Anglian Water to cut dividend payments to improve ‘trust and customer confidence’
- Credit: Archant
Anglian Water Group (AWG) has unveiled a series of financial and structural initiatives which it says are designed “to improve transparency, trust and customer confidence”.
AWG, whose regulated business, Anglian Water Services, delivers water and sewerage services to around 6m customers across the eastern region, says the plans are a response to challenges from industry regulator Ofwat and the Government.
They come as the group prepares to submit its business plan to Ofwat later this year for the next five-year regulatory period, running up to 2025, and include additional investment in “resilience” during the current term, ending in 2020. AWG says that it will:
•Work with Ofwat on proposals to ensure it can be held to account for acting in the public interest;
•Change the composition of the board of Anglian Water Services so that independent non-executive directors are in the majority, and not just the largest group;
•Invest an extra £65m by 2020 (in addition to the £5bn it has already pledged to invest in the current regulatory period) to improve the region’s ability to deal with drought and flooding; and
•Reduce dividends and borrowings through to 2025, resulting in a “significant” reduction in the company’s level of debt and gearing, while continuing to meet its investment commitments.
- 1 Revealed: The most popular Suffolk fish and chip shop
- 2 What time will the Red Arrows be flying over Suffolk this weekend?
- 3 London couple transform Suffolk home into an 'intimate' lifestyle retreat
- 4 Suffolk woman stole thousands from football club and school
- 5 Forbidden Suffolk: 5 more places you can’t visit in Suffolk
- 6 Two motorbikes stolen after break-in at Suffolk home
- 7 Former Town striker's front-to-back season could end in Wembley glory
- 8 Inquest opened into human remains found by Suffolk river
- 9 Village suffers power cut for 7 hours after vehicle hits electricity pole
- 10 Man claims supermarket fuel was contaminated as he reveals £200 repair bill
Peter Simpson, Anglian Water Group chief executive, said the initiatives were a response the general discussion currently surrounding the water industry, including calls for renationalisation amid suggestions that some companies are paying excessive dividends.
Anglian Water, however, had a strong record in terms of bringing bills down and, during the current regulatory regime, would be reinvesting some £300m, representing dividends foregone by its shareholders.
“Last year we were recognised by Business in the Community as its Responsible Business of the Year,” he added. “We think that gives us a responsibility to lead by example and, with these initiatives, we want to set the agenda for the industry.
“Our shareholders are long-term investors and recognise that this is important to its future. We hope these changes will put us in a positive position.”
AWG is owned by a consortium of investors including Colonial First State Global Asset Management (32.3%), the Canada Pension Plan Investment Board (32.9%), IFM Investors (19.8%) and Camulodunum (15%), itself a consortium comprising Dalmore Capital and GLIL Infrastructure which acquired a stake previously owned by 3i earlier this month.
AWG also says that it will improve the “transparency and clarity” of its financial structures, by accelerating plans to close a dormant subsidiary in the Cayman islands and by repaying an inter-company loan by the end of this financial year.
However, it says that it has never derived any tax advantage from the Cayman Islands subsidiary, which was set up in 2002 to assist a restructuring process but has always been registered in the UK for tax purposes.