The water company, which submitted its revised business plan to Ofwat today, has accepted the regulator’s guidance on cost of capital, lowering its proposed wholesale vanilla WACC to 3.7%, from the 4% proposed in its original plan.
This comes as Wessex announces a 57% rise in tax after profit to £169.3m in 2013-14, from £107.9m the previous year. Turnover increased from £492.1m to £524.9m. Borrowings rose by a further £103.3m to help fund the £226m investment programme. This includes Wessex’s regional water supply grid, the company’s largest ever project.
Reflecting on the 40th anniversary of the company’s formation, and the 25th anniversary of its privatisation, chief executive Colin Skellett said: “Over the last 25 years, we have invested in excess of £5 billion to improve existing infrastructure and to raise standards. We have also halved the level of leakage and we now put less water into supply than we did in 1980.
“There was a time when the River Avon through Bristol, had to be chlorinated to kill the smell in the summer and some rural communities went days without proper water supplies during very dry weather. Those days are long gone and Wessex Water’s standards are now some of the highest in the world.”