Interim Management Statement

RNS Number : 9772M

Northumbrian Water Group PLC

09 February 2009

 



9 February 2009

Northumbrian Water Group plc

("the Company" or "the Group")

Interim Management Statement

The Company today publishes its Interim Management Statement for the period 1 October 2008 to 8 February 2009.

Revenues in the second half of the year are expected to be around £4m (1%) lower than in the first half as a consequence of the current economic downturn. In all other respects, the Board confirms that trading has been in line with expectations and that there have been no material events or transactions during the period.

Energy costs at the Group's principal subsidiary, Northumbrian Water Limited (NWL), remain in line with the position announced with the half-yearly results on 27 November 2008 at around £39m and slightly lower in the following year. NWL has procured its entire electricity requirement for 2008/09 and 72% and 33%, respectively, of its requirement for 2009/10 and 2010/11.

Capital investment for the regulated business is continuing to plan, with a forecast outturn of £1.1bn for the period April 2005 to March 2010. This includes further investment to reduce the risk of sewer flooding, improving water quality and the advanced anaerobic digestion plant at Bran Sands on Teesside.

Planning permission was granted at the end of January for the scheme to increase the capacity of the existing Abberton reservoir in Essex. The scheme, which should be complete by 2014, represents the culmination of many years work and will secure water supplies for customers in Essex for the foreseeable future.

At 31 March 2008, the Group's debt structure included £440m of index-linked borrowings whose principal accretes in line with the July Retail Price Index (RPI). The RPI adjustment for July 2008 was 5.05% and the principal accretion and interest charge for the year ending 31 March 2009 will, therefore, increase by £22m. Current forecasts for the July 2009 RPI indicate a negative adjustment, in which case the interest charge for 2009/10 would be reduced significantly.

The Group has a strong funding position in the current climate with sufficient resources to meet the Group's requirements through to 2011. The Group's cash position at 31 January 2009 was £370m, with undrawn committed facilities of £75m. Net debt is expected to be around £2.2bn at 31 March 2009 and gearing levels are not forecast to be materially different from the position reported last November.

NWL will submit its Final Business Plan to the Water Services Regulation Authority (Ofwat) by 7 April 2009. This document, part of the 2009 periodic review of price limits, will set out NWL's proposals for services and prices for the five years from 1 April 2010.

Outlook

The Board is confident of delivering a sound financial performance for the year ending 31 March 2009 and remains focussed on the core business of the Group.

The preliminary results for the year ending 31 March 2009 will be announced on 3 June 2009.

For further information contact:

Northumbrian Water                                        0191 301 6419

John Cuthbert, Managing Director

Chris Green, Finance Director

Alistair Baker, Communications & PR Manager

www.nwg.co.uk

Pelham PR                                                       020 7743 6679

James Henderson

Chelsea Hayes

Archie Berens

 

END

 

 

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