Interim Results
November 09 2006 - 7:25AM
UK Regulatory
RNS Number:7878L
Welsh Water Utilities Finance PLC
09 November 2006
NEWS FROM WELSH WATER
Financial results for the six months to 30 September 2006
Continued operational and financial progress drives
increased 'customer dividend'
Glas Cymru has today published its results for the six months to 30 September
2006.
Glas Cymru is the company that has owned Welsh Water since May 2001, with the
single purpose of delivering high quality services to its customers. Glas Cymru
has no shareholders and reinvests all financial surpluses for the benefit of
Welsh Water's customers.
Financial highlights of the results include:
* 'Customer dividend' increased to #19 per customer at a total cost this
year of some #25 million (2006: #23 million) - the only water company to
give such an annual 'customer dividend'.
* Net debt has reduced to some 77% of Regulatory Capital Value (RCV) as
compared to some 93% on the acquisition of Welsh Water in May 2001.
* Profit after tax (excluding fair value gains on financial instruments)
of #15 million (2005: #19 million) to be retained in the business for the
benefit of customers.
* Operating costs increased to #117 million (2005: #106 million),
primarily reflecting increases in power costs of #5 million and business
rates of #2 million.
* Capital expenditure of #115 million will bring improvements to customer
service, environmental quality and drinking water quality.
Operational and performance highlights include:
* Ranked third in the industry by Ofwat's 'Overall Performance Assessment'
of customer service and environmental performance for 2005-06 published on 7
November 2006 - the fifth year in a row that Welsh Water has been in the
'top three'.
* Key regulatory measures for levels of service, water quality and
environmental quality continue to show good overall performance during the
first six months of 2006-07.
* No water use restrictions despite summer rainfall being only 60% of the
long-term average.
* 99% of bathing waters achieved the EU mandatory standard for water
quality and, in 2006, Wales had a record 47 Blue Flag beaches and marinas,
around a third of the UK total.
Commenting on the performance and financial results, Glas Cymru Chairman Lord
Burns said, "I am pleased that Welsh Water's customers are continuing to see
benefits for them of our unique business model. They are receiving an increased
#19 'customer dividend' this year. They are also continuing to benefit from
levels of service that are rated by Ofwat as being consistently amongst the best
in the industry."
Welsh Water has successfully commenced its #1.25 billion five-year investment
programme (AMP4), which will bring major benefits to customers in terms of
drinking water quality, environmental protection and the alleviation of sewer
flooding. Capital investment since the commencement of the AMP4 programme now
totals some #352 million, with major projects completed including:
*Holyhead wastewater treatment works
*740 kms of water mains replaced or refurbished
*85 sewer overflows improved
*the risk of repeat sewer flooding reduced for 172 properties
The company's strong financial position, which it has achieved over the last
five years, has enabled it to raise the finance it needs for this investment
programme at attractive rates of interest, which will help to keep down bills to
Welsh Water's customers long into the future.
Lord Burns added, "Welsh Water's consistently good ranking in Ofwat's most
recent league tables of service performance is a great credit to all those who
work for the company and for our long-term service partners, although there
remains much to do. We have a major programme of capital investment to carry out
during this regulatory review period and beyond, and we are committed to further
improving the quality and reliability of the service that we provide to our
customers."
Ends
For further information contact the Glas Cymru 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.
Glas Cymru Cyfyngedig
Interim report and accounts for the six months ended 30 September 2006
Chairman's Statement
--------------------------------------------------------------------------------
Chairman's statement
I am pleased to report a sound financial and operational performance in the six
months period to 30 September 2006. Overall, we are maintaining our position as
a leader in the industry in terms of customer service and environmental
performance, combined with a strengthening of key financial measures. Based on
this progress, we are able to give an increased 'customer dividend' of #19 per
customer this year, at a total cost of some #25 million.
Financial highlights
* 'Customer dividend' increased to #19 per customer at a total cost this
year of #25 million (2005: #23 million) - the only water company to give
such an annual 'customer dividend'.
* Net debt has reduced to some 77% of Regulatory Capital Value (RCV) as
compared to some 93% on the acquisition of Welsh Water in May 2001.
* Profit after tax (excluding fair value gains on financial instruments)
of #15 million (2005: #19 million) to be retained in the business for the
benefit of customers.
* Operating costs increased to #117 million (2005: #106 million),
primarily reflecting increases in power costs of #5 million and business
rates of #2 million.
* Capital expenditure (including infrastructure renewals expenditure) of
#115 million (2005: #107 million) will bring improvements to customer
service, environmental quality and drinking water quality.
Operational highlights
* Ranked third in the industry by Ofwat's 'Overall Performance Assessment'
of customer service and environmental performance for 2005-06 published on 7
November 2006 - the fifth year in a row that Welsh Water has been in the
'top three'.
* Key regulatory measures for levels of service, water quality and
environmental quality continue to show good overall performance during the
first six months of 2006-07.
* No water use restrictions despite summer rainfall being only 60% of the
long-term average.
* 99% of bathing waters achieved mandatory standard and, in 2006, Wales
had a record 47 Blue Flag beaches and marinas, around a third of the UK
total.
Financial performance
Glas Cymru's financial results cover the six months to 30 September 2006.
Comparative figures are given for the six months to 30 September 2005 and the
year ended 31 March 2006. Financial performance over the first half of the year
was broadly in line with expectations with gearing (net debt/regulatory capital
value) at 30 September 2006 of some 77% (2005: 80%).
Turnover in the six months to 30 September 2006 was #287 million, as compared to
#275 million in the six months to 30 September 2005. The increase reflects the
RPI+K increase in prices of 6.0% allowed by Ofwat less the increase in the
'customer dividend' for the year from #18 per customer to #19 per customer. In
the twelve months period to 30 September 2006, 24,000 domestic customers
switched to metered charging (2005: 29,000).
Customer debt recovery performance continued at broadly the same collection
rates as in previous year, reflecting good performance by Welsh Water and its
service partner Thames Water in the monitoring and recovery of customer debt.
Operating costs (excluding depreciation and infrastructure renewals expenditure)
increased to #117 million (2005: #106 million), primarily reflecting increases
in power costs (#5 million) and business rates (#2 million). Power costs for the
full year are estimated to be some #35 million, as compared to #28 million in
2005/06.
Net interest payable in the period (excluding fair value movements) was #70
million (2005: #73 million), reflecting financial savings from the early
redemption of #425 million of bonds last year. Net interest payable includes an
indexation charge on index linked debt of #4 million (2005: #7 million).
Profit after taxation (but before the fair value movements on financial
instruments) was #15 million, slightly down on the #19 million in the previous
year. After allowing for the non cash "book profit" from the movement in the
fair value of financial instruments, the total profit after tax was #25 million
(2005: #4 million loss).
As at 30 September 2006, Glas Cymru had cash, short-term deposits and undrawn
syndicated bank facilities of #370 million, giving the Company a high level of
financial liquidity.
Customer service, water quality and environmental quality
On 7 November 2006, Ofwat published its Annual Report on Levels of Service for
the Water Industry in England and Wales for the year ended 31 March 2006. On
Ofwat's 'Overall Performance Assessment', Welsh Water was ranked third, the
fifth year in a row that Welsh Water has been in the 'top three'. This
consistent good performance reflects a sustained commitment to improving
services for customers. Prior to its acquisition by Glas Cymru, Welsh Water was
ranked just seventh in 2000-01.
Our results for the first six months of this year show that we are maintaining
our good performance. Further performance highlights include:
- 99.8% of customers served by compliant wastewater treatment works.
- Overall water quality compliance at customer taps of 99.9%, equaling its
highest ever level.
- Good progress made in terms of leakage reduction and we are currently on
course to meet the target for 2006-07.
- Continuing high customer satisfaction with the overall service provided by
Welsh Water.
Maintaining performance at these high levels is a constant challenge, and we are
particularly focused on seeking further improvement in the performance of our
sewerage network.
Capital investment programme
Capital investment (including infrastructure renewals expenditure) was #115
million before grants and contributions (2005: #107 million). Expenditure to
date of #352 million is broadly in-line with Welsh Water's #1.25 billion AMP4
capital investment programme to deliver regulatory targets for improvements to
drinking water quality, environmental protection and the alleviation of sewer
flooding.
Significant outputs achieved so far during AMP4 period include:
- Holyhead wastewater treatment works
- 740kms of water mains replaced or refurbished
- 85 sewer overflows improved
- the risk of repeat sewer flooding reduced for 172 properties
The company's strong financial position, which it has achieved over the last
five years, has enabled it to raise the finance it needs for this investment
programme at attractive rates of interest, which will help to keep down bills to
Welsh Water's customers long into the future.
Looking ahead
Welsh Water's consistently good ranking in Ofwat's most recent league tables of
service performance is a great credit to all those who work for the company and
for our long-term service delivery partners, although there remains much to do.
We have a major programme of capital investment to carry out during this
regulatory review period and beyond; and we are committed to further improving
the quality and reliability of the service that we provide to our customers.
Lord Burns
Chairman - Glas Cymru Cyfyngedig
9 November 2006
Summary of key measures of service performance
Period to 30 Period to 30
September 2006 September 2005
Levels of Service
Properties "at
risk" of receiving
low pressure 636 996
Unplanned water
supply
interruptions 207 227
Properties "at
risk" of sewage
flooding 515 567
Sewage flooding
incidents -
hydraulic overload
("1 in 10 year
storms") 45 50
Sewage flooding
incidents - other
causes 105 64
Billing enquiries
answered within 5
days 99.99% 99.4%
Written complaints
answered within 10
days 99.6% 99.1%
Number of written
complaints
received 5,248 4,980
Customer meters
read within year 97.8% 97.6%
Telephone calls
answered within 30
seconds 91.7% 91.8%
Water Quality
Overall water
quality compliance
'at the tap'(*) 99.9% 99.9%
Bacteriological
compliance 'at the
tap'(*) 99.4% 99.6%
Iron compliance
'at the tap'(*) 99.0% 99.0%
Operational
Performance
Index(*) 99.8% 99.8%
Environment
Leakage
(m(3)/km/day) 8.0 8.3
Number of
'Category 1 and 2'
pollution
incidents(*) 11 14
Number of
'Category 3'
pollution
incidents(*) 157 146
Customers served
by compliant
wastewater
treatment works(*) 99.8% 99.6%
Wastewater
treatment works
complying with
consents 98.9% 98.4%
Sewage sludge
recycled
satisfactorily 100% 100%
'Mandatory'
coastal bathing
water compliance 99% 100%
'Guideline'
coastal bathing
water compliance 89% 91%
(*) Calendar year to end September 2006
Consolidated income statement
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2006 2005 2006
Note #m #m #m
Revenue 2 287.2 275.2 553.5
Operating costs :
- Operational
expenditure (116.7) (106.2) (213.2)
- Infrastructure
renewals expenditure (31.0) (19.7) (48.8)
- Depreciation and
amortisation (48.2) (48.6) (97.5)
Profit on disposal of
fixed assets - 0.3 0.8
------ ------- -------
Operating profit 91.3 101.0 194.8
Interest payable and
similar charges 3a (72.0) (78.1) (156.9)
Interest receivable 3a 2.5 4.8 6.7
Fair values
gains/(losses) on
financial instruments 3b 13.9 (33.9) (33.3)
----- ------ ------
(55.6) (107.2) (183.5)
------ ------- -------
Profit/(loss) before
taxation 35.7 (6.2) 11.3
Taxation 4 (10.9) 1.9 4.8
------ ------- -------
Profit/(loss) after
taxation 24.8 (4.3) 16.1
====== ======= =======
Profit after tax excluding
fair value gains/(losses)
on financial instruments 15.1 19.4 39.4
Impact of fair value gains/
(losses) on financial instruments
(including taxation effect) 3b 9.7 (23.7) (23.3)
Profit/(loss) after taxation 24.8 (4.3) 16.1
The group has no other recognised gains or losses and accordingly a statement of
recognised income and expenses has not been presented.
See Note 1 for the basis of preparation.
Consolidated balance sheet
At At At
30 September 30 September 31 March
2006 2005 2006
Note #m #m #m
Assets
Non-current assets
Property, plant & equipment 6 2,819.5 2,753.9 2,795.6
Intangible assets 5 4.9 3.4 4.4
Financial assets:
- derivative financial
instruments 3d 7.3 - 6.3
------- ------- -------
2,831.7 2,757.3 2,806.3
------- ------- -------
Current assets
Trade and other receivables 7 103.4 87.5 86.7
Financial assets:
- held to maturity investments 8 0.3 1.0 0.3
- derivative financial
instruments 3d 0.4 - 4.2
Cash and cash equivalents 9 46.9 0.5 14.0
------- ------- -------
151.0 89.0 105.2
------- ------- -------
Liabilities
Current liabilities
Financial liabilities:
- borrowings (122.3) (207.5) (124.6)
- derivative financial
instruments 3c (4.8) (5.5) (6.2)
Trade and other payables 10 (103.0) (93.1) (118.5)
------- ------- -------
(230.1) (306.1) (249.3)
------- ------- -------
Net current liabilities (79.1) (217.1) (144.1)
Non-current liabilities
Financial liabilities:
- borrowings (2,313.8) (2,146.8) (2,244.9)
- derivative financial
instruments 3c (90.6) (96.7) (105.9)
Retirement benefit obligations (6.6) (7.8) (6.6)
Provisions 11 (11.3) (10.0) (9.8)
------- ------- -------
(2,422.3) (2,261.3) (2,367.2)
------- ------- -------
Net assets before deferred tax 330.3 278.9 295.0
Deferred tax (384.7) (378.5) (374.2)
------- ------- -------
Net liabilities (54.4) (99.6) (79.2)
======= ======= =======
Reserves
Retained earnings (54.4) (99.6) (79.2)
------- ------- -------
Total reserves (54.4) (99.6) (79.2)
======= ======= =======
Consolidated cashflow statement
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2006 2005 2006
Note #m #m #m
Operating profit 91.3 101.0 194.8
Adjustments for:
Depreciation 48.2 48.6 97.5
Profit on disposals of
fixed assets - (0.3) (0.8)
Changes in working capital:
Increase in trade and other
receivables (18.6) (19.9) (17.9)
Decrease in trade and other
payables (3.9) (22.8) (13.2)
Increase in pension deficit - - (1.2)
Increase in provisions 1.7 0.4 0.1
------ ------- -------
Cash generated from
operations 118.7 107.0 259.3
Interest received 2.7 7.7 7.2
Interest paid (20.2) (37.1) (139.8)
Tax paid - - (1.1)
------ ------- -------
Net cash inflow from
operating activities 101.2 77.6 125.6
------ ------- -------
Cash flows from investing activities
Purchase of property, plant
and equipment (98.0) (96.0) (182.5)
Grants and contributions
received 11.3 6.4 16.8
Proceeds from sale of
property, plant and
equipment - 0.1 0.8
------ ------- -------
Net cash used in investing
activities (86.7) (89.5) (164.9)
------ ------- -------
Net cash inflow/(outflow)
before financing activities 14.5 (11.9) (39.3)
Cash flows from financing activities
Long term loans and finance
leases received - 56.2 113.8
Authorised loan drawdown 12.3 115.4 145.3
Purchase of own bonds - (2.2) (3.3)
Bond redemption - (425.0) (465.5)
Capital element of finance
lease payments - (0.7) (5.2)
Reduction in financial
assets - 36.6 33.6
Other loan repayments - (0.1) (0.4)
------ ------- -------
Net cash generated/(used)
in financing activities 12.3 (219.8) (181.7)
------ ------- -------
Increase/(decrease) in net
cash 26.8 (231.7) (221.0)
Net cash at start of period 14.0 231.3 235.0
------ ------- -------
Net cash at end of period 9 40.8 (0.4) 14.0
------ ------- -------
1. Basis of preparation
The interim report and accounts are for the six months ended 30 September 2006.
They have been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union and expected to be applicable
in the annual report and accounts for the year ending 31 March 2007 and those
parts of the Companies Act 1985 applicable to reporting under IFRS. The
financial statements have been prepared under the historical cost convention as
modified by the revaluation of certain financial instruments to fair value in
accordance with IFRS and as permitted by the Fair Value Directive as implemented
in the amended Companies Act 1985.
These standards are subject to ongoing review and accordingly practice is
continuing to evolve. Therefore the standards that will be applicable and
adopted for use in respect of the year ending 31 March 2007 are not known with
certainty at this time.
These financial statements are unaudited but have been formally reviewed by the
auditors and their report is set out on page 14. The results shown for the year
ended 31 March 2006 have been derived from the group's audited full financial
statements filed with the Registrar of Companies. The report of the auditors on
those accounts was unqualified and did not contain a statement under Section 237
(2) or 237(3) of the Companies Act 1985.
The company is limited by guarantee and does not have any share capital. In the
event of the company being wound up, the liability of the members is limited to
#1 each.
2. Segmental information
All reported turnover and operating profits arise from the operation of water
and sewerage business in the UK.
3. Financing cost and fair value of derivative financial instruments
Six months Six months Year
ended ended ended
30 September 30 September 31 March
3a). Net interest before
fair value losses on
financial instruments 2006 2005 2006
#m #m
Interest payable on bonds (42.9) (55.6) (91.9)
Indexation on index-linked
bonds (3.9) (6.8) (17.4)
Interest payable on finance
leases (18.1) (14.9) (31.9)
Interest payable on other
loans (6.6) - (12.8)
Amortisation of bond issue
costs (0.5) (0.8) (2.9)
------- ------- -------
Total interest payable (72.0) (78.1) (156.9)
Interest receivable 2.5 4.8 6.7
------- ------- -------
Net interest payable before
fair value adjustments (69.5) (73.3) (150.2)
------- ------- -------
3. Financing cost and fair value of derivative financial instruments (continued)
Six months Six months Year
ended ended ended
30 September 30 September 31 March
3b). Fair value
gains/(losses) on financial
instruments 2006 2005 2006
#m #m #m
Fair value gains/(losses)
on interest rate swaps 12.2 (33.9) (29.8)
Fair value gains/(losses)
on index linked swaps 1.7 - (3.5)
Fair value gains/(losses) on foreign exchange:
- Cross-currency swaps - 48.5 48.5
- Foreign denominated bonds - (48.5) (48.5)
------- ------- -------
Fair value gains/(losses)
on financial instruments 13.9 (33.9) (33.3)
------- ------- -------
Tax effect of fair value
(gains)/losses on financial
instruments (4.2) 10.2 10.0
------- ------- -------
Net of tax impact of fair
value gains/(losses) on
financial instruments 9.7 (23.7) (23.3)
------- ------- -------
Whilst the group employs an economically effective policy using interest rate
and currency swaps, this policy does not satisfy the stringent hedge accounting
criteria of IAS39. Consequently, the group's interest rate and currency swaps
are fair valued at each balance sheet date with the movement (gains or losses)
disclosed in the income statement. Over the life of these swaps, providing that
there is an effective match, these fair value adjustments will reverse and
reduce to zero.
30 September 30 September 31 March
3c). Fair value of 2006 2005 2006
derivative financial Liabilities Liabilities Liabilities
liabilities #m #m #m
Current:
Interest rate swaps (4.4) (5.5) (6.2)
Index linked swaps (0.4) - -
------- ------- -------
Total (4.8) (5.5) (6.2)
------- ------- -------
Non-current:
Interest rate swaps (81.4) (96.7) (91.9)
Index linked swaps (9.2) - (14.0)
------- ------- -------
(90.6) (96.7) (105.9)
------- ------- -------
30 September 30 September 31 March
3d). Fair value of derivative 2006 2005 2006
financial assets Assets Assets Assets
#m #m #m
Current:
Index linked swaps 0.4 - 4.2
------- ------- -------
Total 0.4 - 4.2
------- ------- -------
Non-current:
Index linked swaps 7.3 - 6.3
------- ------- -------
7.3 - 6.3
------- ------- -------
4. Taxation
30 September 30 September 31 March
2006 2005 2006
#m #m #m
Tax on profit comprises:
Corporation Tax (0.4) - (1.4)
Deferred Tax (10.5) 1.9 6.2
-------- --------- ---------
Taxation (charge)/credit (10.9) 1.9 4.8
-------- --------- ---------
The tax charge for the six months to September 2006 equates to approximately 30%
of the profit for the period, which is the effective rate expected to apply in
the full year to 31 March 2007. This is in contrast to the tax credits in the
period to September 2005 and the year to March 2006. These credits were a result
of deferred tax credits arising principally from leasing transactions undertaken
in those periods.
5. Intangible fixed assets
Intangible fixed assets comprise computer software and related system developments.
Cost Depreciation Net book value
#m #m #m
At 1 April 2006 53.4 (49.0) 4.4
Additions 1.4 - 1.4
Amortisation charge for the period - (0.9) (0.9)
-------- --------- ---------
At 30 September 2006 54.8 (49.9) 4.9
-------- --------- ---------
6. Property, plant and equipment
Freehold land & Infrastructure Operational Plant Total
buildings assets structures equipment,
computer
hardware
#m #m #m #m #m
Cost
At 1 April 2006 32.7 1,375.2 2,055.0 193.2 3,656.1
Additions net
of grants and
contributions - 22.8 40.0 8.4 71.2
------ -------- ------- ------- -------
At 30
September 2006 32.7 1,398.0 2,095.0 201.6 3,727.3
------ -------- ------- ------- -------
Accumulated depreciation
At 1 April 2006 15.5 39.8 654.6 150.6 860.5
Charge for the
period - 10.6 35.4 1.3 47.3
------ -------- ------- ------- -------
At 30
September 2006 15.5 50.4 690.0 151.9 907.8
------ -------- ------- ------- -------
Net book value
At 30
September 2006 17.2 1,347.6 1,405.0 49.7 2,819.5
------ -------- ------- ------- -------
At 31 March
2006 17.2 1,355.4 1,400.4 42.6 2,795.6
------ -------- ------- ------- -------
7. Trade and other receivables
30 September 30 September 31 March
2006 2005 2006
#m #m #m
(a) Amounts falling due within one year:
Trade receivables 94.0 82.9 77.0
Less provision for
impairment of
receivables (52.0) (49.8) (49.6)
--------- --------- -------
Trade receivables -
net 42.0 33.1 27.4
Other receivables 5.2 2.1 9.8
Prepayments and
accrued income 56.2 52.2 49.5
--------- --------- -------
103.4 87.4 86.7
(b) Amounts falling due after more than one year:
Other receivables - 0.1 -
--------- --------- -------
103.4 87.5 86.7
--------- --------- -------
8. Held to maturity investments
30 September 30 September 31 March
2006 2005 2006
#m #m #m
Fixed term deposits:
- due within 1 year 0.3 1.0 0.3
--------- --------- ---------
0.3 1.0 0.3
--------- --------- ---------
9. Cash and cash equivalents
30 September 30 September 31 March
2006 2005 2006
#m #m #m
Cash at bank and in hand 0.1 - 3.8
Short-term bank deposits 46.8 0.5 10.2
--------- --------- ---------
46.9 0.5 14.0
--------- --------- ---------
Net cash includes the following for the purposes of the cash flow statement:
30 September 30 September 31 March
2006 2005 2006
#m #m #m
Cash and cash equivalents 46.9 0.5 14.0
Bank overdraft (6.1) (0.9) -
--------- --------- ---------
40.8 (0.4) 14.0
--------- --------- ---------
10. Trade and other payables
30 September 30 September 31 March
2006 2005 2006
#m #m #m
Trade creditors 18.0 16.0 26.8
Capital creditors 31.4 29.7 45.3
Other taxation and social security
costs 0.3 0.5 0.3
Other creditors 53.3 46.9 46.1
---------- ---------- ---------
103.0 93.1 118.5
---------- ---------- ---------
11. Provisions
30 September 30 September 31 March
2006 2005 2006
#m #m #m
Restructuring provision 4.8 5.0 5.3
Uninsured losses 6.5 5.0 4.5
---------- ---------- ---------
11.3 10.0 9.8
---------- ---------- ---------
12. Analysis and reconciliation of net debt
a) Net debt at the balance sheet date may be analysed as:30 September 30 September 31 March
2006 2005 2006
#m #m #m
Bank overdraft (6.1) (0.9) -
Cash and cash equivalents 46.9 0.5 14.0
Financial assets 0.3 1.0 0.3
--------- --------- --------
41.1 0.6 14.3
--------- --------- --------
Debt due after one year (1,548.4) (1,461.7) (1,497.0)
Debt due within one year (85.1) (157.5) (120.6)
Finance leases (740.1) (686.9) (740.1)
Accrued interest (63.1) (54.2) (19.0)
Unamortised bond issue
costs 6.7 9.2 7.2
--------- --------- --------
(2,430.0) (2,351.1) (2,369.5)
--------- --------- --------
Net debt (2,388.9) (2,350.5) (2,355.2)
--------- --------- --------
12. Analysis and reconciliation of net debt (continued)
b) The movement in net debt during the period may be summarised as:30 September 30 September 31 March
2006 2005 2006
#m #m #m
Net debt at start period (2,355.2) (2,246.3) (2,246.3)
Increase/(decrease) in net
cash 26.8 (231.7) (221.0)
Decrease in financial
assets - (36.6) (33.6)
Increase/(decrease) in debt (12.3) 256.4 215.3
--------- --------- --------
Decrease/(increase) in net
debt arising from cashflows 14.5 (11.9) (39.3)
Movement in accrued
interest (44.1) (36.5) (1.3)
Amortisation of debt issue
costs (0.5) (0.8) (2.7)
Foreign currency movement
on dollar bond - (48.5) (48.5)
Amortisation of bond issue
premium 0.3 0.3 0.3
Indexation of index-linked
debt (3.9) (6.8) (17.4)
--------- --------- --------
Movement in net debt during
the period (33.7) (104.2) (108.9)
--------- --------- --------
--------- --------- --------
Net debt at end of period (2,388.9) (2,350.5) (2,355.2)
--------- --------- --------
13. Statement of changes in reserves
30 September 30 September 31 March
2006 2005 2006
#m #m #m
Reserves brought forward (79.2) (95.3) (95.3)
Profit/(loss) for the
period 24.8 (4.3) 16.1
--------- --------- --------
Reserves carried forward (54.4) (99.6) (79.2)
========= ========= ========
Independent review report to Glas Cymru Cyfyngedig
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 September 2006 which comprises the consolidated interim
balance sheet as at 30 September 2006 and the related consolidated interim
statements of income and cash flow for the six months then ended and related
notes. We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing Rules
of the Financial Services Authority require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.
This interim report has been prepared in accordance with the basis set out in
Note 1.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the disclosed accounting policies have
been applied. A review excludes audit procedures such as tests of controls and
verification of assets, liabilities and transactions. It is substantially less
in scope than an audit and therefore provides a lower level of assurance.
Accordingly we do not express an audit opinion on the financial information.
This report, including the conclusion, has been prepared for and only for the
company for the purpose of the Listing Rules of the Financial Services Authority
and for no other purpose. We do not, in producing this report, accept or assume
responsibility for any other purpose or to any other person to whom this report
is shown or into whose hands it may come save where expressly agreed by our
prior consent in writing.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2006.
PricewaterhouseCoopers LLP
Chartered Accountants
Cardiff
9 November 2006
Notes:
(a) The maintenance and integrity of the Glas Cymru web site is the
responsibility of the company; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the interim report
since it was initially presented on the web site.
(b) Legislation in the United Kingdom governing the preparation and
dissemination of financial information may differ from legislation in other
jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DVLFBQFBLFBE
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