BALANCE SHEET
At At At
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited)
Note #m #m #m
Tangible fixed assets 8 194.5 188.1 193.8
Investment - Loan to ultimate holding
company 47.0 - 47.0
Current assets
Stocks 0.6 0.5 0.7
Debtors 20.8 19.5 19.6
Cash at bank and on deposit 9 11.9 16.5 17.4
-------- ------- -------
33.3 36.5 37.7
-------- ------- -------
Creditors: amounts falling due within
one year
Short term borrowings 9 (5.4) (7.7) (6.9)
Other creditors (21.8) (19.7) (24.3)
-------- ------- -------
(27.2) (27.4) (31.2)
-------- ------- -------
Net current assets 6.1 9.1 6.5
-------- ------- -------
Total assets less current 247.6 197.2 247.3
liabilities
Creditors: amounts falling due
after more than one year 9 (149.3) (100.4) (150.8)
Deferred income (8.5) (8.5) (8.5)
Provisions for liabilities and
charges 10 (18.9) (18.8) (18.7)
-------- ------- -------
Net assets 70.9 69.5 69.3
-------- ------- -------
Capital and reserves
Called up share capital 18.5 18.5 18.5
Share premium 4.4 4.4 4.4
Other reserves 5.8 5.8 5.8
Profit and loss account 42.2 40.8 40.6
-------- ------- -------
Total shareholders' funds 11 70.9 69.5 69.3
-------- ------- -------
Analysed as:
Total shareholders' funds (excluding
non-equity interests) 58.4 57.0 56.8
Non-equity interests 12.5 12.5 12.5
CASH FLOW STATEMENT
Six months to Six months to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited)
Note #m #m #m
Net cash inflow from operating
activities 12 15.6 13.6 33.0
-------- ------- -------
Returns on investments and servicing
of finance
Net interest paid (3.0) (2.9) (6.0)
Non-equity dividends paid (0.6) (0.6) (1.1)
Net costs of issue of new loans - (0.6) (0.7)
-------- ------- -------
(3.6) (4.1) (7.8)
-------- ------- -------
Corporation tax paid (1.6) (0.9) (3.0)
-------- ------- -------
Capital expenditure and investing
activities
Purchase of tangible fixed assets (10.1) (12.8) (28.0)
Contributions received 2.0 1.6 3.4
Proceeds on disposal of tangible
fixed assets 0.1 - 0.4
Loan advanced to ultimate holding
company - - (47.0)
-------- ------- -------
(8.0) (11.2) (71.2)
-------- ------- -------
Equity dividends paid (4.4) (14.1) (15.9)
-------- ------- -------
Cash outflow before management
of liquid resources and financing (2.0) (16.7) (64.9)
Management of liquid resources
being decrease/(increase) in short
term deposits 4.5 (9.5) (9.4)
-------- ------- -------
Financing
New term loans - 45.0 98.5
Capital element of loan and lease
repayments (3.5) (21.5) (25.8)
-------- ------- -------
(3.5) 23.5 72.7
-------- ------- -------
Decrease in cash 12 (1.0) (2.7) (1.6)
Cash, beginning of period 1.6 3.2 3.2
-------- ------- -------
Cash, end of period 0.6 0.5 1.6
-------- ------- -------
NOTES TO THE INTERIM RESULTS
Note 1: Accounting policies
The financial information contained in this interim announcement does not
constitute statutory accounts within the meaning of s.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 2004 as set out in the Annual Report and Accounts. Those accounts
(on which the auditors gave an unqualified report) have been delivered to
the Registrar of Companies.
We said in the statutory accounts for the year ended 31 March 2004, that in
line with the EU regulations, the company intended to adopt International
Financial Reporting Standards (IFRS) as the basis upon which it would report
its financial statements in the year ending 31 March 2006.
Our current understanding is that as the company does not prepare consolidated
accounts it will not be mandatory for the company to adopt IFRS, we are
therefore reconsidering the potential impact and the intentions of other
companies in the water sector before making a final decision.
The International Accounting Standards Board, has undertaken an extensive
exercise to develop new standards and improve existing ones throughout 2004.
At present, it is expected many of the standards will be endorsed by the EU by
early 2005, however uncertainty remains with regard to some of the standards
currently in issue.
Our initial assessment of the accounting policies that would materially differ
under IFRS's (if adopted) remain those set out in the 31 March 2004 Annual
Report and Accounts.
If the company does not adopt IFRS then it is required to fully adopt FRS17
for its financial statements for the year ending 31 March 2006.
Note 2: Turnover
Six months to Six months to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited)
#m #m #m
Turnover comprises -
Metered water supply 13.1 13.3 26.1
Unmetered water supply 19.8 20.3 40.2
Other services 2.4 2.4 4.3
------- ------- -------
35.3 36.0 70.6
------- ------- -------
Note 3: Operating costs
Six months to Six months to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited)
#m #m #m
Operating costs comprise -
Payroll cost, net of recharges to fixed 5.5 4.6 9.5
assets
Other operating expenses 13.2 13.6 26.7
Depreciation, net of amortisation of deferred 7.2 7.4 14.9
income
------- ------- -------
25.9 25.6 51.1
------- ------- -------
Note 4: Net interest payable
Six months to Six months to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited)
#m #m #m
Net interest payable and similar charges comprise -
Interest payable and similar charges 5.0 3.4 7.3
Interest income (1.8) (0.4) (1.1)
------- ------- -------
3.2 3.0 6.2
------- ------- -------
Note 5: Taxation on profit on ordinary activities
Six months to Six months to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited)
#m #m #m
The charge for taxation comprises -
Current tax:
Corporation Tax at 30% 1.0 1.2 3.0
Advance Corporation Tax written (0.6) (0.6) (0.7)
back
Adjustment to prior periods 0.6 0.9 1.1
Receipts in respect of group - - (0.4)
relief
------- ------- -------
Total current tax 1.0 1.5 3.0
------- ------- -------
Deferred tax:
Current period movement 1.0 1.1 1.0
Adjustment to prior periods (0.6) (0.8) (1.0)
Effect of discounting (0.2) (0.7) (0.6)
------- ------- -------
Total deferred tax 0.2 (0.4) (0.6)
------- ------- -------
Total taxation on profit on ordinary 1.2 1.1 2.4
activities
------- ------- -------
Note 6: Dividends
The dividend on the 8.75% Irredeemable Preference Shares for the first half
of the financial year was paid on 1 October 2004 and amounted to #0.5m. The
Board has declared an interim dividend of 47.15 pence (2003 interim - 29.10
pence) on each ordinary share amounting to #2.9m (2003 interim - #1.8m),
payable on 9 December 2004.
Note 7: Earnings per share attributable to ordinary shares
Six months to Six months to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited)
m m m
Earnings per share have been
calculated as follows:
Earnings #4.5 #5.8 #10.0
Weighted average number of 6.0 6.0 6.0
ordinary shares in issue ------- ------- -------
Note 8: Movement in tangible fixed assets
Six months to Six months to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited)
#m #m #m
The movement in tangible fixed assets comprises -
Net book value, beginning of 193.8 184.7 184.7
period
Additions 10.1 12.7 28.0
Disposals - (0.1) (0.3)
Grants and contributions (2.0) (1.6) (3.4)
Depreciation (7.4) (7.6) (15.2)
------- ------- -------
Net book value, end of period 194.5 188.1 193.8
------- ------- -------
Note 9: Net debt
Six months to Six months to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited)
#m #m #m
Net debt comprises -
Debt due after one year 149.3 100.4 150.8
Debt due within one year 5.4 7.7 6.9
Less cash balances and short term (11.9) (16.5) (17.4)
deposits
------- ------- -------
Net debt 142.8 91.6 140.3
------- ------- -------
Debt due after one year is stated net of unamortised issue costs of #0.6m
(30 September 2003 - #Nil, 31 March 2004 - #0.6m).
Note 10: Provisions for liabilities and charges
Six months to Six months to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited)
#m #m #m
Deferred taxation
provision
Deferred tax liability 32.6 32.5 32.3
Effect of discounting (13.7) (13.7) (13.6)
------- ------- -------
Net provision 18.9 18.8 18.7
------- ------- -------
Note 11: Total shareholders' funds
Six months to Six months to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited)
#m #m #m
Movement in shareholders'
funds -
Beginning of period 69.3 65.5 65.5
Profit for the period 5.0 6.3 11.1
Dividends (3.4) (2.3) (7.3)
------- ------- -------
End of period 70.9 69.5 69.3
------- ------- -------
Note 12: Supplementary cashflow information
Six months to Six months to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited)
#m #m #m
a) Reconciliation of operating
profit to net cash inflow from
operating activities -
Operating profit 9.4 10.4 19.5
Depreciation net of 7.2 7.4 14.9
amortisation of deferred
income
------- ------- -------
Cash flow from operations 16.6 17.8 34.4
Working capital movements (1.0) (4.2) (1.4)
------- ------- -------
Net cash inflow from operating 15.6 13.6 33.0
activities ------- ------- -------
Six months to Six months to Year to
30 September 30 September 31 March
2004 2003 2004
(unaudited) (unaudited)
#m #m #m
b) Reconciliation of net cash flow
to movement in net debt -
Decrease in cash in the period (1.0) (2.7) (1.6)
Cash used to repay borrowings 3.5 21.5 25.8
Cash from new borrowings - (45.0) (98.5)
Costs of issue of new loans - 0.6 0.7
(Decrease)/increase in short term (4.5) 9.5 9.4
deposits
------- ------- -------
Increase in net borrowings (2.0) (16.1) (64.2)
Movement in net debt not (0.5) (0.7) (1.3)
affecting cash flow - indexation
of existing debt
Net debt, beginning of period (140.3) (74.8) (74.8)
------- ------- -------
Net debt, end of period (142.8) (91.6) (140.3)
------- ------- -------
Note 13: PENSIONS
Pension arrangements
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.
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
WCPS. 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 ex-employees of Bristol Water
Holdings plc 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 financial position of the section is determined by an independent
actuary based on triennial valuations using the projected unit method. The
assumptions that have the most significant effect on the results of the
valuation are those relating to the rate of return on section investments
and the rate of increase in salaries, wages, pensions and dividends.
The most recent triennial actuarial valuation at 1 April 2002 assumed that
investment returns would be 7.2% pa pre-retirement and 5.2% pa
post-retirement, salaries would increase on average by 4.8% pa, and
pensions by 2.8% pa. The actuarial valuation at 1 April 2002 showed the
market value of section assets relating to the company as #97.0m and that
the actuarial value of these assets represented 107% of accrued benefits
allowing for future earnings increases.
The section is currently invested mainly in equities. The investment
strategy has been carefully examined and it has been concluded that the
appropriate long term strategy is to reduce the proportion of equities with
a corresponding increase in investments in bonds and other fixed income
securities. The timing of implementation of this change remains under
consideration. This policy has been agreed with the trustees.
The estimated cash contributions for 2004/05 are approximately #1.4m.
Accounting under SSAP24
Pension costs charged to the profit and loss account are computed in
accordance with Statement of Standard Accounting Practice Number 24 to spread
the cost of pensions over the employees' expected working lives with the
company.
For SSAP24 purposes only, an updated interim valuation was carried out as at 1
April 2003 to recognise the significant change in the funding level following
the downturn in the equity markets since 1 April 2002. The interim valuation
assumed that investment returns would be 7.5% pa pre-retirement and 5.5% pa
post-retirement. General salary increases were assumed to be 4.5% pa and
pensions to be 2.5% pa. The assets were brought in at 112% of their market
value to anticipate part of the subsequent upturn in the equity markets over
the year to 31 March 2004. The interim valuation showed the market value of
section assets relating to the company as #82.8m and that these represented
97% of accrued benefits allowing for future earnings increases.
The SSAP24 charge has been based on the updated interim valuation.
Accounting under FRS17 "Retirement Benefits"
The company currently accounts for pensions in accordance with SSAP24. On a UK
GAAP basis, FRS17 will become mandatory for accounting periods starting on or
after 1 January 2005, which for the company will be the year ending 31 March
2006. As explained in Note 1, the company has not yet decided if it will adopt
IFRS. If the company does adopt IFRS, then it would expect to adopt IAS 19
"Employee Benefits" on transition to IFRS.
IAS 19 requires the net financial position of the company's defined benefit
pension scheme's assets and scheme liabilities to be included on the balance
sheet either in full at the date of transition, or by means of the 'corridor'
approach i.e. spreading actuarial gains and losses over the expected average
remaining working lives of participating employees. Assuming the proposed
amendments to IAS 19 are adopted, actuarial gains and losses will be taken to
reserves. In some respects these treatments and the related disclosures
replicate the requirements of FRS17. As the company will not report on an IFRS
basis until 2006, it will continue to provide the transitional disclosures
under FRS17 in the intervening period. These disclosures are included in the
full year accounts.
The actuarial valuation of the Bristol Water plc section of the WCPS as at 1
April 2002 were updated to 31 March 2004, by an independent qualified actuary.
At 31 March 2004 the company's net pension liability, as disclosed in the
Annual Report and Accounts, was #12.4m. Since the Accounts were published the
actuary has reviewed his figures and reassessed the FRS17 deficit as at 31
March 2004 at #9.4m net of tax.
Under FRS17 as at 30 September 2004 the net deficit, after tax, of the section
would have been approximately #9.8m (30 September 2003 - #12.4m, 31 March 2004
- #9.4m as restated).
Note 14: Circulation
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.
INDEPENDENT REVIEW REPORT TO BRISTOL WATER PLC
Introduction
We have been instructed by the company to review the financial information which
comprises the Profit and Loss Account, Balance Sheet, Cash Flow Statement and
related notes, for the six months ended 30 September 2004. We have read the
other information contained in the interim report and considered whether it
contains any apparent misstatements or material inconsistencies with the
financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly we do not express
an audit opinion on the financial information. This report, including the
conclusion, has been prepared for and only for the company for the purpose of
the Listing Rules of the Financial Services Authority and for no other purpose.
We do not, in producing this report, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2004.
PricewaterhouseCoopers LLP
Chartered Accountants
Bristol
9 December 2004
Notes:
(a) The maintenance and integrity of the Bristol Water website is the
responsibility of the directors; the work carried out by the auditors does
not involve consideration of these matters and, accordingly, the auditors
accept no responsibility for any changes that may have occurred to the
interim report since it was initially presented on the website.
(b) Legislation in the United Kingdom governing the preparation and
dissemination of financial information may differ from legislation in other
jurisdictions.
This information is provided by RNS
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