AGM Statement

RNS Number:7223N
East Surrey Holdings PLC
18 July 2003



                            East Surrey Holdings PLC

                            CHAIRMAN'S AGM STATEMENT


Speaking at the Annual General Meeting held today of East Surrey Holdings plc,
("East Surrey"), the water and gas utility company, Pat Barrett, Chairman made
the following statement.


" At the time of our preliminary results announcement, we reported that East
Surrey was in excellent health. In giving an update on current trading, I am
delighted to report that this remains the case and that the Group is continuing
to make steady progress.


" The overall financial performance that we reported last year was good. Our
main objective remains to continue to reward our shareholders with the long-term
growth in the dividend payment, especially once Phoenix Natural Gas has started
to generate cash. Towards the end of last year, Phoenix started to report
profits. We have high hopes for the continued development of the business.


" Sutton and East Surrey Water has continued to perform well. We have continued
to achieve our leakage targets and that we have met the exacting standards for
our water quality. We are preparing our draft business plan for submission to
the Regulator in mid-August. Whilst there are some challenging issues, we look
forward to a constructive discussion with the Regulator in the coming months.


" Progress at Phoenix Natural Gas in Northern Ireland continues to gather
momentum. We are encouraged that the number of connections being made is at
expected levels. During the six months to 30 June 2003, 7,740 new connections
have been made, bringing the total number of properties connected to 59,097.


" ESP our independent gas transportation company is also making encouraging
progress. The business is continuing to win projects but we still await Ofgem's
final consultation document on prices before we can assess its full potential.


" Looking to the future, the financial position of the Group remains strong. I
look forward to the future with confidence that our strategy will continue to
prove successful."


                                     -ends-


Date: 18 July 2003

For further information contact:

East Surrey Holdings plc                                    City Profile

Phil Holder, Managing Director                              Simon Courtenay

Nick Fisher, Finance Director                               Tel: [phone]

Tel: [phone]

Web: www.waterplc.com



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