Dwr Cymru Welsh Water
Media Centre Latest News Strong results for Welsh Water customers

Strong results for Welsh Water customers

10/11/2016
  • Company invests £161 million to improve its water and environmental services
  • Seventh year in a row of below-inflation rise in customer bills
  • Sector-leading customer satisfaction in latest household survey
  • Over 90% satisfaction from business customers and housing developers
  • Helping 60,000 low-income customers to pay their water bills

The UK’s only not-for-profit water and sewerage company has reported a strong half-year financial position and it continues to focus on delivering high quality services to its customers.

Dŵr Cymru Welsh Water serves more than three million customers across much of Wales, Herefordshire and parts of Deeside. The company is owned by Glas Cymru and does not have shareholders, so it invests any gains back into the business to help improve services, keep bills lower and accelerate investment in areas that will directly benefit customers.

The company’s key investment projects over the past six months – which are part of the company’s commitment to a record £1.7 billion investment in its network between 2015 and 2020 - include:

  • £31 million investment scheme in Bryn Cowlyd Water Treatment Works which will ensure nearly 100,000 customers in Llandudno, Colwyn Bay, Conwy and the surrounding area continue to receive a top quality drinking water supply
  • Nearly £5 million at Llanberis Wastewater Treatment Works to make sure the treated water leaving the works is of the highest standard;
  • Investing £7 million in our Wastewater Treatment Works in Chester, which includes improved treatment processes and new river pumps to reduce the chance of flooding in the local area;
  • Over £21 million in the water network in Ceredigion and Pembrokeshire, £10 million in Flintshire and £15 million in north Herefordshire to provide customers with clean, fresh water for years to come by replacing or cleaning over 300 kilometres of pipe;
  • £8.5 million in Haverfordwest to improve the environment and prevent future flooding by building a brand new treatment works in Hook; and
  • Improving bathing water quality by investing nearly £7 million in the Gower to help ensure that Wales retains around a third of all the UK’s Blue Flags – whilst only having 13% of the coastline.

Independent research from the Consumer Council for Water (CCWater) shows Welsh Water was the best-rated on value for money and satisfaction across drinking water and wastewater services – as well as achieving its best-ever result in the latest survey of customer satisfaction by industry regulator Ofwat.

Separate CCWater research also showed business customers in Wales were significantly more likely to say they are satisfied with all aspects of their water supply than those in England, as well as showing significantly higher levels of trust. The levels of support for actively promoting their supplier was far higher for Welsh Water business customers than the customers of other water and sewerage companies, with a ‘Net Promoter Score’ of +30 in Wales, compared to +2 on average for others.

As reported in June 2016, more robust debt collection activity and related system issues led to a temporary increase in the number of written, largely emailed, complaints in early 2016. Targeted action plans have led to a significant reduction in complaints, though there is still more work to do.

Further progress has been marked in Welsh Water’s service to developers – tasked with connecting thousands of homes and businesses to its network every year – which saw the company ranked top in 2015-16 and sustaining its high rank in the first six months of this financial year.

Glas Cymru Chairman Alastair Lyons said: “Welsh Water has continued to make strong operational and financial progress over the past six months, our unique not-for-shareholder model puts customers first to provide the high quality service they rightly expect. Over the coming months we will continue to implement an extensive investment programme to improve further the services we provide.”

Welsh Water Chief Executive Chris Jones said: “These results are testament to the customer-led way of working that is a fundamental part of our not-for-profit model.

“The progress we’ve made is borne out in the encouraging independent reports, which show we are consistently achieving amongst the highest standards of customer satisfaction in our industry. Our challenge now is not only to maintain these standards but improve on them, so that we are meeting our customers’ expectations all of the time.”

NOTES TO EDITOR

Customer service and bills

  • 2016 is the seventh consecutive year of below-inflation price increases (on track to deliver a decade of below-inflation price increases between 2010 and 2020).
  • Around 60,000 of our low-income customers benefit from our range of social tariffs. Social tariffs provide assistance to those who are struggling to pay their bills. This is a particular problem in our area as 32% of our customers spend more than 3% of their disposable income on their water and sewerage bills (Ofwat, 2015).
  • The total number of written complaints increased significantly in early 2016 (2016: 4,334; 2015: 2,818), largely due to the introduction of a more robust process when chasing debt from customers who have not paid their bill. We received 1,460 compliments between April and September 2016.
  • To calculate the Net Promoter Score, customers were asked to imagine that they could choose their water and sewerage supplier and, this being the case, how likely they would be to recommend their provider to friends and family on a scale of 0 to 10, where 0 means highly unlikely to recommend and 10 means extremely likely. Those giving scores of 0 to 6 are classified as Detractors, 7-8 Passives and 9 or 10 as Promoters. An overall Net Promoter Score (NPS) is arrived at by subtracting the proportion of Detractors from the proportion of Promoters.
  • Welsh Water currently contributes around £1 billion a year to the Welsh economy and the company’s Developer Services Team plays an essential role every year in installing over 36 kilometres of water mains, taking responsibility for 15 kilometres of new sewers and responding to over 4,500 planning applications every year.

Financial results

  • Underlying profit of £1 million (2015: £25 million). The reduction in underlying profit reflects primarily increased expenditure, including on the maintenance of infrastructure assets, and increased interest costs resulting from higher RPI inflation. Because of our not-for-profit ownership structure, our surpluses are reinvested for the benefit of our customers.
  • Cash collection has improved, with the cost of bad debt falling from £12.5 million to £11.2 million in the six months.
  • Capital investment has accelerated with overall investment of £161 million (2015: £123 million).
  • Regulatory gearing – total net debt as a percentage of regulatory capital value – has fallen to 56% (down from 57% in March 2016 and 93% in 2001).

Operational performance

  • 99.99% overall compliance with quality standards in tests at water treatment works, in the network and customers’ taps in the nine months to September 2016 (September 2015: 99.99%).
  • Preventing bursts is a key focus of our strategy to reduce discolouration and interruptions to our customers supply and is measured as the number of ‘Customer Minutes Lost’. In the first six months of 2016, this has nearly halved to 5.50 mins whilst the number of contacts (about appearance, taste or odour of drink in water) has reduced to 2.37 (as a rate per 1,000 customers) from 2.50. Further improvement is being targeted with increased investment to replace older water mains across the network.
  • Our wastewater treatment sites achieved 99.30% compliance with discharge permits (which regulate the amount and quality of wastewater we can discharge into rivers and coastal waters) (September 2015: 99.13%).
  • Record low 79 pollution incidents to date (September 2015: 98).
  • A record number of Blue Flags (44) were awarded to beaches across Wales in 2016.

Company background

  • Welsh Water serves most of Wales, Herefordshire and parts of Deeside. It is one of 10 water and sewerage companies in England and Wales.
  • Since 2001, Welsh Water has been owned by Glas Cymru which was formed in April 2001 for the sole purpose of acquiring and owning Welsh Water.
  • Glas Cymru Holdings is a ‘company limited by guarantee’ and our business model is unique in the water industry. We have no shareholders which means that all financial surpluses are reinvested in the business for the benefit of customers.
  • Glas Cymru’s constitution focuses its core 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 wastewater services are delivered at best value to the communities served by Welsh Water.