RNS Number:2398H
Welsh Water Utilities Finance PLC
08 November 2007
NEWS FROM WELSH WATER
8th November 2007
Welsh Water interim financial results to 30th September 2007
Customers benefit from improved performance
Welsh Water has today announced its half-year results which show the
'not-for-profit' company again paying a 'customer dividend', increased to #20
per customer this year (at a total cost of #27 million), made possible by
improved financial and operating efficiency.
Welsh Water has been owned by Glas Cymru since May 2001 and has the single
purpose of delivering better value services to its customers. Glas Cymru is
unique amongst UK utility companies in that it has no shareholders and so is
able to reinvest all financial surpluses for the benefit of Welsh Water's
customers.
Highlights for the half-year include:
* 'Customer dividend' for 2007-08 increased to #20 per customer
* Improvements in targeted aspects of service performance - including
sewer flooding and serious pollution incidents
* Reduction in leakage, on course to hit target for 2007-08
* Improved financial performance, with gearing reduced to 73% (as against
93% in May 2001)
* Improved credit rating, with A-grade corporate family rating awarded by
Moody's
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 the
benefits of our unique business model - receiving a 'customer dividend'
increased to #20 this year. We face a major challenge over the rest of this year
to deliver one of our largest ever capital investment programmes, benefiting
customer service, drinking water quality and the environment. However, I am
confident that we can build on our achievements to date in pursuit of our goal
which is to be recognised by our customers as the best water company in the UK."
Lord Burns also praised the staff of Welsh Water and their partner companies for
their response to the severe flooding in Herefordshire during the summer, when
Welsh Water's Whitbourne water treatment works was flooded by the River Teme and
had to be shut down for 48 hours. Tankers, bowsers and bottled water were needed
to maintain supplies to 4,000 customers.
"It was very heartening that our professional response was acknowledged by our
customers and that almost no complaints were received, despite the great
inconvenience caused by unprecedented weather conditions. It was a great tribute
to the untiring efforts of our people", he said.
The results in detail:
Customer benefits and operational performance:
* Customer dividend' increased to #20 per customer at a total cost this
year of some #27 million (2006: #25 million) - the only water company to
give such an annual 'customer dividend'.
* Fewer customers suffering from internal sewer flooding as a result of
blockages, collapses or overloaded sewers.
* Best ever compliance with the standards for iron in water - a result of
more than 1,000 km of water mains being replaced or renewed since April
2005.
* In 2007, Wales had a record 49 Blue Flag beaches and marinas, around a
third of the UK total.
* On health and safety, a 28% reduction in reportable accidents.
* Good progress to achieve leakage reduction target for 2007/08 - with 50
leaks and bursts being repaired every day.
* Continuing high customer satisfaction with the overall service provided
by Welsh Water, at 75%.
Major capital investment programme:
* Capital expenditure of #131 million (2006: #115 million) benefiting
customer service, environmental quality and drinking water quality.
* 205 kms of water mains replaced or refurbished.
* Good progress towards achieving this year's targets of improving 84
sewer overflows and alleviating the risk of repeat sewer flooding for over
400 properties.
* Total investment over the AMP4 period (2005 to 2010) forecast to be some
#1,300 million (equivalent to #1,000 of investment for every customer
served).
Strong financial performance:
* Net debt has reduced to some 73% of Regulatory Capital Value (RCV) as
compared to some 93% on the acquisition of Welsh Water in May 2001.
* Profit before taxation (but before the fair value movements on financial
instruments) was #13 million, some #9 million down on last year, primarily
reflecting increased charges for the maintenance of our pipe and sewer
networks.
* Operating costs decreased to #114 million (2006: #117 million), partly
reflecting lower power prices.
* Moody's, the credit rating agency, assigned an A3 corporate family
rating to Welsh Water, reflecting the improved credit quality of the
company.
In October 2007, Welsh Water pleaded guilty to four charges of supplying water
unfit for human consumption in relation to the cryptosporidium outbreak in North
Wales between November 2005 and January 2006, and was fined #60,000. The company
has apologised for the incident and believes that it took all reasonable steps
to respond to the outbreak and bring it to an end.
Lord Burns added: "The Cwellyn outbreak was very serious and we have learned
important lessons from it."
Ends
For further information, contact the Glas Cymru press office on 02920 556140.
Notes for editors:
* 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.
* 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.
* 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.
AC/07/56
Glas Cymru
Interim report and accounts
for the six months ended 30 September 2007
Chairman's Statement
--------------------------------------------------------------------------------
I am pleased to report a good financial performance in the six months period to
30 September 2007. Our financial position continues to strengthen with gearing
(net debt/regulatory capital value) at 30 September 2007 standing at 73%
compared to 93% on the acquisition of Welsh Water in May 2001, which has been
reflected in our improved A3 corporate family rating by Moody's. Our high level
of financial liquidity, based on cash deposits and secure bank facilities, means
that we have been largely unaffected by the recent turmoil in the financial
markets. We are again paying a 'customer dividend', which has increased to #20
per customer this year, at a total cost of some #27 million. This continued
growth in our 'customer dividend' is made possible by the ongoing improved
financial and operating efficiency of the business, with operating costs having
been reduced by some 8% in real terms over the period since 2001 (as compared to
a 14% increase for the water and sewerage companies as a whole).
Overall, our service performance has generally been good, with a record 49 Blue
Flag beaches and marinas in Wales in 2007, for example. It is pleasing to report
that in our targeted areas of serious pollution incidents, sewer flooding and
iron compliance, performance has improved. We are continuing to address these
issues and are committed to regaining our position as a leader in the industry.
We have responded well to some significant challenges resulting from the unusual
weather patterns this summer. The extremely wet weather has impacted on raw
water quality in parts of our area and on some drinking water quality measures.
I would particularly like to pay tribute to the response of our people to the
severe floods which affected Herefordshire in July, causing considerable
disruption. Our Whitbourne water treatment works was flooded by the river Teme
and had to be shut down for more than 48 hours but, through the effective
deployment of tankers, bowsers and bottled water, we were able to minimise the
disruption so that only some 4,000 customers were affected. We appreciate the
patience they showed at this difficult time.
The outbreak of illness caused by cryptosporidium in parts of Gwynedd and
Anglesey between the beginning of November 2005 and the end of January 2006
caused considerable distress and inconvenience for our customers in the area. On
11 October 2007, in Caernarfon Magistrates Court, we pleaded guilty to four
charges of supplying water unfit for human consumption, and were fined #60,000.
We have apologised for the incident and believe that we took all reasonable
steps to respond to the outbreak and bring it to an end. In addition, we were
dealing with a new situation where very low levels of cryptosporidium oocysts -
well within the then current regulatory standard - were able to cause illness.
The Cwellyn outbreak was very serious and we have learned some important lessons
from it.
Looking ahead
We will shortly be publishing an important document "Welsh Water: Our
Sustainable Future" in which we will explain our broad objectives and our
'direction of travel' over the next 25 years. We provide an essential public
service and many of the decisions we take today will have an important impact on
our customers, the economy and on the environment for many years to come. It is
therefore important that we are clear about our long-term objectives and how we
plan to achieve them.
We have some major challenges ahead, notably our major programme of capital
investment to carry out during this regulatory review period and beyond.
However, we are confident in our ability to meet these challenges and to further
improve the quality and reliability of the service that we provide to our
customers.
Lord Burns
Chairman - Glas Cymru Cyfyngedig
8 November 2007
Review of the business
--------------------------------------------------------------------------------
Financial performance
* 'Customer dividend' increased to #20 per customer at a total cost this
year of #27 million (2006: #25million) - the only water company to give such
an annual 'customer dividend'.
* Net debt has reduced to some 73% of Regulatory Capital Value (RCV) as
compared to some 93% on the acquisition of Welsh Water in May 2001.
* Moody's, the credit rating agency, assigned an A3 corporate family
rating to Welsh Water, reflecting the increased credit quality of the
company.
* #85 million of further finance raised in October 2007 through a sale and
leaseback of refurbished water mains.
* Profit before tax (excluding fair value gains on financial instruments)
of #13 million (2006: #22 million) to be retained in the business for the
benefit of customers.
* Operating costs decreased to #114 million (2006: #117 million), partly
reflecting lower power prices.
* Capital expenditure (including infrastructure renewals expenditure) of
#131 million (2006: #115 million) will bring improvements to customer
service, environmental quality and drinking water quality.
Glas Cymru's financial results cover the six months to 30 September 2007.
Comparative figures are given for the six months to 30 September 2006 and the
year ended 31 March 2007. Financial performance over the first half of the year
was slightly ahead of expectations with gearing (net debt/regulatory capital
value) at 30 September 2007 of some 73% (2006: 77%).
Turnover in the six months to 30 September 2007 was #307 million, as compared to
#287 million in the six months to 30 September 2006. The increase reflects the
RPI+K increase in prices of 8.0% allowed by Ofwat less the increase in the
'customer dividend' for the year from #19 per customer to #20 per customer. In
the twelve months period to 30 September 2007, 23,000 domestic customers
switched to metered charging (2006: 24,000). The exceptionally wet summer saw a
2% (circa #2 million) reduction in consumption by our metered customers.
Customer debt recovery performance continued at broadly the same collection
rates as in the 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)
decreased to #114 million (2006: #117million), partly reflecting the impact of
lower power prices on power costs, down by #2 million in the period.
Net interest payable in the period (excluding fair value movements) was #77
million (2006: #70 million), including an indexation charge on index linked debt
of #12 million (2006: #4 million). The increase in net interest payable reflects
the #102 million increase in net debt since last year and the impact of higher
inflation on the indexation charge on indexed linked debt.
Profit before taxation (but before the fair value movements on financial
instruments) was #13 million, some #9 million down on last year's #22 million,
primarily reflecting increased charges for the maintenance of our pipe and sewer
networks. After allowing for the movement in the fair value of financial
instruments, the total profit before tax was #16 million (2006: #36 million).
There was a taxation credit for the period of #20 million (2006: #11 million
charge), comprised entirely of deferred tax.
As at 30 September 2007, Glas Cymru had cash, short-term deposits and undrawn
syndicated bank facilities of #444 million, giving the Company a high level of
financial liquidity. As a result, we have not been affected by the recent
turmoil in credit markets and our bonds continue to trade well relative to our
peers.
Review of the business
--------------------------------------------------------------------------------
Customer service, water quality and environmental quality
Our results for the first six months of this year show that we are maintaining
our overall good performance. Performance highlights include:
* On health & safety, we have seen a 28% reduction in reportable
accidents.
* In 2007, Wales had a record 49 Blue Flag beaches and marinas, around a
third of the UK total.
* A reduction in the number of serious pollution incidents.
* Fewer customers suffering from internal sewer flooding as a result of
blockages, collapses and overloaded sewers.
* Best ever compliance with the standards for iron in water - a result of
more than 1,000 km of water mains being replaced or renewed since April
2005.
* Good progress made in terms of leakage reduction and we are currently on
course to meet the target for 2007/08,with 50 leaks and bursts being
repaired every day.
* Water efficiency campaign for Wales launched in conjunction with the
Environment Agency, Consumer Council for Water Wales and the Countryside
Commission for Wales.
* Independent research confirms continuing high customer satisfaction with
the overall service provided by Welsh Water.
The unprecedented summer rainfall created significant operational challenges for
both our water and sewerage services. The heavy rain affected our compliance
with EU standards for bathing beaches and resulted in elevated levels of raw
water colour. Maintaining performance at our high levels is a constant challenge
and we are particularly focused on seeking further improvement, in particular in
the performance of our sewerage network. Our consistent good performance over
the past six years reflects a sustained commitment to improving services for
customers, but our target remains to be consistently in the top quartile of the
sector.
Capital investment programme
Capital investment (including infrastructure renewals expenditure) was #131
million before grants and contributions (2006: #115 million). Overall
expenditure to date of #636 million is broadly in-line with Welsh Water's #1.3
billion AMP4 capital investment programme to deliver 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
* 1,043 kms of water mains replaced or refurbished
* 174 sewer overflows improved
* the risk of repeat sewer flooding reduced for 262 properties
* 4 water treatment works schemes to improve drinking water quality will
be complete by the end of this year
* #31m spent in the delivery of our #75m programme to improve customer
service and operational efficiency
* #172m spent on the maintenance of our water and sewerage assets.
Summary of key measures of service performance
Period to 30 Period to 30
September 2007 September 2006
Levels of Service
Properties "at
risk" of receiving
low pressure 404 636
Unplanned water
supply
interruptions (note) 7,274 207
Properties "at
risk" of sewage
flooding 438 515
Sewage flooding
incidents -
hydraulic overload
("1 in 10 year
storms") 26 45
Sewage flooding
incidents - other
causes 67 105
Billing enquiries
answered within 5
days 99.99% 99.99%
Written complaints
answered within 10
days 99.4% 99.6%
Number of written
complaints
received 5,314 5,248
Customer meters
read within year 97.3% 97.8%
Water Quality
Overall water
quality compliance
'at the tap'(*) 99.9% 99.9%
Bacteriological
compliance 'at the
tap'(*) 99.6% 99.4%
Iron compliance
'at the tap'(*) 99.5% 99.0%
Operational
Performance
Index(*) 99.6% 99.8%
Environment
Leakage
(m(3)/km/day) 7.3 8.0
Number of
'Category 1 and 2'
pollution
incidents(*) 7 11
Number of
'Category 3'
pollution
incidents(*) 197 157
Customers served
by compliant
wastewater
treatment works(*) 99.8% 99.8%
Wastewater
treatment works
complying with
consents 99.3% 98.9%
Sewage sludge
recycled
satisfactorily 100% 100%
'Mandatory'
coastal bathing
water compliance 98% 99%
'Guideline'
coastal bathing
water compliance 87% 89%
(*) Calendar year to end September 2007
Note: 6850 unplanned water supply interruptions resulted from the flooding at
the Whitbourne water treatment works in Herefordshire . Due to the exceptional
weather the works was flooded and shut down for more than 48 hours.
Consolidated income statement
Six months Six months Year ended
--- ended ended
30 September 30 September 31 March
2007 2006 2007
Note #m #m #m
Revenue 2 307.3 287.2 578.0
Operating costs :
- Operational
expenditure (113.8) (116.7) (228.6)
- Infrastructure
renewals expenditure (43.0) (31.0) (84.1)
- Depreciation and
amortisation (60.9) (48.2) (111.8)
Profit on disposal of
fixed assets 0.7 - -
------ ------- -------
Operating profit 90.3 91.3 153.5
Interest payable and
similar charges 3a (81.3) (72.0) (159.1)
Interest receivable 3a 4.3 2.5 7.4
Fair values gains on
financial instruments 3b 2.3 13.9 45.7
----- ------ ------
(74.7) (55.6) (106.0)
------ ------- -------
Profit before 15.6 35.7 47.5
taxation
Taxation 4 19.9 (10.9) (14.2)
------ ------- -------
Profit after taxation 35.5 24.8 33.3
====== ======= =======
Profit before tax excluding fair value gains on
financial 13.3 21.8 1.8
instruments
Impact of fair value gains on financial instruments 2.3 13.9 45.7
Profit before taxation 15.6 35.7 47.5
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
2007 2006 2007
Note #m #m #m
Assets
Non-current assets
Property, plant & equipment 6 2,858.6 2,819.5 2,846.9
Intangible assets 5 11.5 4.9 7.0
Financial assets:
- derivative financial
instruments 12.6 7.3 14.7
------- ------- -------
2,882.7 2,831.7 2,868.6
------- ------- -------
Current assets
Trade and other receivables 7 116.6 103.4 90.4
Financial assets:
- held to maturity investments 0.6 0.3 -
- derivative financial
instruments 3.0 0.4 4.2
Cash and cash equivalents 108.4 46.9 158.0
------- ------- -------
228.6 151.0 252.6
------- ------- -------
Liabilities
Current liabilities
Financial liabilities:
- borrowings (69.3) (122.3) (65.8)
- derivative financial
instruments (0.8) (4.8) (38.8)
Trade and other payables 8 (104.2) (103.0) (101.5)
------- ------- -------
(174.3) (230.1) (206.1)
------- ------- -------
Net current assets/
(liabilities) 54.3 (79.1) 46.5
Non-current liabilities
Financial liabilities:
- borrowings (2,530.3) (2,313.8) (2,520.0)
- derivative financial
instruments (35.9) (90.6) (36.0)
Trade and other payables 8 (2.5) - (2.5)
Retirement benefit obligations (1.5) (6.6) (5.5)
Provisions (8.7) (11.3) (8.6)
------- ------- -------
(2,578.9) (2,422.3) (2,572.6)
------- ------- -------
Net assets before deferred tax 358.1 330.3 342.5
Deferred tax (368.5) (384.7) (388.4)
------- ------- -------
Net liabilities (10.4) (54.4) (45.9)
======= ======= =======
Reserves
Retained earnings (10.4) (54.4) (45.9)
------- ------- -------
Total reserves 10 (10.4) (54.4) (45.9)
======= ======= =======
Consolidated cashflow statement
Six months Six months Year ended
ended ended
30 September 30 September 31 March
2007 2006 2007
#m #m #m
Operating profit 90.3 91.3 153.5
Adjustments for:
Depreciation 60.9 48.2 111.8
Profit on disposals of
fixed assets (0.7) - -
Changes in working capital:
Increase in trade and other
receivables (27.7) (18.6) (3.4)
Decrease in trade and other
payables (0.1) (3.9) (14.0)
Decrease in pension deficit (4.0) - (1.1)
Increase/(decrease) in
provisions 0.1 1.7 (1.2)
------ ------- -------
Cash generated from
operations 118.8 118.7 245.6
Interest received 5.0 2.7 7.1
Interest paid (105.3) (20.2) (73.7)
Tax paid - - -
------ ------- -------
Net cash inflow from
operating activities 18.5 101.2 179.0
------ ------- -------
Cash flows from investing activities
Purchase of property, plant
and equipment (86.8) (98.0) (188.7)
Grants and contributions
received 11.6 11.3 22.5
Proceeds from sale of
property, plant and
equipment 0.7 - -
------ ------- -------
Net cash used in investing
activities (74.5) (86.7) (166.2)
------ ------- -------
Net cash (outflow) / inflow
before financing activities (56.0) 14.5 12.8
Cash flows from financing activities
Long term loans and finance
leases received - - 32.2
Authorised loan movement (2.2) 12.3 (45.3)
Bonds issued - - 150.0
Capital element of finance
lease payments - - (5.5)
(Increase)/ reduction in
financial assets (0.6) - 0.3
Other loan repayments - - (0.5)
------ ------- -------
Net cash (used) /generated
in financing activities (2.8) 12.3 131.2
------ ------- -------
(Decrease)/ increase in net
cash (58.8) 26.8 144.0
Net cash at start of period 158.0 14.0 14.0
------ ------- -------
Net cash at end of period 99.2 40.8 158.0
------ ------- -------
1. Basis of preparation
The interim report and accounts are for the six months ended 30 September 2007
and have been prepared in accordance with the Disclosure and Transparency Rules
of the Financial Services Authority and with IAS 34, 'Interim financial
reporting' as adopted by the European Union. The interim report and accounts
should be read in conjunction with the annual financial statements for the year
ended 31 March 2007, which have been prepared in accordance with IFRSs as
adopted by the European Union.
These financial statements are unaudited but have been formally reviewed by the
auditors and their report is set out on page 12. The interim financial results
do not comprise statutory accounts within the meaning of Section 240 of the
Companies Act 1985. The results shown for the year ended 31 March 2007 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 2007 2006 2007
#m #m #m
Interest payable on bonds (40.2) (42.9) (84.5)
Indexation on index-linked
bonds (12.4) (3.9) (23.0)
Interest payable on finance
leases (21.8) (18.1) (33.8)
Interest payable on other
loans (6.6) (6.6) (16.9)
Amortisation of bond issue
costs (0.3) (0.5) (0.9)
------- ------- -------
Total interest payable (81.3) (72.0) (159.1)
Interest receivable 4.3 2.5 7.4
------- ------- -------
Net interest payable before
fair value adjustments (77.0) (69.5) (151.7)
------- ------- -------
Six months Six months Year ended
ended ended
30 September 30 September 31 March
3b). Fair value
gains/(losses) on financial
instruments 2007 2006 2007
#m #m #m
Fair value gains on
interest rate swaps 6.5 12.2 34.9
Fair value gains/(losses)
on index linked swaps (4.2) 1.7 10.8
------- ------- -------
Fair value gains on
financial instruments 2.3 13.9 45.7
Tax effect of fair value
(gains) on financial
instruments (0.7) (4.2) (13.7)
------- ------- -------
Net of tax impact of fair
value gains on financial
instruments 1.6 9.7 32.0
------- ------- -------
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.
The notional value of the interest rate swaps are #192m (2006: #625m) and the
index linked swaps are #679m (2006: #587m). During the period #433 million
(notional value) of surplus interest rate swaps were terminated at a cost of
#32.5 million.
4. Taxation
30 September 30 September 31 March
2007 2006
2007
#m #m #m
Tax on profit comprises:
Corporation Tax - (0.4) -
Deferred Tax at 28% (6.0) (10.5) (14.2)
Deferred tax rate change 25.9 - -
-------- --------- ---------
Taxation credit /(charge) 19.9 (10.9) (14.2)
-------- --------- ---------
The company does not expect to pay corporation tax on its trading profits for
the current year due to the availability of capital allowances on its investment
programme.
The deferred tax credit for the six months reflects :
a) the effective deferred tax rate expected to apply for the full year to
31 March 2008; and
b) the impact of the corporation tax rate change from 30% to 28% enacted
in the Finance Act 2007.
Other proposed tax changes announced in this year's Budget have not yet been
enacted and are therefore not reflected in these accounts. In particular, the
proposed abolition of industrial buildings allowances will lead to a significant
increase in the deferred tax provision.
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 2007 57.7 (50.7) 7.0
Additions 5.0 - 5.0
Amortisation charge for the period - (0.5) (0.5)
-------- --------- ---------
At 30 September 2007 62.7 (51.2) 11.5
-------- --------- ---------
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 2007 32.9 1,412.7 2,118.1 218.2 3,781.9
Additions net
of grants and
contributions - 20.8 47.6 3.7 72.1
------ -------- ------- ------- -------
At 30
September 2007 32.9 1,433.5 2,165.7 221.9 3,854.0
------ -------- ------- ------- -------
Accumulated depreciation
At 1 April 2007 15.9 71.2 691.1 156.8 935.0
Charge for the
period - 15.7 43.5 1.2 60.4
------ -------- ------- ------- -------
At 30
September 2007 15.9 86.9 734.6 158.0 995.4
------ -------- ------- ------- -------
Net book value
At 30
September 2007 17.0 1,346.6 1,431.1 63.9 2,858.6
------ -------- ------- ------- -------
At 31 March
2007 17.0 1,341.5 1,427.0 61.4 2,846.9
------ -------- ------- ------- -------
7. Trade and other receivables
30 September 30 September 31 March 2007
2007 2006
#m #m #m
(a) Amounts falling due within one
year:
Trade receivables 101.6 94.0 84.7
Less provision for
impairment of
receivables (56.7) (52.0) (53.0)
--------- --------- -------
Trade receivables -
net 44.9 42.0 31.7
Other receivables 5.8 5.2 5.2
Prepayments and
accrued income 65.9 56.2 53.5
--------- --------- -------
116.6 103.4 90.4
--------- --------- -------
8. Trade and other payables
30 September 30 September 31 March
2007 2006 2007
Current #m #m #m
Trade payables 12.0 18.0 12.3
Capital creditors 43.8 31.4 41.9
Deferred income 0.3 - 0.4
Other taxation and social security
costs 0.3 0.3 0.3
Other payables 47.8 53.3 46.6
---------- ---------- ---------
104.2 103.0 101.5
---------- ---------- ---------
Non -current
---------- ---------- ---------
Deferred income 2.5 - 2.5
---------- ---------- ---------
9. Analysis and reconciliation of net debt
a) Net debt at the balance sheet date may be analysed as: 30 September 30 September 31 March
2007 2006
2007
#m #m #m
Bank overdraft (9.2) (6.1) -
Cash and cash equivalents 108.4 46.9 158.0
Financial assets 0.6 0.3 -
--------- --------- --------
99.8 41.1 158.0
--------- --------- --------
Debt due after one year (1,749.6) (1,548.4) (1,739.6)
Debt due within one year (4.7) (85.1) (4.7)
Finance leases (766.8) (740.1) (766.8)
Accrued interest (75.3) (63.1) (81.0)
Unamortised bond issue
costs 6.0 6.7 6.3
--------- --------- --------
(2,590.4) (2,430.0) (2,585.8)
--------- --------- --------
Net debt (2,490.6) (2,388.9) (2,427.8)
--------- --------- --------
9. 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
2007 2006
2007
#m #m #m
Net debt at start period (2,427.8) (2,355.2) (2,355.2)
(Decrease)/increase in net
cash (58.8) 26.8 144.0
Increase/ (decrease) in
financial assets 0.6 - (0.3)
Decrease/ (increase) in
debt 2.2 (12.3) (130.9)
--------- --------- --------
Decrease/(increase) in net
debt arising from cashflows (56.0) 14.5 12.8
Movement in accrued
interest 5.7 (44.1) (62.0)
Amortisation of debt issue
costs (0.3) (0.5) (0.9)
Amortisation of bond issue
premium 0.2 0.3 0.5
Indexation of index-linked
debt (12.4) (3.9) (23.0)
--------- --------- --------
Movement in net debt during
the period (62.8) (33.7) (72.6)
--------- --------- --------
--------- --------- --------
Net debt at end of period (2,490.6) (2,388.9) (2,427.8)
--------- --------- --------
10. Statement of changes in reserves
30 September 30 September 31 March
2007 2006
2007
#m #m #m
Reserves brought forward (45.9) (79.2) (79.2)
Profit for the period 35.5 24.8 33.3
--------- --------- --------
Reserves carried forward (10.4) (54.4) (45.9)
========= ========= ========
Independent review report to Glas Cymru Cyfyngedig
Introduction
We been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2007, which comprises the consolidated income statement, consolidated
balance sheet, statement of changes in reserves, consolidated cash flow
statement and related notes. We have read the other information contained in the
half-yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. This report, including the conclusion, has been prepared for and only
for the company for the purpose of the Disclosure and Transparency 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.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 September 2007 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
8 November 2007
This information is provided by RNS
The company news service from the London Stock Exchange
END
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