Annual results 2020
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 ways of achieving this.
As a private company delivering essential public services, we want the way we deliver to add much wider value to society. 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.
In the reporting year 2019-2020, Wessex Water achieved top place in Ofwat’s efficiency ranking, delivered industry leading customer service and operational performance, returned to “industry leading” status in the Environment Agency’s environmental performance assessment and, for the ninth year running, had the fewest complaints per 10,000 customers of any water and sewerage company. Of our customers, 98% rated our service as good or very good and our Customer Service Excellence award was renewed for the fourth time. We again met our leakage target as we continue to drive down levels of leakage. This, combined with our work to reduce per capita consumption and major investment in creating a regional water grid, has ensured that it is now 43 years since there were any restrictions whatsoever on the use of water within our region.
Ofwat are introducing a new measure of customer experience (C-MeX), which was trialled during last year. We were pleased to be ranked as one of the top performing companies under the new measure. However, we prefer to also compare our service with the best performing businesses outside the water industry. So, during the year we began using Trustpilot ratings, encouraging customers to publicly rate and comment on our services. It was pleasing to see that to date 83% of our ratings are five-star.
Wessex Water is dedicated to protecting and improving the environment – our treatment works remove thousands of tonnes of polluting material every year and our continued investment in upgrading treatment has been a major factor in raising river water quality standards across the region. Our region now contains many of the country’s finest rivers and watercourses. Over the last five years, we have brought a range of stakeholders together into river catchment panels to co-ordinate work in protecting and further improving water quality and biodiversity.
We pioneered the use of catchment-based approaches to deliver sustainable, cost effective solutions by dealing with the source of pollution, not just the symptoms. We are currently working with farmers at 21 sites across our region to deliver bespoke, sustainable solutions. In addition to being rated as an industry-leading performer by the Environment Agency, we have maintained 100% compliance with our abstraction licences, the requirements of biosolids treatment and disposal, and delivery of the National Environment Programme.
Our innovative Wessex Water Marketplace provides a transparent mechanism for bringing new ideas and solutions to the problems we face. It has already helped us find new approaches for using data to reduce unnecessary overflows in the sewer network and to help us in detecting leaks from supply pipes.
During the year we also published our water resources management plan explaining how we will balance supply and demand to protect the environment and ensure resilient supplies over the next 25 years. This plan also includes our commitment to further reduce leakage levels by 15% by 2025. Wessex Water is also playing its part in driving out single-use plastic bottles. We have begun a programme to install public water points where everyone will be able to refill their reusable bottles free of charge.
Across all areas, our team have shown their commitment, professionalism and versatility during the COVID-19 crisis. They have continued their work to maintain all our services and deliver our on-going investment programme to ensure future resilience. Many of them have also taken part in volunteering within their local communities, supporting a wide range of initiatives.
The Wessex Water Academy offers development opportunities and training for all parts of the business to ensure our staff maintain the level of skills and knowledge they need. The academy also works with our apprenticeship programme – each year we take around 50 apprentices across the business, helping us to create our workforce for the future.
A major initiative during the year has been the formation of a company-wide group focusing on diversity and inclusion. This group has looked at the way we present ourselves to potential employees so we can access the widest possible range of candidates, and at our policies to simplify them and ensure they encourage diversity as well as helping all colleagues to have their voices heard. Alongside this, we have created a Group People’s Council, chaired by non-executive director, David Barclay, and subsidiary peoples’ councils in each major part of the business. We have also launched training in areas including unconscious bias.
Our gender pay gap reduced to 5.7% this year and remains significantly lower than the latest UK national average of 17.3%. The core values that support our social purpose mean that we are honest and ethical in the way we conduct our business. We value everybody’s contribution and ensure the health, safety and welfare of all our colleagues. Our relationships are built on respect and, as a long-term business, we plan, innovate and invest for future resilience.
Our financial stewardship
We have continued to invest at record levels, with more than £271m invested in maintaining and improving our assets and the services that they underpin. Our operating profit fell by £15.9m to £212.5m. Turnover increased by £4.6m to £552.3m. We have always been structured and financed in a simple and transparent way under YTL’s long-term stewardship that ensures we are financially resilient. Our intention is that 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.
While the future feels less certain today than it did six months ago, our performance over the last five years and through the COVID-19 crisis to date, gives us cause for optimism. During the five-year regulatory period ending 31 March 2020, Wessex Water was consistently rated as one of the top water and sewerage companies for service, efficiency, standards and environmental performance.
We are extremely fortunate to have a long-term, prudent investor in YTL, the sole owners of Wessex Water, for more than 20 years. Their prudence has avoided the excesses of some companies who have engaged in special dividends, complex financial structures and offshore arrangements. This long-term stewardship is important for a business that has to plan over many years and one that is so vital to public health and environmental quality.
The innovation, dedication and expertise of our employees have ensured that through the challenges such as “the beast from the east”, extremes of rainfall and now COVID-19, our excellent service and performance has continued unchanged. We will continue to deliver these high standards and support economic recovery across our region, playing a full part in the communities we serve and ensuring everyone can benefit from and afford our services.
The exit from COVID-19 provides an opportunity to work with government and regulators on delivering a green recovery, not just business as usual. Our drive to deliver net zero carbon by 2030 has already started and will gather pace as we continue to deliver sustainable, resilient investment in the face of climate change.
You will hear us speaking out clearly and visibly on all of these issues, articulating our story and taking others with us. I hope you will join us on the journey.