Dee Valley Water has announced a positive start to AMP6 with the publication this morning of its Annual Results for the year ended 31 March 2016 - the firm has moved up to 4th place in Ofwat's SIM rankings.
The water company said that profit before tax was broadly consistent with the prior year, with the impact of a reduction in revenue partially offset by lower operating expenses.
Profit from operations of £6.6m (2015: £7.5m) - revenue for the year was impacted by Ofwat’s PR14 Final Determination, which imposed a reduction in prices in this first year of AMP6, and lower consumption amongst certain large, non-household customers;
Dee Valley customers have the 4th lowest water bills in England and Wales and ranks 4th out of the 18 water companies in England and Wales on Ofwat's qualitative measure of customer service (SIM), up from 8th place in 14/15.
Ofwat’s qualitative Customer Experience Survey for 2015-16, places Dee Valley Water second for billing, seventh for clean water and fourth overall out of the 18 water companies in England and Wales – all significant increases on the previous year. The company’s Service Incentive Mechanism (SIM) performance is 83.5 (out of 100). Ofwat’s target for the company is 80.
The utility which has had a social tariff in place from April 2016, saw a 13% reduction in customer complaints compared to the prior year and is ranked 1st in the industry by CC Water research for value for money and quality of response to customer contacts.
Following the agreement of a five-year, £30 million revolving credit facility early in the year, the Group said it is well placed to deliver the investment plan agreed with Ofwat for the period to 2020. The facility provides cost-effective funding to support the delivery of the largest capital investment plan in the Group’s history.
“We have made significant commercial changes to the Company which have increased our operational performance and sharpened our focus on providing an even better service for our customers’” said Ian Plenderleith, Chief Executive.
Mean zonal compliance improved in 2015 to 99.95%, which is the industry average. Discoloured water customer contacts for 2015 were 1.32 per 1,000 population, compared to 2.28 the previous year.
“All of these key indicators confirm that we have made strong progress improving our operational performance this year. Alongside the financial certainty provided by the agreement of financing at favourable interest rates, this ensures the Group can progress confidently into the second year of AMP6,” Ian Plenderleith added.
The Board proposed a final dividend of 42.0p per share on 9 June, which is in accordance with the company’s AMP6 divided policy published in May 2015.
Operational highlights during the year included cleaning one seventh of the network, more than doubling to 290km - a key contributor to the significant reduction in discoloured water customer contacts.
Delivery of Dee Valley Water’s key project for this AMP, the replacement of the Legacy treatment works, is progressing with capital investment forecast to increase in the year ended 31 March 2017 as work on the project continues.
Commenting on the results, Ian Plenderleith said:
“It has been a very positive start to this regulatory period for Dee Valley Water. In 2015/16 we have continued to focus on the customer and customer service, and thanks to the efforts and hard work of all my colleagues across Dee Valley Water we have made huge progress.”
“Our bills remain the fourth lowest in the sector and our investments into new customer systems have reaped benefits, with a strong improvement in our ranking on the Ofwat qualitative SIM measure and customer complaints down 13% year-on-year.”
“In previous years, customer satisfaction with water quality had been a particular challenge for us, however I am pleased to report that we have risen to this challenge with customer contacts for discoloured water reducing by 27% year-on-year. We are now well on track to outperform the target set for us by our regulators and meet the standards expected by our customers.”
“In 2015/16 we reviewed and improved our investment programme to drive further benefits for our customers and shareholders, and will continue to challenge ourselves to look for more efficient and effective ways to deliver a high quality service to our customers.”
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