In its financial report for the six months to September 2016, Sutton and East Surrey Water (SESW) said its associated company – SES Business Water – has been “actively pursuing opportunities” to acquire new customers in Scotland prior to the market opening in England next year.
SESW chairman Jeremy Pelczer said: “I am pleased to report that this programme is making good progress, with new customers worth over £1 million pa already signed-up, including some well-known high street names. We remain positive and enthusiastic about the prospects for this new business.”
He said SESW had been “clear from the outset” that it regarded the opening of a competitive market for business customers as “an opportunity rather than a threat”.
SES Business Water was set up as a “separate associated unit with a distinctive identity of its own”, and successfully applied for licences in both England and Scotland. It now has a core team of 10 employees, drawn principally from outside SESW, with the “skills and experience to thrive in a new competitive market”.
SES Business Water has been providing retail services on behalf of SESW to the business customers since September 2016. SESW has applied to the Department for the Environment, Food and Rural Affairs (Defra) to exit the market on 1 April 2017, with the aim of transferring its existing customers to SES Business Water.
The group reported an increase in turnover of 2.5 per cent to £32.4 million, compared with £13.6 million in the same period last year. Water supply income increased by £0.2 million (0.7 per cent) to £29.7 million, reflecting the 2.0 per cent increase in wholesale charges permitted under PR14.
Operating costs increased by 2.4 per cent to £21.7 million, primarily because of higher manpower costs (reflecting the agreed pay award from 1 April 2016 and investment in resources for retail services and preparations for the opening of a competitive market for business customers from April 2017). Operating profits increased by £0.3 million to £10.7 million.
SESW also reported that it was working to address its “disappointing” service incentive mechanism (SIM) performance. “We are determined to restore our performance to above industry average and avoid any penalties for below average performance when it comes to the next price review,” Pelczer said.
He added: “A concerted effort to improve turn-around times for customer enquiries and a programme of call-backs to keep customers updated on the progress of work will be key to short-term improvements, while a programme of process and performance improvements addresses the underlying issues.”