Bristol Wtr.8t% Regulatory News (BWRA)

2022/23

(10 months trading)

2021/22

(12 months trading)

restated

Revenue

£109.0m

£125.5m

Underlying revenue1,2

£115.6m

£125.5m

Underlying (loss)/profit before tax1

(£3.8m)

£15.1m

Non-underlying items before tax[1]

(£20.9m)

(£0.1m)

(Loss)/profit before tax

(£24.7m)

£15.0m

Earnings per share

Statutory loss per share

(336.7p)

(175.0p)

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

2023

2022

Restated

(note 4)

Notes

£m

£m

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.

2023

2022

Restated

(note 4)

Notes

£m

£m

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)

2023

2022

Restated

(note 4)

Notes

£m

£m

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

Called up share capital

Share premium

account

Capital redemption

reserve

Retained earnings

Total

£m

£m

£m

£m

£m

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

2023

2022

Restated

(note 4)

Notes

£m

£m

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

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 £171.1m 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 2021

as originally presented

Change

31 March 2021

restated

(unaudited)

31 March 2022

as originally presented

Change

31 March 2022

restated

(unaudited)

Note

£m

£m

£m

£m

£m

£m

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

4

Change in accounting policies (continued)

Year to

31 March 2022

as originally presented

Change

Year to

31 March 2022

restated

(unaudited)

Note

£m

£m

£m

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 contributionsThe 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, £63.7m (1 April 2021: £62.4m) cumulative additional revenue has been recognised.

Revenues and profit before tax for the year ended 31 March 2023 was increased by £2.0m (31 March 2022, increased by £1.3m). 

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 £14.3m (1 April 2021: £12.2m) was recognised, resulting in a reclassification from assets to liabilities on the balance sheet.

5

REVENUE

2023

£m

2022

Restated

£m

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 £13 per customer and the total value of £6.6 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

£m

£m

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 £40m 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 c£1m 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 £0.2m 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

£m

£m

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