TIDMBWRA
RNS Number : 9974H
Bristol Water PLC
30 November 2022
Announcement of unaudited interim results for the six months
ended 30 September 2022
Bristol Water plc (the "Company") announces its interim
unaudited financial statements for the six months ending 30
September 2022.
The Company's interim financial results are set out below and
can also be accessed via the Company's website.
For further information contact:
Mel Karam, Chief Executive Officer
Paul Boote, Chief Financial Officer
Bristol Water plc
Tel 0117 953 6470
Or contact: Bristol Water Corporate Affairs on 0117 953 6470 during
office hours or 0800 917 8066 at any time.
FINANCIAL HIGHLIGHTS
Six months Six months
to to
30 September 30 September
2022 2021
restated
(unaudited) (unaudited)
GBPm GBPm
Turnover 69.7 62.8
EBITDA 32.9 31.2
Profit before taxation 0.4 11.2
Profit after taxation 0.3 (14.1)
Net debt (excluding 8.75% irredeemable cumulative
preference shares) 400.5 378.3
Capital investment in the period 23.9 17.6
Financial Performance
Bristol Water financial performance in this period has been
encouraging despite the operational and financial pressures, with
EBITDA increasing by 5% compared to the same period last year. The
business has contributed underlying revenue of GBP69.7 million,
underlying EBITDA of GBP32.9 million and underlying profit before
tax of GBP0.4 million. This reflects higher revenue from regulatory
bill increases offset by higher power costs as a result of both
price inflation, and resource costs incurred to avoid restrictions
in the very hot summer. The impact of Bristol Water's
transformation programme in 2020/21 has enabled some mitigation of
these increases.
Bristol Water has delivered increased revenues of c.11% in the
half year to 30 September 2022, compared to the same 6 month period
last year. Overall household demand in the Bristol region has
remained relatively stable with reductions in household demand
being offset by increases as a result of the higher regulatory
allowances in its business plan determined by the CMA.
Non-Household demand has recovered further in the first half of the
year in addition to tariff increases.
Bristol Water operating costs were above expectations as a
result of the increase in power costs in the year which were around
90% hedged prior to the start of this financial year. In addition
the hot summer resulted in water resource action being taken to
protect its Mendip resources which resulted in more expensive
northern water sourcing being utilised and therefore resulting in
further power usage.
Bristol Water's net debt has increased by GBP22.2m over the
period mainly as a result of significant RPI inflation with around
50% of the debt being RPI index linked.
Bristol Water's capital programme totalled GBP23.9m (excluding
capitalised interest) for the six month period and includes
resilience focused investment across the network, new development
expenditure and initiatives to stabilise supply interruptions and
leakage performance.
Operational Performance
Operationally the hot summer has been challenging with ground
movement and high temperatures resulting in an elevated number of
bursts, impacting our targeted performance in this area. The number
of bursts we repair per 1000km and Supply interruptions are both
currently underperforming versus target as a result of this,
despite a significant "Continuous Water Supply" effort to ensure
customers remain in supply through these incidents
In addition to the impact on customers' supply, the increase in
network incidents has an impact on the appearance of the water
delivered and as a result the volume of contacts relating to water
quality has increased above target.
Leakage performance continues to be industry leading, and
investment continues to ensure that leaks are identified and fixed
quickly through both technological and manual methods.
C-Mex (customer experience measure) rank is 7th place across the
industry in the year to date. This result is disappointing and is
not in line with recent performance and action plans are underway
to ensure that performance reverts to the forecast performance of
5(th) for the year, and we continue to drive a focus on putting the
customer first in everything we do.
It is fundamental to performance that all our employees go home
safe at the end of each working day. Performance in this area
continues to be challenging, with the lost time accident frequency
rate higher than targeted. Focus continues on this area and to
ensure the culture and actions we take, every day, encourage an
open culture and a focus on continued improvement.
INCOME STATEMENT
For the six months ended 30 September 2022
Six months to Six months to Year to
30 September 30 September 31 March
2022 2021 2022
restated* restated*
(unaudited) (unaudited) (unaudited)
Note GBPm GBPm GBPm
Revenue 6 69.7 62.8 125.5
Operating costs 7 (49.1) (44.2) (88.8)
Impairment losses on trade receivables (2.1) (1.5) (2.7)
============== ============== =============
Operating costs before exceptional items (51.2) (45.7) (91.5)
Exceptional operating costs - (0.1) (0.1)
============== ============== =============
Total net operating costs (51.2) (45.8) (91.6)
Operating profit 18.5 17.0 33.9
Net interest payable and similar charges 8 (17.6) (5.3) (17.8)
Dividends on 8.75% irredeemable cumulative preference shares 8 (0.5) (0.5) (1.1)
============== ============== =============
Net interest payable and similar charges (18.1) (5.8) (18.9)
Profit on ordinary activities before taxation 0.4 11.2 15.0
Taxation on profit on ordinary activities 9 (0.1) (25.3) (25.5)
Profit/(loss) for the period/year 0.3 (14.1) (10.5)
============== ============== =============
Earnings per ordinary share 10 5p (235.0)p (175.0)p
All activities above relate to the continuing activities of the
Company.
* See note 5 for details of the restatement due to a change in
accounting policies.
STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 September 2022
Six months to Six months to Year to
30 September 30 September 31 March
2022 2021 2022
restated* restated*
(unaudited) (unaudited) (unaudited)
Note GBPm GBPm GBPm
Profit/(loss) for the period/year 0.3 (14.1) (10.5)
Other comprehensive expense:
Items that will not be reclassified to profit and loss
Actuarial losses on retirement benefit surplus 0.1 (0.8) (1.0)
Re-measurement of defined benefit pension scheme 9 - 0.3 0.4
============== ============== ============
Other comprehensive income/(expense) for the period/year, net of
tax 0.1 (0.5) (0.6)
Total comprehensive income/(expense) for the period/year 0.4 (14.6) (11.1)
============== ============== ============
* See note 5 for details of the restatement due to a change in
accounting policies.
The notes on pages 8 to 19 form part of this condensed half year
financial information.
STATEMENT OF FINANCIAL POSITION
As at 30 September 2022
30 September 30 September 31 March
2022 2021 2022
restated* restated*
(unaudited) (unaudited) (unaudited)
Note GBPm GBPm GBPm
Non-current assets
Property, plant and equipment 11 689.6 687.0 696.6
Intangible assets 12 13.3 12.8 12.7
Other investments - Loans to a
UK holding Company 61.1 61.1 61.1
Deferred tax assets 0.1 0.1 0.1
Retirement benefit surplus 13 8.0 8.4 8.1
============= ============= =============
772.1 769.4 778.6
Current assets
Inventory 2.2 1.7 1.9
Trade and other receivables 35.9 33.0 29.5
Cash and cash equivalents 14.3 14.8 12.0
============= ============= =============
52.4 49.5 43.4
Total assets 824.5 818.9 822.0
============= ============= =============
Non-current liabilities
Lease liabilities 14 (0.9) (1.3) (1.1)
Deferred income tax liabilities (93.9) (101.6) (99.5)
Borrowings and derivatives 15 (413.5) (382.4) (399.7)
8.75% irredeemable cumulative preference
shares 15 (12.5) (12.5) (12.5)
Deferred income (1.6) (19.3) (18.5)
Government Grants (0.3) (0.3) (0.3)
============= ============= =============
(522.7) (517.4) (531.6)
Current liabilities
Lease liabilities 14 (0.4) (0.4) (0.4)
Current portion of borrowings and - (9.0) -
derivatives
Current portion of deferred income (2.7) (2.7) (2.7)
Trade and other payables (48.9) (36.3) (38.0)
(52.0) (48.4) (41.1)
Total liabilities (574.7) (565.8) (572.7)
============= ============= =============
Net assets 249.8 253.1 249.3
============= ============= =============
Equity
Called-up share capital 6.0 6.0 6.0
Share premium account 4.4 4.4 4.4
Other reserves 5.8 5.8 5.8
Retained earnings 233.6 236.9 233.1
============= ============= =============
Total Equity 249.8 253.1 249.3
============= ============= =============
* See note 5 for details of the restatement due to a change in accounting
policies.
The notes on pages 8 to 19 form part of this condensed half year financial
information.
STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 September 2022
Called up share capital Share premium Capital redemption Retained earnings Total
account reserve
GBPm GBPm GBPm GBPm GBPm
Balance at 1 April 2021
(restated*) 6.0 4.4 5.8 253.0 269.2
======================== ============== =================== ================== =======
Loss for the year - - - (14.1) (14.1)
Other comprehensive
expense for the year:
Actuarial losses
recognised in respect of
retirement - - - (0.8) (0.8)
benefit obligations
Re-measurement of defined
benefit scheme - - - 0.3 0.3
Total comprehensive
expense for the year - - - (0.5) (0.5)
Ordinary dividends - - - (1.5) (1.5)
Balance as at 30
September 2021 6.0 4.4 5.8 236.9 253.1
======================== ============== =================== ================== =======
Balance at 1 April 2022
(restated*) 6.0 4.4 5.8 233.1 249.3
======================== ============== =================== ================== =======
Profit for the period - - - 0.3 0.3
Other comprehensive
expense for the period:
Actuarial losses
recognised in respect of
retirement - - - 0.1 0.1
benefit obligations
Re-measurement of defined - - - - -
benefit scheme
Total comprehensive
expense for the period - - - 0.4 0.4
Ordinary dividends - - - - -
Share-based payments - - - 0.1 0.1
Balance as at 30
September 2022 6.0 4.4 5.8 233.6 249.8
======================== ============== =================== ================== =======
The Board has not proposed interim dividends on the ordinary
shares in respect of the period ended 30 September 2022 (6 months
ended 30 September 2021: GBPnil).
* See note 5 for details of the restatement due to a change in
accounting policies.
The notes on pages 8 to 19 form part of this condensed half year
financial information.
CASH FLOW STATEMENT
For the six months ended 30 September 2022
Six months to Six months to Year to
30 September 30 September 31 March
2022 2021 2022
restated* restated*
(unaudited) (unaudited) (unaudited)
Note GBPm GBPm GBPm
Cashflows from operating activities
Profit before taxation 0.4 11.2 15.0
Adjustments for:
Share based payments 0.1 - 0.1
Deferred income amortisation 6 (2.0) (1.5) (3.2)
Depreciation 7 12.7 12.3 25.0
Amortisation of intangibles 7 1.7 1.9 3.9
Difference between pension charges and contributions paid 0.2 0.4 0.9
Profit on disposal of assets - - (0.1)
Interest income 8 (1.8) (1.8) (3.6)
Interest expense 8 20.1 7.7 22.8
Pension interest income 8 (0.2) (0.1) (0.3)
Increase in inventory (0.3) - (0.2)
Increase in trade and other receivables (4.4) (4.0) (1.3)
Increase /(decrease) in trade and other creditors and
provisions 5.7 2.0 (0.7)
============== ============== =============
Cash generated from operations 32.2 28.1 58.3
Interest paid (7.2) (6.2) (12.4)
Corporation taxes paid (1.5) (1.6) (1.9)
Contributions received 1.5 1.2 2.1
============== ============== =============
Net cash inflows from operating activities 25.0 21.5 46.1
============== ============== =============
Cash flows from investing activities
Purchase of property plant and equipment and intangibles (23.0) (19.2) (40.4)
Proceeds from sale of fixed assets - - 0.2
Interest received - 1.8 3.6
Net cash used in investing activities (23.0) (17.4) (36.6)
============== ============== =============
Cash flows from financing activities
Proceeds from loans and borrowings 8.0 2.0 11.0
Repayment of loans and borrowings (7.0) - (9.0)
Payment of finance lease liabilities (0.2) (0.2) (0.4)
Preference dividends paid (0.5) (0.5) (1.1)
Equity dividends paid - (1.5) (8.9)
============== ============== =============
Net cash from financing activities 0.3 (0.2) (8.4)
============== ============== =============
Net increase in cash and cash equivalents 2.3 3.9 1.1
Cash and cash equivalents, beginning of period 12.0 10.9 10.9
Cash and cash equivalents, end of period 14.3 14.8 12.0
============== ============== =============
* See note 5 for details of the restatement due to a change in
accounting policies.
The notes on pages 8 to 19 form part of this condensed half year
financial information.
NOTES TO THE INTERIM ACCOUNTS
For the six months ended 30 September 2022
1 General Information
Bristol Water plc ("the Company") is a regulated Water only supply company holding an instrument
of appointment as set out by the Water Industry Act 1991. The company is the licensed monopoly
provider of water services in the Bristol area, and as such is regulated by the Water Services
Regulation Authority - Ofwat.
The Company is a public liability company, limited by shares with irredeemable preference
shares and debenture stock listed on the London Stock Exchange.
The address of its registered office is Bridgwater Road, Bristol, BS13 7AT, England.
2 Basis of preparation
The financial information contained in this interim announcement does not constitute statutory
accounts within the meaning of section 435 of the Companies Act 2006. The interim accounts
have been prepared in accordance with Financial Reporting Standard 104 "Interim Financial
Reporting" issued by the Financial Reporting Council and the Disclosure Rules and Transparency
Rules of the United Kingdom's Financial Conduct Authority.
The Company has adopted FRS 101 "Reduced disclosure framework - Disclosure exemptions from
EU-adopted IFRS for qualifying entities".
3 Accounting policies
The same accounting policies and methods of computation used in preparing the annual financial
statements as at 31 March 2022 have been used in preparing these interim accounts, except
as disclosed in note 5.
3.1 Going concern
The Company meets its day-to-day working capital requirements through its cash reserves and
borrowings. The Company's forecasts and projections show that the Company will be able to
operate within the level of its current cash reserves and borrowing facilities. After making
enquiries, the Directors have an expectation that the Company has adequate resources to continue
in operational existence for the foreseeable future. The Company therefore continues to adopt
the going concern basis in preparing its financial statements. Further information on the
Company's borrowings is given in note 15.
4 Critical accounting estimates and judgments
The preparation of interim financial statements requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and the reported amounts
of assets and liabilities, income and expense. Actual results may differ from these estimates.
Estimates and judgments are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable
under the circumstances
The significant judgements made by management in applying the Company's accounting policies
and the key sources of estimate uncertainty were the same as those applied to the financial
statements for the year ended 31 March 2022, except as disclosed in note 5.
5 Change in accounting policies
As a result of the acquisition of the Company by Pennon Group Plc on 3 June 2021, the Company's
accounting policies adopted for the statutory financial statements have been aligned with
those of Pennon Group Plc. This note explains the impact of these accounting policies on the
Company's financial statements.
Reconciliation of equity as at 1 April 2021 and 31 March 2022
31 March change 31 March 2021 31 March change 31 March
2021 restated 2022 2022
as (unaudited) as restated
originally originally (unaudited)
presented presented
Note GBPm GBPm GBPm GBPm GBPm GBPm
Non-current assets
Property, plant and
equipment A 682.9 - 682.9 696.6 - 696.6
Intangible assets 13.3 - 13.3 12.7 - 12.7
Investments 61.1 - 61.1 61.1 - 61.1
Deferred tax assets C 5.9 (5.8) 0.1 7.9 (7.8) 0.1
Retirement benefit surplus 9.1 - 9.1 8.1 - 8.1
=========== ======= ================ =========== ======= ============
772.3 (5.8) 766.5 786.4 (7.8) 778.6
Current assets
Inventory 1.7 - 1.7 1.9 - 1.9
Trade and other receivables 29.6 - 29.6 29.5 - 29.5
Cash and cash equivalents 10.9 - 10.9 12.0 - 12.0
=========== ======= ================ =========== ======= ============
42.2 - 42.2 43.4 - 43.4
=========== ======= ================ =========== ======= ============
Total assets 814.5 (5.8) 808.7 829.8 (7.8) 822.0
=========== ======= ================ =========== ======= ============
Non-current liabilities
Lease liabilities (1.5) (1.5) (1.1) - (1.1)
Deferred tax liabilities C (72.3) (6.2) (78.5) (93.2) (6.3) (99.5)
Borrowings and derivatives (379.2) - (379.2) (399.7) - (399.7)
8.75% irredeemable
cumulative preference
shares (12.5) - (12.5) (12.5) - (12.5)
Deferred income B (82.9) 63.3 (19.6) (83.0) 64.5 (18.5)
Government grants (0.3) - (0.3) (0.3) - (0.3)
=========== ======= ================ =========== ======= ============
(548.7) 57.1 (491.6) (589.8) 58.2 (531.6)
=========== ======= ================ =========== ======= ============
Current liabilities
Lease liabilities (0.4) - (0.4) (0.4) - (0.4)
Borrowings and derivatives (9.0) - (9.0) - - -
Deferred income B (1.8) (0.9) (2.7) (1.9) (0.8) (2.7)
Trade and other payables (35.3) - (35.3) (38.0) - (38.0)
Provisions for liabilities (0.5) - (0.5)
=========== ======= ================ =========== ======= ============
(47.0) (0.9) (47.9) (40.3) (0.8) (41.1)
Total liabilities (595.7) 56.2 (539.5) (630.1) 57.4 (572.7)
=========== ======= ================ =========== ======= ============
Net assets 218.8 50.4 269.2 199.7 49.6 249.3
Equity
Called-up share capital 6.0 - 6.0 6.0 - 6.0
Share premium account 4.4 - 4.4 4.4 - 4.4
Other reserves 5.8 - 5.8 5.8 - 5.8
Retained earnings A,B,C 202.6 50.4 253.0 183.5 49.6 233.1
Total Equity 218.8 50.4 269.2 199.7 49.6 249.3
=========== ======= ================ =========== ======= ============
5 Change in accounting policies (continued)
Reconciliation of equity as at 30 September 2021
30 September 2021 change 30 September 2021
as originally presented restated
(unaudited)
Note GBPm GBPm GBPm
Non-current assets
Property, plant and equipment A 687.0 - 687.0
Intangible assets 12.8 - 12.8
Investments 61.1 - 61.1
Deferred tax assets C 7.8 (7.7) 0.1
Retirement benefit surplus 8.4 - 8.4
========================= ======= ==================
777.1 (7.7) 769.4
========================= ======= ==================
Current assets
Inventory 1.7 - 1.7
Trade and other receivables 33.0 - 33.0
Cash and cash equivalents 14.8 - 14.8
========================= ======= ==================
49.5 - 49.5
========================= ======= ==================
Total assets 826.6 (7.7) 818.9
========================= ======= ==================
Non-current liabilities
Lease liabilities (1.3) - (1.3)
Deferred tax liabilities C (95.2) (6.4) (101.6)
Borrowings and derivatives (382.4) - (382.4)
8.75% irredeemable cumulative preference shares (12.5) - (12.5)
Deferred income B (83.1) 63.8 (19.3)
Government grants (0.3) - (0.3)
(574.8) 57.4 (517.4)
========================= ======= ==================
Current liabilities
Lease liabilities (0.4) (0.4)
Current portion of borrowings and derivatives (9.0) - (9.0)
Deferred income B (1.9) (0.8) (2.7)
Trade and other payables (36.3) - (36.3)
========================= ======= ==================
(47.6) (0.8) (48.4)
========================= ======= ==================
Total liabilities (622.4) 56.6 (565.8)
========================= ======= ==================
Net assets 204.2 48.9 253.1
========================= ======= ==================
Equity
Called-up share capital 6.0 - 6.0
Share premium account 4.4 - 4.4
Other reserves 5.8 - 5.8
Retained earnings A,B,C 188.0 48.9 236.9
Total Equity 204.2 48.9 253.1
========================= ======= ==================
5 Changes in accounting policies (continued)
Reconciliation of total comprehensive income for the year ended
31 March 2022
Year to change Year to Period to 30 change Period to 30
31 March 2022 31 March 2022 September 2021 Sept 2021
as originally restated as originally restated
presented (unaudited) presented (unaudited)
Note GBPm GBPm GBPm GBPm GBPm GBPm
Revenue B 124.2 1.3 125.5 62.2 0.6 62.8
Total operating costs (91.6) - (91.6) (45.8) - (45.8)
=============== ======= =============== =============== ======= ===============
Operating profit 32.6 1.3 33.9 16.4 0.6 17.0
Net interest payable and
similar charges (18.9) - (18.9) (5.8) - (5.8)
Profit on ordinary
activities before
taxation 13.7 1.3 15.0 10.6 0.6 11.2
Taxation on profit
on ordinary
activities C (23.4) (2.1) (25.5) (23.2) (2.1) (25.3)
Profit for the period
/year (9.7) (0.8) (10.5) (12.6) (1.5) (14.1)
=============== ======= =============== =============== ======= ===============
Other comprehensive
income for the year,
net of tax (0.6) - (0.6) (0.5) - (0.5)
Total comprehensive
income for the year (10.3) (0.8) (11.1) (13.1) (1.5) (14.6)
=============== ======= =============== =============== ======= ===============
Notes to the reconciliation of equity as at 1 April 2021 and 31 March
2022 and total comprehensive income for the year ended 31 March 2022
Developer contributions
The Company previously recognised all contributions received from developers
in respect of network and other assets as deferred income and amortised
this to revenue over a period of 60 years. This policy has been changed
to align with the Pennon Group plc's policy.
A Contributions relating to the construction of infrastructure
network assets
These contributions are now recognised in property,
plant and equipment along with the asset to which
they relate, with amortisation being recognised in
depreciation.
Where assets are constructed or provided by the Company
or assets transferred to the Company, it is considered
that there is an explicit or implied performance obligation
to provide an ongoing water service, with the result
that the revenue is recognised over a time no longer
than the economic life of assets provided by or transferred
to the company.
Contributions relating to assets not yet completed
are treated as a contract liability and are recognised
in deferred income on the balance sheet.
Notes to the reconciliation of equity as at 1 April 2021 and 31 March
2022 and total comprehensive income for the year ended 31 March 2022
(continued)
It was impracticable to determine the period-specific or cumulative
effect of the prior periods presented and therefore the new accounting
policy has been applied from the 1 April 2022 onwards with none
of the comparative periods restated.
GBP16.4m has been reclassified from deferred income to property,
plant and equipment as at 30 September 2022. GBP0.2m of amortisation
relating to these assets has been reclassified from revenue to
depreciation for the 6months ending 30 September 2022.
B Contributions relating to connections or alterations to the water
network
Where the performance obligation relates solely to a connection
to the network, revenue is recognised at the point of connection
when the customer is deemed to obtain control.
Contributions paid in advance where the connection has not yet
completed are treated as a contract liability and are recognised
in deferred income on the balance sheet.
As at 31 March 2022, GBP63.7m (1 April 2021: GBP62.4m and 30 September
2021: GBP63.0m) additional revenue has been recognised.
Revenues and profit before tax for the year ended 31 March 2022
in the comparative Income Statement was increased by GBP1.3m (30
September 2021 GBP0.6m).
C Taxation
The adjustments per notes A and B lead to different temporary taxation
differences. In line with the Company's accounting policies, the
Company has accounted for such differences and recognised the related
net deferred tax and corporation tax liabilities.
At 31 March 2022, an increase in deferred tax liability of GBP14.1m
(1 April 2021: GBP12.0m and 30 September 2021: GBP14.1m) was recognised,
resulting in a reclassification from assets to liabilities on the
balance sheet.
6 Revenue
Six months to Six months to Year to
30 September 2022 30 September 2021 31 March 2022
restated restated
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Appointed income
Household - measured 30.6 28.1 55.3
Household - unmeasured 21.6 20.8 40.9
Non-household- measured 13.2 10.3 22.2
Non-household - unmeasured 0.2 0.2 0.3
Contributions from developers 2.0 1.5 3.2
Third party services 0.9 0.8 1.4
Rental income 0.6 0.5 1.0
===================== ===================== ================
69.1 62.2 124.3
Non-appointed income
Recreations 0.3 0.3 0.7
Rental income 0.1 0.1 0.2
Other 0.2 0.2 0.3
===================== ===================== ================
0.6 0.6 1.2
69.7 62.8 125.5
===================== ===================== ================
7 Operating expenses
Six months to Six months to Year to
30 September 2022 30 September 2021 31 March 2022
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Operating expenses include -
Payroll cost, net of recharges to fixed assets
and including
retirement benefit costs 8.6 8.6 17.0
Depreciation and amortisation 14.4 14.2 28.9
Profit on disposal of assets - - (0.1)
Exceptional costs include -
Acquisition costs - 0.1 0.1
The acquisition costs relate to costs incurred in relation to the acquisition of the Company
by Pennon Group plc and the review of the acquisition by the Competition and Markets Authority.
8 Net interest payable and similar charges
Six months to Six months to Year to
30 September 2022 30 September 2021 31 March 2022
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Interest payable and similar charges:
Bank borrowings 1.7 1.0 2.0
Term loans and debentures:
interest charges 5.6 5.1 10.4
indexation 12.8 1.2 9.6
Leases - - 0.1
Capitalisation of borrowing cost (0.5) (0.1) (0.4)
Dividends on 8.75% irredeemable cumulative
preference shares 0.5 0.5 1.1
==================== =================== ===============
20.1 7.7 22.8
Interest receivable and similar income:
Interest income in respect of retirement
benefit scheme (0.2) (0.1) (0.3)
Loan to Bristol Water Holdings UK Ltd -
interest receivable (1.8) (1.8) (3.6)
Other external investments and deposits income - - -
==================== =================== ===============
(2.0) (1.9) (3.9)
Total net interest payable and similar charges 18.1 5.8 18.9
==================== =================== ===============
The rate used to determine the amount of borrowing costs eligible for capitalisation was 9.16%
(30 September 2021: 3.5%), which is the weighted average interest rate of applicable borrowings.
Dividends on the 8.75% irredeemable cumulative preference shares are payable at a fixed rate
of 4.375% on 1 April and 1 October each year. Payment by the Company to the share registrars
is made two business days earlier. The payments are classified as interest in accordance with
IAS 39 "Financial Instruments - Recognition and Measurement".
9 Taxation Six months to Six months to Year to
30 September 2022 30 September 2021 31 March 2022
restated restated
(unaudited) (unaudited) (unaudited)
GBPm GBPm GBPm
Tax expense included in Income Statement
Current tax:
Corporation tax on profits for the period /year 5.7 2.2 1.3
Adjustment in respect of prior period - - 3.3
=================== =================== ===============
Total current tax 5.7 2.2 4.6
Deferred tax:
Origination and reversal of timing differences (5.6) 0.2 1.6
Adjustment to prior periods - - (3.1)
Effect of change in UK corporation tax rate - 22.9 22.4
=================== =================== ===============
Total deferred tax (5.6) 23.1 20.9
Tax expense on profit 0.1 25.3 25.5
=================== =================== ===============
Tax income (included in other comprehensive income)
Remeasurement of post-employment benefit liability - (0.3) (0.4)
Total tax income included in other comprehensive
income - (0.3) (0.4)
=================== =================== ===============
10 Earnings per ordinary share
At At At
30 September 2022 30 September 2021 31 March 2022
restated restated
(unaudited) (unaudited) (unaudited)
m m m
Basic earnings per ordinary share have been
calculated as follows -
Earnings attributable to ordinary shares GBP0.3 GBP(14.1) GBP(10.5)
Weighted average number of ordinary shares 6.0 6.0 6.0
=================== =================== ===============
5p (235.0)p (175.0)p
As the Company has no obligation to issue further shares, disclosure of earnings per share
on a fully diluted basis is not relevant.
11 Property, plant and equipment
Six months to Six months to Year to
30 September 2022 30 September 2021 31 March 2022
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Net book value, beginning of period 696.6 682.9 682.9
Effect of accounting policy change (16.4) - -
Additions 22.1 16.4 38.7
Disposals - - -
Depreciation charge for the period (12.7) (12.3) (25.0)
Net book value, end of period 689.6 687.0 696.6
====================== ===================== ================
The net book value of property, plant and equipment includes GBP6.9m (30 September 2021: GBP6.3m)
of borrowing costs capitalised in accordance with IAS 23. During the six months ended 30 September
2022 GBP0.5m was capitalised using 9.16% prorated annual capitalisation rate (30 September
2021 GBP0.2m, 3.5%).
12 Intangible assets
Six months to Six months to Year to
30 September 2022 30 September 2021 31 March 2022
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Net book value, beginning of period 12.7 13.3 13.3
Additions 2.3 1.4 3.4
Disposal - - (0.1)
Amortisation charge for the period (1.7) (1.9) (3.9)
Net book value, end of period 13.3 12.8 12.7
==================== =================== ===============
13 Retirement benefits
Pension arrangements for employees have historically been provided through the Company's membership
of the Water Companies' Pension Scheme (WCPS), which provides defined benefits based on final
pensionable pay. The Company's membership of WCPS is through a separate section of the scheme.
On 7 June 2018 the Trustee of the Bristol Water Section of the WCPS purchased a bulk annuity
policy to insure the benefits for the members in the section. Following this, the method for
valuing the liabilities of the pension scheme has remained the same. However, the scheme asset,
in the form of the insurance policy, now matches the value of the liabilities.
The gross pension surplus of GBP12.4m at 30 September 2022 (30 September 2021 GBP12.9m) relates
to the market value of assets still held by the scheme, and is stated after including a GBP0.7m
estimation of the liability arising to adjust certain scheme benefits to compensate for the
effect of unequal Guaranteed Minimum Pensions for men and women.
Looking ahead, we expect the insurer will take over responsibility for the payment and administration
of member benefits. Once this has happened members will no longer be members of the Section,
instead they will have individual policies with the insurer. At this point the Section will
be wound up.
In summary, assets and liabilities under IAS 19 were:
At At At
30 September 2022 30 September 2021 31 March 2022
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Fair value of section assets 123.7 191.2 161.2
Present value of liabilities (111.3) (178.3) (148.8)
==================== =================== ===============
Surplus in the section 12.4 12.9 12.4
Less: restriction of surplus (4.4) (4.5) (4.3)
Net pension asset on IAS 19 basis 8.0 8.4 8.1
==================== =================== ===============
14 Leases
a) Amounts recognised in the Statement of Financial Position
The Statement of Financial Position shows the following amounts relating to leases:
At At At
30 September 2022 30 September 2021 31 March 2022
(unaudited) (unaudited) (audited)
(restated)
GBPm GBPm GBPm
Included in Property, Plant and Equipment
Cost 14.0 14.4 14.0
Accumulated depreciation (12.3) (12.2) (12.0)
======================= =================== ================
1.7 2.2 2.0
Included in Intangible assets
Cost 1.3 1.3 1.3
Accumulated depreciation (1.3) (1.3) (1.3)
======================= =================== ================
- - -
14 Leases (continued)
b) Amounts recognised in the income statement
The Income Statement shows the following amounts relating to leases:
At At At
30 September 2022 30 September 2021 31 March 2022
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Depreciation charge relating to assets under leases 0.2 0.2 0.4
Interest expense (included in finance cost) - - 0.1
Expense relating to short-term leases (included in
administrative expenses) - - 0.1
15 Net borrowings
At At At
30 September 2022 30 September 2021 31 March 2022
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Net borrowings comprise -
Borrowings and derivatives due after one year 413.5 382.4 399.7
Lease liabilities due after one year 0.9 1.3 1.1
Borrowing and derivatives due under one year - 9.0 -
Current portion of lease liabilities 0.4 0.4 0.4
414.8 393.1 401.2
Cash and cash equivalents (14.3) (14.8) (12.0)
==================== =================== ===============
Net borrowings excluding 8.75% irredeemable
cumulative
preference shares 400.5 378.3 389.2
8.75% irredeemable cumulative preference shares 12.5 12.5 12.5
Net borrowings 413.0 390.8 401.7
==================== =================== ===============
Borrowing facilities
At the period end the Company had unutilised borrowing facilities of GBP26.0m.
Fair value of financial assets and liabilities measured at amortised cost .
The fair value of borrowings are as follows:
Six months to Six months to Year to
30 September 2022 30 September 2021 31 March 2022
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Non-current 487.4 551.1 551.3
Current 6.2 9.3 0.4
======================== ======================= ==================
493.6 560.4 551.7
======================== ======================= ==================
16 Commitments and contingent liabilities
Capital commitments at 30 September 2022 contracted for but
not provided were GBP3.4m (2021: GBP4.6m).
17 Ultimate parent company and controlling party
The immediate parent company for this entity is Bristol Water
Core Holdings Limited, a company incorporated in England and
Wales.
As at 31 March 2022, the Directors considered the ultimate parent
and controlling party of the Company to be
Pennon Group plc.
The smallest and largest group in which the Company is consolidated
is Pennon Group plc which is registered in England and copies
of its consolidated interim report are available from Peninsula
House, Rydon Lane, Exeter, Devon, England, EX2 7HR.
18 Related party transactions
During the six months to 30 September 2022 the Company spent
GBP1.4m (2021: GBP1.6m) on the purchase of customer related
services from BWBSL, a joint venture company between Bristol
Water Holdings Limited and Wessex Water Services Limited. At
30 September 2022 GBP0.6m (2021: GBP1.2m) was receivable from
BWBSL and GBP1.7m (2021: GBP1.4m) was payable to BWBSL.
During the six months to 30 September 2022 the Company recognised
sales of GBP8.9m (2021 GBP6.4m) to Water 2 Business Limited
(W2B), an associate company within the BWHUK group of companies.
At 30 September 2022 GBP1.5m (2021: GBP1.4m) was receivable
from W2B primarily in respect of water supply charges.
On 3 June 2021, following the acquisition by Pennon Group plc,
Pennon Water Services Limited ("PWS") became a related party
of the Company. During the six months to 30 September 2022 the
Company recognised sales of GBP0.5m, (for the period from 3
June 2021 to 30 September 2021 GBP0.3m to PWS). At 30 September
2022 GBP0.1m (2021: GBP0.1m) was receivable from PWS primarily
in respect of water supply charges.
19 Events after the end of the reporting period
On 17 October 2022 the Company gave notice of redemption of
the GBP40m bonds due to be repaid in March 2041, the carrying
value of the bonds at 30 September 2022 was GBP58.3 million.
The bonds were redeemed on 17 November 2022 for GBP72.3 million,
the difference arising on early settlement will be charged to
non-underlying interest in the second half of the financial
year. The repayment was funded by a related party loan from
Pennon Group plc.
On 14 November 2022, the Group offered an extension of its WaterShare+
scheme to Bristol Water plc customers whereby customers could
choose to accept a credit on their bill or take shares in Pennon
Group plc. The value of the rebate equates to GBP13 per customer
and the total value of c.GBP7 million will be recognised in
full as a non-underlying reduction to revenue during H2 2022/23.
20 Circulation
This interim announcement is available on the Bristol Water
web site: http://www.bristolwater.co.uk . Paper copies are also
available from the Company's registered office at Bridgwater
Road, Bristol, BS13 7AT.
DIRECTORS' RESPONSIBILITIES FOR THE PREPARATION OF INTERIM
ACCOUNTS
The directors' confirm that these condensed interim financial
statements have been prepared in accordance with FRS104 'Interim
Financial Reporting', and that the interim management report
includes a fair review of the information required by DTR 4.2.7 and
DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the first six months and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
-- material related-party transactions in the first six months
and any material changes in the related-party transactions
described in the last annual report.
The directors of Bristol Water Plc are listed in the Bristol
Water Plc Annual Report for 31 March 2022. A list of current
directors is maintained on the Bristol Water plc website:
www.bristolwater.co.uk
Going concern
The directors have a reasonable expectation that the Company has
adequate resources available to it to continue in operational
existence for the foreseeable future and have therefore continued
to adopt the going concern policy in preparing the interim
accounts. This conclusion is based upon, amongst other matters, a
review of the Company's financial projections together with a
review of the GBP14.3m cash and GBP26.0m unutilised committed
borrowing facilities available to the Company as well as
consideration of the Company's capital adequacy.
By order of the Board
P Boote
Chief Financial Officer
29 November 2022
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END
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