The Board of Anglian Water, in conjunction with its pension fund-backed shareholders (First State Investments, Canada Pension Plan Investment Board, IFM Investors, Dalmore Capital and GLIL Infrastructure), is announcing a series of financial and corporate initiatives to improve transparency, trust and customer confidence.
The commitments respond to recent challenges from the Regulator and Government, and build on work with Ofwat to address the sector’s long term resilience.
Anglian Water is already reporting industry leading performance on leakage, and, at the last price review, delivered the biggest reduction in average bills at twice the industry average. However, the Board and Anglian Water’s shareholders have resolved to redouble their efforts to ensure it is making the right choices for current and future customers, and the environment.
These commitments build on the £5billion the company has already pledged to invest in the current regulatory period (between 2015 and 2020), which is being used to support sustainable growth across the east of England – the region with the fastest population growth outside London, and the lowest rainfall in the UK.
The moves underpin the company’s reputation as a responsible business, as it prepares to submit its business plan to the Regulator for 2020-2025 later this year.
Anglian Water will:
Improve transparency and clarity of its financial structures
- It will significantly speed up the removal of its Cayman Islands subsidiary
- It will repay an inter-company loan to simplify the presentation of its accounts (particularly around real dividends), aiming to complete this by the end of this Financial Year
Place public interest at the heart of the business
- It will work with Ofwat on proposals to ensure it can be held to account for acting in the public interest
- It will change the composition of the Anglian Water Services Board so that Independent Non-Executive Directors are in the majority, and not just the largest group
Make an additional investment commitment to 2020
- It will invest an extra £65m in resilience schemes not included in the company’s original plan, by 2020. This will improve the region’s ability to deal with drought and flooding and will be paid for through a reduction in dividends to shareholders.
Reduce dividends and borrowings through to 2025
- It will reduce dividends through to 2025, resulting in a significant reduction in the company’s level of debt and gearing
Peter Simpson, Anglian Water Group Chief Executive, said:
“I thank our investors, who represent funds which support the pensions millions of people, for supporting the initiatives we are announcing today. We already hold ourselves to the highest standards of accountability and transparency, but we must acknowledge when there is public concern and act accordingly.
“I believe the actions we are taking are another significant step forward for Anglian Water, working with our regulators and government to achieve the right balance for all our stakeholders. They will help us continue to serve our region responsibly, tackling the challenge of delivering for our current and future customers, whilst also addressing the longer term issues of climate change, population growth, and the maintenance of a flourishing environment.
“This is the next chapter to add to our solid track record of anticipating and responding to challenge. We are proud that, since the introduction of our Love Every Drop strategy in 2011, we have made terrific steps forward in operational performance, customer service and environmental stewardship. This culminated in being named Business in the Community’s Responsible Business of the Year in 2017, but we recognise that further changes will help to strengthen trust and confidence in the water industry. We want to be at the forefront of this.”