Annual results 2019

Annual results 2019

Our customers and communities | Our natural environment | Our people | Our financial stewardship | The future

Andy Pymer - Managing Director

"I am pleased to say that we have had another great year for our customers and stakeholders at Wessex Water. We have exceeded many of our targets this year and our annual review explains how we have done that as well as our many other achievements throughout the year. It also explains where we have missed targets and how we are improving. I hope you find it an interesting read."

At Wessex Water, our aim is to give all customers excellent standards of service by providing high quality water and environmental services that protect health, improve the environment and give customers good value for money. We work hard to deliver the best levels of service and continually challenge ourselves to find better, cheaper ways of achieving this.

A great example is our introduction of the Wessex Water Marketplace, a hub where we publish the outcomes we need to achieve as an open question, allowing the market to propose solutions rather than asking for a price for a pre-determined answer. We’ll work with the market to determine the best blend of solutions, sharing our data and being open and transparent in our assessment of the solutions.

Opening up our data, our challenges and our systems will mean that our customers, stakeholders and suppliers can be part of the solution to our future challenges.

Our customers and communities

We have recently published our plans for the period 2020-2025. This process started by asking all our customers what they wanted us to achieve in looking after the environment, delivering water efficiency, ensuring the highest water quality and minimising sewer flooding. 

We received responses from more than 140,000 customers, which provided an excellent foundation for our plans. This prompted, for example, our ambition to be in the top 20 service providers in the UK, which is testament to the stretching nature of our plans. It’s critical that the communities we serve feel part of what we do and who we are – without their help and involvement, we cannot meet our stretching performance targets. 

One area where we particularly need our communities to help us is in reducing blockages in our sewers. The vast majority of these are caused by people flushing wet wipes down their toilet or pouring fats down their kitchen sink. We need everyone to help us spread the message that we should only flush the three Ps – pee, poo and paper.

Our natural environment

Our region contains a wealth of rivers, streams, beaches and natural landscapes and is rich in wildlife with many areas protected by national and international designations. We work hard to protect and enhance the aquatic environment and our wider natural habitats. 

As well as investing more than £106m in environmental improvements over the past year, we continue to make greater use of catchment-based approaches to understand and manage nutrients in the environment. 

In the Poole Harbour catchment we have been working with farmers to offset our nitrogen contributions from Dorchester water recycling centre. Through our EnTrade auctions we have consistently beaten our target of 40 tonnes reduced per year over the last three years. We also continue to support catchment partnerships across our whole region, involving dozens of projects and partners and hundreds of farmers and landowners. 

We were rated as ‘good’ in the Environment Agency’s annual environmental performance assessment for 2018, with all agreed National Environment Programme schemes completed and 100% compliance with both water discharge permits and sewage sludge standards. We had an increase, however, in the number of pollutions and the proportion of pollution incidents reported by us rather than other parties fell to 74%. This is just below the 75% threshold for a leading rating. We have already made improvements to return us to leading for 2019. 

In the last year, we have also continued to make ourselves more resilient to external shocks by starting work on the second stage of our north Bristol sewer scheme – a major project that will accommodate economic development and housing growth by transporting waste water for treatment at our Avonmouth water recycling centre.

Our people 

We have a great team at Wessex Water – they live our ethics and values every day, treat our customers, the wider community, the environment and one another with respect. 

We welcome the innovation and fresh ideas that come with new colleagues. Equally, our long-term nature can be seen in the number of people who work with us for their entire career – we greatly value the experience and knowledge that comes from 30 or more years’ work at Wessex Water. 

As these colleagues retire, they are passing on their skills and experience to new generations of apprentices. Our very successful apprentice programme has continued to grow and 92 people have joined our scheme this year.

Our financial stewardship 

We have continued to invest at record levels, with more than £245m invested in maintaining and improving our assets and the services that they underpin. Our operating profit fell £6m (excluding exceptional items) to £228m. Turnover increased by £7m to £548m and operational costs increased by £8m to £213m (excluding exceptional items). Under YTL’s long-term stewardship we have always been structured and financed in a simple and transparent way that ensures we are financially resilient. Our gearing will continue at under 70% and we will continue to maintain a straightforward corporate structure. We paid our taxes, contributing more than £60m last year in corporation tax, business rates and other taxes and are classed by HMRC as low risk.

The future

The coming years present opportunities that are both exciting and critical for the ongoing success of the UK’s water industry. We must work hard to bridge gaps in knowledge and lifestyle, bringing our local communities together to fight against plastics, pollutions and sewer blockages, and ensuring we value our water and use it wisely. We must continue to invest in critical infrastructure, delivering the highest quality of service and performance at a price that offers value for money to all our customers. We have achieved some excellent further steps on this journey over the last 12 months and I thank our team and our communities for their help in getting us this far, and for their continued commitment into the future.