Anglian: Coronavirus uncertainty heightens need to invest
Anglian has cut its carbon, used more renewable energy than ever before and had fewest customer contacts about water quality in the past year.
The company reported strong financial as well as environmental performance for the 12 months to 31 March as it reflected on the final year of AMP6 and looked ahead to the challenges of AMP7.
Anglian exceeded its 2020 carbon goals with capital carbon reduced by 61 per cent against a 2010 baseline and lowered operational carbon by 34 per cent against a 2015 baseline.
Beyond that, the company reported its highest use of energy from renewable sources with 131 GWh produced from biogas, solar power, and wind across its sites. It also hit its leakage target for the ninth consecutive year.
The company was named as the top-performing water and water recycling company in Ofwat’s 2019 service delivery report.
Having met these targets, the company reported outperformance payments of £62.6 million for AMP6 including £12.5 million of rewards expected for 2019/20.
Chief executive Peter Simpson, said the company’s strong track record of performance is “founded in large part on the significant investments we have made in delivering high-quality infrastructure and services over multiple AMPs”.
He said the company’s plans for the next five years will “undoubtedly” be influenced by the circumstances following the coronavirus crisis.
“As we reflect on the profound economic, societal and environmental shockwaves triggered by Covid-19, we and others will be focusing on how to build a more sustainable, resilient future in the face of climate change and, critically, to do all we can to play our part in the recovery,” Simpson said.
As an early supporter of ‘building back better’, Simpson emphasised the importance of investment in resilience across Anglian’s region to safeguard the environment and add value for communities.
This, Simpson argued, requires a level of investment beyond what Ofwat included in the final determination, which offered £750 million less than Anglian planned for.
On the appeal to the Consumer and Markets Authority (CMA), Simpson said: “In a post-Covid-19 world, and with the pace of climate change only accelerating, it will be more critical than ever to run our business in a way which drives the long-term sustainability and resilience of our region and our communities. We hope the outcome of the process will allow us to continue to do so.”
The company has repeatedly said that accepting Ofwat’s determination would only give short-term answers that would need extra investment in the future.
“It would lead to poorer outcomes, not just in the next five years but for many years to come, threatening our fundamental ability to deliver on our stated Purpose: to bring environmental and social prosperity to the region we serve.”
The company reported adjusted profit before tax for the 12 months to 31 March of £74 million, up £13.5 million and profit before tax for the period is £43.6 million, up £81.5 million from a loss of £37.9 million.
Dividend payments were marginally down on the prior year at £67.8 million compared to £68 million in 2019. The dividend was retained within the group and used to finance operating costs and working capital needs.
Dividends were not paid to shareholders of the parent company Anglian Water Group Ltd and directors have proposed to not pay a final dividend for a second consecutive year in line with the de-gearing target.
To manage the financial impacts of coronavirus, the company has cash balances of more than £1,048 million including a drawdown of liquidity facilities that are expected to be an adequate buffer.