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| Name | Symbol | Market | Type |
|---|---|---|---|
| Bristol Wtr.8t% | LSE:BWRA | London | Preference Share |
| Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 130.00 | 127.00 | 133.00 | 130.00 | 129.50 | 129.50 | 55 | 08:00:26 |
From Nov 2022 to Nov 2024
TIDMBWRA
RNS Number : 2589B
Bristol Water PLC
01 June 2023
Announcement of unaudited preliminary financial results for the year ended 31 March 2023
Bristol Water plc (the "Company") announces its unaudited results for the twelve months ending 31 March 2023.
The Company's interim financial results are set out below and can also be accessed via the Company's website.
FINANCIAL PERFORMANCE
Hot Features
Premium
2022/23 2021/22
(10 months (12 months trading)
trading)
restated
Revenue GBP109.0m GBP125.5m
Underlying revenue(1,2) GBP115.6m GBP125.5m
Underlying (loss)/profit before (GBP3.8m) GBP15.1m
tax(1)
Non-underlying items before (GBP20.9m) (GBP0.1m)
tax [1]
(Loss)/profit before tax (GBP24.7m) GBP15.0m
Earnings per share
Statutory loss per share (336.7p) (175.0p)
Highlights
-- The full year results include the 10 months trading of Bristol Water plc as a statutory water undertaker, to the point of the statutory transfer which transferred its licence, trading, assets and liabilities to South West Water Limited on 1(st) February 2023. All comparators are for 12 months of trading.
-- Post the statutory transfer, no transactions were recognised in the income statement except for those relating to the remaining preference shares, debentures and pension asset. Going forward remaining obligations relating to these will be met from matching intra-group contracted assets and related receipts.
-- GBP115.6 million underlying Revenue - reduction reflecting 2 months fewer of trading, offset by increased tariffs in line with the regulatory mechanism.
-- GBP3.8 million underlying loss before tax - reduction reflecting the near-term pressures on earnings from inflation driven power pricing and financing costs.
-- Significant net non-underlying reduction in profits - delivering on our WaterShare+ commitments and cost resulting from the statutory transfer to South West Water Limited, including bond redemption costs and legal costs.
-- Statutory loss per share of 336.7 pence includes significant non-underlying items. Statutory loss per share for 2021/22 was impacted by the significant non-underlying deferred tax charge in respect of the change in corporation tax rate.
For further information, please contact:
Paul Boote Group Chief Financial Officer 01392 443 168 Jennifer Cooke Group Head of Investor Relations James Murgatroyd Harry Worthington FGS Global 020 7251 3801
PERFORMANCE REPORT
On 1 February 2023, the merger of South West Water and Bristol Water completed with Bristol Water's operating licence transferring to South West Water Limited ('SWW'). As part of the transfer scheme, the trade and majority of assets and liabilities of Bristol Water plc ('BW') were transferred to SWW. SWW will continue to operate under the Bristol Water name in the area Bristol Water serves. From this date, the operating activities of BW ceased with only residual preference shares, debt and the pension surplus remaining in the company. Any commitments under these instruments are fully supported by interest bearing loans receivable from SWW. As a result of the above, the financial performance included in this announcement relates to 10 months of trade up to the point of the statutory transfer.
Revenue reduced in the year reflecting 2 months fewer of trading, offset by increased tariffs in line with the regulatory mechanism. Household demand continues to reduce as the number of people working from home after COVID-19 continues to reduce, and as a result Non-household demand continues to recover towards pre-COVID-19 levels.
Significant levels of inflation in the year resulted in a number of costs increasing markedly. Power prices increased significantly in the year, and while we were hedged to a high level in the first half of the year the second half resulted in cost around 50% higher than previous year. Chemicals prices also increased by around the same proportion (including secondary power increase effects).
In addition the very warm summer led to increased usage of the northern area of our supply region's resources, which require more power and chemical consumption, in order to maintain resilience to our supply.
As a result of the high levels of inflation over the last two years, our indexation costs remained high.
A number of non-underlying items have been incurred this year as a result of the statutory transfer. Customers were able to take advantage of the WaterShare+ scheme which led to GBP6.6 million being returned to customers as a bill credit or shares, and our index linked bond was redeemed resulting in a loss of GBP13.1 million.
BRISTOL WATER PLC
UNAUDITED PRELIMINARY FINANCIAL STATEMENTS
FOR THE YEARED 31 MARCH 2023
INCOME STATEMENT (UNAUDITED)
for the year ended 31 March 2023
2023 2022
Restated
(note 4)
Notes GBPm GBPm
Revenue before non underlying items 5 115.6 125.5
Non underlying revenue 5 (6.6) -
--------- ----------
Total revenue 109.0 125.5
Operating costs excluding impairment losses on trade receivables 6 (84.6) (88.8)
Impairment losses on trade receivables 6 (3.5) (2.7)
Operating costs before non underlying items (88.1) (91.5)
Non underlying operating costs 6 (1.2) (0.1)
Total net operating costs 6 (89.3) (91.6)
Operating profit 19.7 33.9
Interest payable and similar charges before non underlying items 7 (34.0) (22.8)
Interest receivable and similar charges before non underlying items 7 2.7 3.9
Non underlying interest payable and similar charges 7 (13.1) -
Total net interest payable and similar charges 7 (44.4) (18.9)
--------- ----------
(Loss) / profit before tax (24.7) 15.0
Taxation on profit on ordinary activities 8 4.5 (25.5)
Loss for the financial year (20.2) (10.5)
--------- ----------
Loss per ordinary share 9 (336.7)p (175.0)p
--------- ----------
Substantially all of the Company's operations were discontinued in the year.
STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
for the year ended 31 March 2023
2023 2022
Restated
(note 4)
Notes GBPm GBPm
Loss for the financial year (20.2) (10.5)
Other comprehensive income/(loss):
Items that will not be reclassified to profit and loss
Actuarial loss on retirement benefit surplus 0.5 (1.0)
Remeasurement of defined benefit pension scheme restriction 8 (0.1) 0.4
Other comprehensive income/(loss) for the year, net of tax 0.4 (0.6)
------- ----------
Total comprehensive loss for the year (19.8) (11.1)
------- ----------
STATEMENT OF FINANCIAL POSITION (UNAUDITED)
at 31 March 2023
2023 2022
Restated
(note 4)
Notes GBPm GBPm
Non-current assets
Property, plant and equipment - 696.6
Intangible assets - 12.7
Other investments - Loans to group
undertakings - 61.1
Other receivables 26.6 -
Retirement benefit surplus 8.2 8.1
------- ----------
34.8 778.5
------- ----------
Current assets
Inventory - 1.9
Trade and other receivables 10 144.5 29.5
Current tax asset 10 0.7 -
Cash and cash equivalents 0.1 12.0
------- ----------
145.3 43.4
------- ----------
Total assets 180.1 821.9
------- ----------
Non-current liabilities
Lease liabilities - (1.1)
Deferred income tax liabilities - (99.6)
Borrowings and derivatives 11 (1.6) (399.7)
8.75% irredeemable cumulative
preference shares 11 (12.5) (12.5)
Deferred income - (18.5)
Government grants - (0.3)
(14.1) (531.7)
------- ----------
Current liabilities
Lease liabilities - (0.4)
Current portion of deferred income - (2.7)
Trade and other payables (0.9) (36.7)
Current tax liability - (1.3)
(0.9) (41.1)
Total liabilities (15.0) (572.8)
------- ----------
Net assets 165.1 249.1
------- ----------
Equity
Called-up share capital 6.0 6.0
Share premium account 4.4 4.4
Other reserves 5.8 5.8
Retained earnings 148.9 232.9
Total Equity 165.1 249.1
------- ----------
STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
For the year ended 31 March 2023
Called up share Share premium Capital redemption Retained earnings Total
capital account reserve
GBPm GBPm GBPm GBPm GBPm
Balance at 1 April 2021
(as restated) (note 4) 6.0 4.4 5.8 252.8 269.0
------------------- -------------- ------------------- ------------------ ---------
Loss for the year (as
restated) - - - (10.5) (10.5)
Other comprehensive loss
for the year:
Actuarial loss
recognised in respect
of
retirement benefit
obligations - - - (1.0) (1.0)
Remeasurement of
defined benefit
pension scheme - - - 0.4 0.4
Total comprehensive
loss for the year - - - (11.1) (11.1)
------------------- -------------- ------------------- ------------------ ---------
Ordinary dividends - - - (8.9) (8.9)
Share based payments 0.1 0.1
Balance as at 31 March
2022 (restated) (note
4) 6.0 4.4 5.8 232.9 249.1
------------------- -------------- ------------------- ------------------ ---------
Balance as at 1 April
2022 (restated) (note
4) 6.0 4.4 5.8 232.9 249.1
------------------- -------------- ------------------- ------------------ ---------
Loss for the year - - - (20.2) (20.2)
Other comprehensive
income for the year:
Actuarial profit
recognised in respect
of
retirement benefit
obligations - - - 0.5 0.5
Remeasurement of
defined benefit
pension scheme - - - (0.1) (0.1)
Total comprehensive
loss for the year - - - (19.8) (19.8)
------------------- -------------- ------------------- ------------------ ---------
Ordinary dividends - - - (64.3) (64.3)
Share based payments - - - 0.1 0.1
Balance as at 31 March
2023 6.0 4.4 5.8 148.9 165.1
------------------- -------------- ------------------- ------------------ ---------
The Board has not proposed a final dividend in respect of the financial year 2022/23 (2022: GBPnil).
CASH FLOW STATEMENT (UNAUDITED)
For the year ended 31 March 2023
2023 2022
Restated
(note 4)
Notes GBPm GBPm
Cash flows from operating activities
(Loss)/profit before taxation (24.7) 15.0
Adjustments for:
Share based payments 0.1 0.1
Deferred income amortisation (3.3) (3.2)
Depreciation 6 21.4 25.0
Amortisation of intangibles 6 2.9 3.9
Difference between pension charges and
contributions paid 0.6 0.9
Loss / (profit) on disposal of assets 6 0.1 (0.1)
Interest income 7 (2.4) (3.6)
Interest expense 7 47.1 22.8
Pension interest income 7 (0.3) (0.3)
(Increase) in inventory (0.5) (0.2)
Decrease/(increase) in trade and other receivables 0.5 (1.3)
Increase/(decrease) in trade and other creditors and provisions 9.5 (0.7)
Cash generated from operations 51.0 58.3
Interest paid (21.4) (12.4)
Corporation taxes paid (1.6) (1.9)
Contributions received 2.8 2.1
Net cash generated from operating activities 30.8 46.1
------- ----------
Cash flows from investing activities
Purchase of property, plant and equipment and intangibles (40.7) (40.4)
Proceeds from sale of fixed assets - 0.2
Interest received 7 2.4 3.6
Repayment of intercompany loan receivable 61.1 -
Disposal of trade and assets 15 (5.1) -
------- ----------
Net cash used in investing activities 17.7 (36.6)
------- ----------
Cash flows from financing activities
Proceeds from loans and borrowings 81.1 11.0
Repayment of loans and borrowings (75.8) (9.0)
Payment of lease liabilities (0.3) (0.4)
Preference dividends paid 7 (1.1) (1.1)
Equity dividends paid (64.3) (8.9)
Net cash used in financing activities (60.4) (8.4)
------- ----------
Net (decrease)/increase in cash and cash equivalents (11.9) 1.1
Cash and cash equivalents, beginning of year 12.0 10.9
Cash and cash equivalents, end of year 0.1 12.0
======= ==========
Substantially all of the Company's operations were discontinued in the year.
NOTES TO THE FINANCIAL STATEMENTS
1 General information
Bristol Water plc is a public company, limited by shares, with
irredeemable preference shares and debenture stock listed on
the London Stock Exchange.
The Company is incorporated and domiciled in England, United
Kingdom. The address of its registered office is Bridgwater Road,
Bristol, BS13 7AT, England.
2 Basis of preparation
The unaudited financial statements of the Company are prepared
on a historical cost basis, except for financial assets and financial
liabilities (including derivative instruments) measured at fair
value and in accordance with UK adopted international financial
reporting standards (IFRS) in conformity with the requirements
of the Companies Act 2006.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process
of applying the Company's accounting policies.
New and amended standards adopted by the Company
The Company has applied the following amendments for the first
time for their annual reporting period commencing 31 March 2023:
-- Property, Plant and Equipment: Proceeds before Intended Use
- Amendments to IAS 16; and
-- Annual Improvements to IFRS Standards 2018-2020.
The amendments listed above did not have any impact on the amounts
recognised in prior periods and are not expected to significantly
affect the current or future periods.
New standards and interpretations not yet adopted
Certain new accounting standards, amendments to accounting standards
and interpretations have been published that are not mandatory
for 31 March 2023 reporting periods and have not been early adopted
by the Company. These standards, amendments or interpretations
are not expected to have a material impact on the entity in the
current or future reporting periods and on foreseeable future
transactions.
3 Going concern
The Company's licence, trade, assets and obligations were transferred
to South West Water Limited as a going concern on 1 February
2023, the consideration being the net asset carrying value of
GBP171.1m settled via an intercompany debtor. Post the statutory
transfer, no transactions were recognised in the income statement
except for those relating to the remaining preference shares,
debentures, pension asset and intercompany loans. Going forward
remaining obligations relating to these will be met from matching
intra-group contracted assets and related receipts. The Company
has received confirmation from Pennon Group plc that it will
provide support to the Company should it be required, to meet
its liabilities as they fall due for the foreseeable future.
As a result, the Directors have concluded that the Company has
adequate resources, or the reasonable expectation of raising
further resources as required, to continue in operational existence
for the foreseeable future. The Company therefore continues to
adopt the going concern basis in preparing its financial statements.
4 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 31 March Change 31 March
2021 2021 2022 2022
as originally restated as originally restated
presented (unaudited presented (unaudited
) )
Note GBPm GBPm GBPm GBPm GBPm GBPm
Non-current assets
Property, plant
and equipment 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 B 5.9 (5.9) - 7.9 (7.9) -
Retirement benefit
surplus 9.1 - 9.1 8.1 - 8.1
--------------- ------- ------------ --------------- ------- ------------
772.3 (5.9) 766.4 786.4 (7.9) 778.5
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 (5.9) 808.6 829.8 (7.9) 821.9
--------------- ------- ------------ --------------- ------- ------------
Non-current liabilities
Lease liabilities (1.5) (1.5) (1.1) - (1.1)
Deferred tax liabilities B (72.3) (6.3) (78.6) (93.2) (6.4) (99.6)
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 A (82.9) 63.3 (19.6) (83.0) 64.5 (18.5)
Government grants (0.3) - (0.3) (0.3) - (0.3)
--------------- ------- ------------ --------------- ------- ------------
(548.7) 57.0 (491.7) (589.8) 58.1 (531.7)
--------------- ------- ------------ --------------- ------- ------------
Current liabilities
Lease liabilities (0.4) - (0.4) (0.4) - (0.4)
Borrowings and
derivatives (9.0) - (9.0) - - -
Deferred income A (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) 56.1 (539.6) (630.1) 57.3 (572.8)
--------------- ------- ------------ --------------- ------- ------------
Net assets 218.8 50.2 269.0 199.7 49.4 249.1
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 202.6 50.2 252.8 183.5 49.4 232.9
Total Equity 218.8 50.2 269.0 199.7 49.4 249.1
--------------- ------- ------------ --------------- ------- ------------
The impact of the above adjustments includes the correction of a presentational error whereby deferred tax assets should have been offset against deferred tax liabilities in line with IAS 12.
4 Change in accounting policies (continued)
Reconciliation of total comprehensive income for the year ended 31 March 2022
Year to Change Year to
31 March 2022 31 March 2022
as originally presented restated
(unaudited)
Note GBPm GBPm GBPm
Revenue A 124.2 1.3 125.5
Total operating costs (91.6) - (91.6)
------------------------- ------- ---------------
Operating profit 32.6 1.3 33.9
Net interest payable and similar charges (18.9) - (18.9)
Profit on ordinary activities before taxation 13.7 1.3 15.0
Taxation on profit on ordinary activities B (23.4) (2.1) (25.5)
Loss for the year (9.7) (0.8) (10.5)
------------------------- ------- ---------------
Other comprehensive loss for the year, net of tax (0.6) - (0.6)
Total comprehensive loss for the year (10.3) (0.8) (11.1)
------------------------- ------- ---------------
Notes to the reconciliation of equity as at 1 April 2021 and 31 March
2022 and total comprehensive loss 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 as follows.
A 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) cumulative
additional revenue has been recognised.
Revenues and profit before tax for the year ended 31 March 2023
was increased by GBP2.0m (31 March 2022, increased by GBP1.3m).
B Taxation
The adjustments per note A leads 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 GBP14.3m
(1 April 2021: GBP12.2m) was recognised, resulting in a reclassification
from assets to liabilities on the balance sheet.
5 REVENUE
2023 2022
GBPm Restated
GBPm
Appointed income
Household - measured 50.0 55.3
Household - unmeasured 36.1 40.9
Non-household - measured 22.2 22.2
Non-household - unmeasured 0.3 0.3
Contributions from developers 3.3 3.2
Third party services 1.8 1.4
Rental income 1.0 1.0
114.7 124.3
Non-appointed income
Recreations 0.5 0.7
Rental income 0.2 0.2
Other 0.2 0.3
---------- ---------------
0.9 1.2
Underlying income 115.6 125.5
---------- ---------------
Non-Underlying income
Watershare + (6.6) -
Total income 109.0 125.5
---------- ---------------
Appointed income is income earned under the Company's licence
to supply water for the period until 1 February 2023 when the
licence was transferred to SWW. Non-appointed income relates
to activities that do not require a water supply licence. All
revenue relates to the trade and assets transferred to SWW.
In the year, the Company offered Pennon Group plc's, its parent
company, WaterShare+ scheme to its customers whereby customers
could choose to accept a credit on their bill or take shares
in Pennon Group plc. The value of the rebate equated to GBP13
per customer and the total value of GBP6.6 million was recognised
in full as a non-underlying reduction to revenue in the year
ended 31 March 2023. This item was non-underlying in nature given
its individual size and its non-recurring nature.
6 OPERATING COSTS
(a) Operating costs include:
2023 2022
Restated
GBPm GBPm
Wages and salaries 19.0 22.2
Social security costs 2.1 2.4
Defined contribution scheme costs 2.2 2.2
Defined benefit scheme costs 0.4 0.9
Share-based payments 0.1 0.1
Total payroll cost 23.8 27.8
Less capitalised as tangible and intangible
assets (9.8) (10.8)
Net staff costs 14.0 17.0
---------- ---------------
Inventory recognised as an expense 4.5 2.8
Depreciation of tangible assets including impairment
On owned assets 21.0 24.5
On leased assets 0.4 0.5
Amortisation of intangible assets
On owned assets 2.9 3.9
Other operating charges
Auditor's remuneration 0.3 0.3
Loss / (profit) on disposal of tangible
assets 0.1 (0.1)
Other charges less recoveries 41.4 39.9
Operating costs excluding impairment losses
on trade receivables 84.6 88.8
Impairment of trade receivables 3.5 2.7
---------- ---------------
Total operating costs before non underlying
items 88.1 91.5
Legal costs 1.0 -
Integration costs 0.2 -
Acquisition costs - 0.1
Total non underlying items in the income statement 1.2 0.1
Total net operating costs 89.3 91.6
On 17 October 2022 the Company gave notice of redemption of the
GBP40m bonds due to be repaid in March 2041. The bonds were redeemed
as part of the statutory transfer of the Company's business to
South West Water. Associated legal costs of cGBP1m were incurred
in relation to the bond redemption. The redemption of the bonds
is non-recurring and of a material value, hence the expense has
been treated as non-underlying.
The Company incurred expenses of GBP0.2m relating to the integration
and statutory transfer of the Company's trade, assets and obligations
to South West Water. These costs are classified as non-underlying
due to their non-recurring nature.
In the year ended 31 March 2022 costs were incurred in relation
to the acquisition of the Company by Pennon Group plc and the
resulting merger review by the Competition and Markets Authority.
6 OPERATING COSTS (continued)
(b) Employee details
The monthly average number of employees by activity, including Directors on a service contract,
(on a full-time equivalents basis) during the year to 31 January 2023 was as follows. From
the 1 February 2023 the Company has nil employees.
2023 2022
No. No.
Water treatment and distribution 215 207
Support services 141 137
Administration 181 182
Non-appointed activities 14 14
----------- -----------
551 540
(c) Directors' emoluments
2023 2022
GBPm GBPm
Aggregate emoluments of Directors, being remuneration, bonus, pension, LTIP and
benefits in
kind 0.7 1.1
-------- --------
0.7 1.1
The highest paid Director during the year was Mr Karam.
(d) Independent auditors' remuneration
During the year the Company obtained the following services from the Company's auditors and
its associates:
2023 2022
GBP'000 GBP'000
Fees payable for the audit of the Company's annual statutory financial statement 274.0 188.0
Fees payable for other services:
services pursuant to legislation, principally assurance and audit of regulatory
accounts and
returns - 45.0
Review of interim financial statements 20.0 31.0
Total non-audit fees 20.0 76.0
7 NET INTEREST PAYABLE AND SIMILAR CHARGES
2023 2022
GBPm GBPm
Interest payable and similar charges relate to:
Bank borrowings 3.7 2.0
Term loans and debentures:
Interest charges 9.4 10.4
Indexation 20.0 9.6
Leases 0.1 0.1
Capitalisation of borrowing cost (0.9) (0.4)
Dividends on 8.75% irredeemable cumulative preference shares 1.1 1.1
Loan from Pennon Group plc 0.6 -
34.0 22.8
Less interest receivable and similar income:
Interest income in respect of retirement benefit scheme (0.3) (0.3)
Interest income on intercompany loans (2.4) (3.6)
(2.7) (3.9)
Total underlying net interest payable and similar charges 31.3 18.9
---------------- -------
Bond redemption costs 13.1 -
Total net interest payable and similar charges 44.4 18.9
Bonds with a carrying value of GBP59.2m were redeemed on 17 November 2022 for GBP72.3 million.
The difference of GBP13.1m arising on early settlement was debited to finance costs in the
year. The redemption of the bonds is non-recurring and of a material value, hence the debit
has been treated as non-underlying.
The rate used to determine the amount of borrowing costs eligible for capitalisation was 8.7%
(2022: 5.0%), 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
IFRS 9.
8 TAXATION
2023 2022
Restated
GBPm GBPm
Tax (income)/expense included in Income Statement
Current tax:
Corporation tax on profits for the year 0.4 1.3
Adjustment to prior years (0.1) 3.3
-------- ------------
Total current tax 0.3 4.6
Deferred tax:
Origination and reversal of timing differences (4.9) 1.6
Adjustment to prior years 0.1 (3.1)
Effect of change in UK corporation tax rate - 22.4
Total deferred tax (4.8) 20.9
Tax (income)/expense on (loss) / profit (4.5) 25.5
-------- ------------
Tax expense/(income) included in other comprehensive income/(loss)
Remeasurement of post-employment benefit liability 0.1 (0.4)
-------- ------------
Total tax expense/(income) included in other comprehensive income/(loss) 0.1 (0.4)
8 TAXATION (continued)
Reconciliation of the tax on profit on ordinary activities
The current tax rate for the year is lower than (2022: higher) the standard rate of tax. A
reconciliation between tax (income)/expense and the product of accounting (loss)/profit multiplied
by UK corporation tax rate is as follows:
2023 2022
GBPm GBPm
(Loss)/Profit before tax (24.7) 15.0
At statutory income tax rate of 19% (2022: 19%) (4.7) 2.9
Adjustment in respect of prior years' current tax 0.1 3.3
Adjustment in respect of prior years' deferred tax (0.1) (3.1)
Non-deductible expenses for tax purposes:
8.75% irredeemable cumulative preference share 0.2 0.2
Non-qualifying asset depreciation 0.1 0.1
Other 0.1 0.1
Capital expenditure tax depreciation super deduction allowances (0.2) (0.4)
-------- ----------
(4.5) 3.1
Effective tax rate before change in UK corporation tax rate 18.2% 20.7%
Effect of tax rate change on opening balances - 22.4
Total taxation expense included in income statement (4.5) 25.5
Effective tax rate after change in UK corporation tax rate 18.2% 170.0%
From 1 April 2021 to 31 March 2023, a "super-deduction" on qualifying plant and machinery
equivalent to 130% of spend on expenditure relating to contracts entered into after 3 March
2021 is available in respect of qualifying expenditure. The Company incurs significant capital
expenditure each year as it maintains and enhances its assets for the benefit of its customers,
communities and the environment. The first year allowance on certain other types of assets,
including long-life was boosted to 50% for the same period, again for contracts entered into
after 3 March 2021. These enhanced allowances have increased capital allowance claims for
the year and hence reduced the current tax charge for the year ended 31 March 2022. The tax
credit was increased for the year ended 31 March 2023 for the same reason. There is also a
consequently higher deferred tax liability and charge due to the additional capital allowance
deductions.
9 LOSS PER ORDINARY SHARE
2023 2022
m m
Basic loss per ordinary share have been calculated as follows:
Loss attributable to ordinary shares GBP20.2 GBP10.5
Weighted average number of ordinary shares 6.0 6.0
--------- ---------
336.7p 175.0p
As the Company has no obligation to issue further shares, disclosure of earnings per share
on a fully diluted basis is not relevant.
10 TRADE AND OTHER RECEIVABLES
Trade and other receivables comprise: 2023 2022
GBPm GBPm
Trade receivables - 25.7
Less bad debt provision - (16.1)
---------------- --------
- 9.6
Amounts owed by group undertakings (a) 144.5 2.3
Other receivables - 1.8
Prepayments and accrued income - 15.8
Corporation tax 0.7 -
---------------- --------
145.2 29.5
---------------- --------
As at 31 March 2022 GBP16.1m of trade receivables were considered
impaired and were provided for.
The Company's policy is to consider the trade receivables impairment
to be allocated on a collective basis and only impaired for the
purposes of IFRS 7, 'Financial Instruments: Disclosures' when
the loss can be specifically identified with the trade receivables.
The Company is required to continue providing residential customers
with water regardless of payment.
Other receivables at 31 March 2022 were not impaired.
(a) The current year amounts owed by group undertakings relate
to amounts owed by the Company's parent company, South West Water
Limited, as a result of the transfer of the Company's trade and
assets. The amounts due are repayable on demand. The prior year
balance included the sum of GBP0.4m in respect of amounts advanced
to Bristol Wessex Billing Services Limited ("BWBSL"), a joint
venture company between Bristol Water Holdings Limited ("BWH"),
an intermediate parent company until 1 February 2023, and Wessex
Water Services Limited, to fund the purchase of tangible assets.
This amount had no fixed repayment date.
11 BORROWINGS AND DERIVATIVES
2023 2022
GBPm GBPm
Amounts falling due after more than one year but less than five years
Bank and other term loans - secured - 58.0
Net unamortised premiums arising on issue of term loans - 0.3
- 58.3
Amounts falling due after more than five years
Bank and other term loans - secured - 339.0
Net unamortised premiums arising on issue of term loans - 0.8
- 339.8
Irredeemable
Debentures 1.6 1.6
8.75% irredeemable cumulative preference shares 12.5 12.5
------ -------
14.1 14.1
Total 14.1 412.2
------ -------
None of the bank and other term loans included within creditors are payable in instalments.
Bonds with a carrying value of GBP59.2m were redeemed on 17 November 2022 for GBP72.3 million.
The difference of GBP13.1m arising on early settlement was debited to finance costs in the
year.
11 BORROWINGS AND DERIVATIVES (continued)
Interest rate Total Total
Maturity 2023 2022
GBPm GBPm
Non current loans and borrowings
GBP42,000,000 bank loan 1.06% 21 Jun 2023 - 42.0
GBP16,000,000 bank loan 1.06% 2 Dec 2023 - 16.0
GBP50,000,000 bank loan 1.24% 14 Jun 2028 - 50.0
GBP25,000,000 bank loan 2.61% 24 Aug 2028 - 25.0
GBP91,109,686 indexed linked term loan 3.64% 30 Sept 2032 - 151.0
GBP57,500,000 term loan 6.01% 30 Sept 2033 - 57.5
GBP40,000,000 indexed linked term loan 2.70% 25 Mar 2041 - 55.5
Net unamortised premiums - 1.1
GBP1,405,218 Consolidated debentures 4.00% irredeemable 1.4 1.4
GBP36,740 perpetual debentures 4.25% irredeemable - -
GBP54,875 perpetual debentures 4.00% irredeemable 0.1 0.1
GBP72,900 perpetual debentures 3.50% irredeemable 0.1 0.1
GBP12,500,000 cumulative preference shares 8.75% irredeemable 12.5 12.5
------ ------
Total non- current loans and borrowings 14.1 412.2
------ ------
Borrowing facilities
Unutilised borrowing facilities are as follows: 2023 2022
GBPm GBPm
Expiring in June 2023 - 19.0
Expiring in December 2023 - 8.0
- 27.0
------------------------------------------------------------------------------ ------
The facilities are floating rate and incur non-utilisation fees at market rates.
12 COMMITMENTS
Capital commitments at 31 March 2023 contracted for but not provided were
GBPnil (2022: GBP6.9m).
13 ULTIMATE PARENT COMPANY AND CONTROLLING PARTY
As at 31 March 2022 the immediate parent company for this entity
was Bristol Water Core Holdings Limited ("BWCH"), a company
incorporated in England and Wales. On 1 February 2023 the share
capital of the Company was transferred to SWW, a subsidiary
of Pennon Group plc. As a result SWW became the immediate parent
company.
As at 31 March 2022 and 31 March 2023 the Directors considered
the ultimate parent and controlling party 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 annual report and accounts are available
from Peninsula House, Rydon Lane, Exeter, Devon, England, EX2
7HR.
14. RELATED PARTY TRANSACTIONS
From 3 June 2021 related parties include members and joint ventures of the Pennon Water plc
group of companies and key management personnel. Until 2 June 2021 related parties included
members and joint ventures of the Bristol Water Group Limited group of companies; members
of the iCON Infrastructure LLP group of companies; members of Itochu Corporation; and key
management personnel.
The principal related parties are:
Pennon Group plc ("PG"), registered in England and Wales, whose year end is 31 March, and
is the Company's ultimate UK holding company.
SWW, the Company's immediate parent, registered in England and Wales, whose year end is 31
March.
BWHUK , registered in England and Wales, whose year end is 31 March.
BWCH , registered in England and Wales, whose year end is 31 March.
BWBSL , registered in England and Wales, whose year-end is 31 March. The joint venture interest
is held by Bristol Water Holdings Limited, an intermediate holding company within the BWHUK
group of companies, which owns 100 class 'B' shares in the company, representing a holding
of 50% of the voting and equity rights of the company. BWBSL is a joint venture undertaking
between Bristol Water Holdings Limited and Wessex Water Services Limited, and provides meter
reading, billing, debt recovery and customer contact management services to this Company and
Wessex Water Services Limited, under a cost sharing arrangement.
Water 2 Business Limited ("W2B" ), registered in England and Wales, whose year-end is 30
June. The interest is held by BWH Limited, an intermediate holding company, which owns 30
class 'B' shares in the company representing a holding of 30% of equity rights and 40% of
voting rights of the company. W2B has a retail water and sewerage supply licence and provides
retail water services to non-household customers.
Pennon Water Services Limited ("PWS"), registered in England and Wales, whose year-end is
31 March. The interest is held by PG, the ultimate parent company, which owns 80% of PWS.
On 3 June 2021, following the acquisition by Pennon Group plc, PWS became a related party
of the Company. PWS has a retail water and sewerage supply licence and provides retail water
services to non-household customers.
Bristol Water Group Limited ("BWG"), registered in England and Wales, whose year end is 31
March, and until 2 June 2021 was the Company's ultimate UK holding company. F ollowing the
acquisition by Pennon Group plc, BWG ceased to be a related party of the Company on 2 June
2021.
Trading transactions
During the year the Company entered into trading transactions with related parties totalling:
Sales of goods and services Purchases of goods and services
2023 2022 2023 2022
GBPm GBPm GBPm GBPm
Joint ventures and associates of the
Pennon Group plc group
BWBSL
- management charges - - 2.5 2.8
- capital expenditure - - 0.3 0.2
- other recharges - - 0.1 0.1
W2B
- non-household supply of water 16.2 16.7 - -
PWS
- non-household supply of water 0.9 0.6 - -
17.1 17.3 2.9 3.1
-------------- -------------- ---------------- ----------------
The current year amounts above relate to the period to 31 January 2023. The trade and assets
of the Company were transferred to SWW on 1 February 2023. The prior year amounts above relating
to PWS are for the period from 3 June 2021, when PWS became a related party of the Company,
to 31 March 2022.
14. RELATED PARTY TRANSACTIONS (continued)
Non trading transactions
During the year BW received GBPnil (2022: GBP1.6m) from BWG for employee services to BWG relating
to the sale of the business. At 31 March 2022 the balance was GBPnil.
At the year end the balances held with related parties were:
Amounts due from Amounts due to
2023 2022 2023 2022
GBPm GBPm GBPm GBPm
Joint ventures and associates of the Bristol Water Group Limited group
BWBSL - 0.9 - 1.4
W2B - 1.4 - 0.3
PWS - - - -
- 2.3 - 1.7
---------- ------- -------- -------
The amounts outstanding at 31 March 2022 were unsecured and were settled in cash. The trade
and assets of the Company were transferred to SWW on 1 February 2023.
15. DISCONTINUED OPERATIONS
On 1 February 2023 the trade and majority of assets and liabilities of the Company were transferred
to SWW, the Company's parent company. Consideration for the transfer was settled via an intercompany
debtor created as part of the transfer. Settlement of this intercompany debtor is expected
in the year to 31 March 2024. The net assets transferred on the date of transfer are shown
below.
Assets GBPm
Property, plant and equipment 713.3
Intangible assets 13.6
Inventory 2.4
Trade and other receivables 29.1
Cash and cash equivalents 5.1
------------------
Total assets 763.5
Liabilities
Borrowings (423.9)
Leases (1.2)
Deferred income (20.6)
Government grants (0.3)
Trade and other payables (51.5)
Deferred tax liabilities (94.9)
Total liabilities (592.4)
Net assets disposed of 171.1
------------------
Net cash outflow arising on disposal
Cash and cash deposits disposed of (5.1)
16. CIRCULATION
This unaudited announcement is available on the Bristol Water website. Paper copies are also
available from the Company's parent company's registered office at Peninsula House, Rydon
Lane, Exeter EX2 7HR.
[1] Non-underlying items are adjusted for by virtue of their size, nature or incidence to enable a full understanding of financial performance
2 The Company's statutory revenue for 2022/23 of GBP109m included non-underlying revenue reductions of GBP6.6m in respect of a customer bill credit under WaterShare+
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END
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