Final Results

RNS Number:3115Y
Welsh Water Utilities Finance PLC
14 June 2007



                             NEWS FROM WELSH WATER

                Financial Results for the year to 31 March 2007


                                  14 June 2007


        Welsh Water customers benefit from increased 'customer dividend'


Welsh Water has today published its results for the year to 31 March 2007,
reporting strong financial performance and an increased 'customer dividend' of
#20 this year.

Welsh Water has been owned by Glas Cymru since May 2001 and has the single
purpose of delivering better value services to its customers. Glas Cymru is
unique amongst UK utility companies in that it has no shareholders and so is
able to reinvest all financial surpluses for the benefit of Welsh Water's
customers. Welsh Water has completed the second year of its five year (2005-10)
#1.3 billion investment programme to improve customer service, environmental
quality and drinking water quality - equivalent to an investment of some #1,000
for every Welsh Water household customer.

Highlights for the year include:

   * Increased 'customer dividend' of #20.
   * Opening of a new 'Operational Activity Centre' to improve customer
     service.
   * #35 million wastewater treatment works opened in Holyhead and a Blue
     Flag awarded to Holyhead Marina for the first time.
   * Moody's corporate credit rating upgrade to A3.
   * 100% bacteriological water quality compliance at water treatment works
     for the first time.
   * Leakage target met and no water restrictions last summer.

    Tackling problems of sewer flooding and pollution incidents are a priority
    and over the next two years Welsh Water intends to invest in sewer network
    improvement schemes to reduce the risk of flooding to some 800 properties.
    An enhanced customer care package, 'Flood Care', has recently been
    introduced by the Company to assist those customers who suffer flooding from
    sewers.

Commenting on the performance and financial results, Glas Cymru Chairman Lord
Burns said, "A strong financial performance has allowed us once again to
increase our 'customer dividend' to #20 - which will bring the total over five
years to nearly #100 million. I am pleased with our progress this year and,
whilst there is still much to be done, we are continuing to deliver improved
services for our customers. The staff at Welsh Water and our contract partners
remain committed to carrying out these improvements efficiently for our
customers in the years ahead."

The results in detail:

Increased customer benefits:

   * Increased 'customer dividend' of #20 per customer, totalling some #27
     million - Welsh Water is the only water company to give such an annual
     'customer dividend'.
   * This latest dividend will bring the total 'customer dividends' to nearly
     #100 million since Glas Cymru introduced them in 2003.
   * A new 'Operational Activity Centre' opened in Cardiff, dealing with all
     operational calls from customers - around 25,000 calls a month, to improve
     efficiency and customer service.
   * Independent opinion research shows that 84% of customers are either
     satisfied or very satisfied with Welsh Water's overall service.

Capital investment work for customers:

* #35 million wastewater treatment works opened in Holyhead and a Blue
  Flag awarded to Holyhead Marina for the first time.

* Completion of 3,000 kilometres of water mains refurbishment between
  2000 and 2007 at a cost of over #260 million - equivalent to the distance
  between Wales and Turkey.

* Schemes to reduce the risk of repeat flooding from sewers for over 110
  properties.

* #3 million investment scheme carried out at Crosshands wastewater
  treatment works, increasing its capacity in order to support economic
  development in the area.

* Improvements to 9 wastewater treatment works and 87 intermittent sewer
  discharges to meet tighter environmental standards.

Strong financial performance:

* Net debt reduced to 74% of Regulatory Capital Value (RCV) as
  compared to some 93% on the acquisition of Welsh Water in May 2001.

* Moody's credit rating change - corporate family rating upgrade to
  A3, reflecting improved credit quality for investors.

* Profit after tax of #33 million (2006: #16 million), which will be
  retained in the business for the benefit of customers.

* Operating costs (excluding infrastructure renewals expenditure,
  depreciation and amortisation) increased to #229 million (2006: #213
  million) reflecting, in particular, increases in energy costs of #8
  million.

* Capital expenditure of #269 million (2006: #238 million) will bring
  improvements to customer service, environmental quality and drinking
  water quality.

Improvements in operational performance:

* 100% bacteriological water quality compliance at water treatment
  works, the first time this has been achieved by the Company.

* Leakage reduction target achieved, with some 50 bursts and leaks
  repaired every day.

* A record number of 49 Blue Flag beaches and marinas in Wales, around
  a third of the UK total, demonstrating excellent bathing water quality
  at these beaches.

* No water restrictions in 2006-07, despite summer rainfall being only
  60% of the long-term average.

    Ends

For further information contact the Welsh Water press office on 02920 556140.

Notes for editors:

 1. Glas Cymru was formed in April 2000 for the sole purpose of acquiring Welsh
    Water. It is a 'company limited by guarantee' registered under the Companies
    Act 1985. Glas Cymru has no shareholders. Instead, Members carry out an
    important corporate governance role but they do not receive dividends nor do
    they have any other financial interest in the Company. This corporate
    structure ensures that all financial surpluses generated are retained and
    reinvested for the benefit of Welsh Water and its customers.
 2. Glas Cymru's constitution strictly limits its purpose to that of financing
    water assets in Welsh Water's area of appointment and managing Welsh Water's
    business so that high quality water and sewerage services are delivered at
    least cost to the communities served by Welsh Water. Glas Cymru cannot
    diversify into other unrelated commercial activities.
 3. Dwr Cymru Welsh Water outsources the provision of operational and customer
    services and the delivery of its investment programme. Working closely in a
    partnership framework with industry specialists delivers constantly
    improving business performance and benefits customers.




                      This information is provided by RNS
            The company news service from the London Stock Exchange

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