Highlights
- Sector leading performance in water quality, unplanned outages, and interruptions to supply.
- Successful delivery of the AMP7 enhancement programme and early mobilisation for AMP8.
- Improved financial performance: increased revenue and operating profit, growth in Regulatory Capital Value (RCV).
- Ofwat’s Final Determination is sustainable and deliverable, though challenging and ambitious.
- Financial resilience strengthened with £150m equity injection and £350m green bond issuance. Gearing to be reduced.
Performance for Customers
Affinity Water met most performance commitments for the five-year period to 2025, especially in water supply interruptions and unplanned outages. Significant improvements in the Compliance Risk Index show better water quality, with no standard breaches at treatment works.
In-year leakage performance shows a 19.4% reduction against a 20% target. Higher-than-expected leakage in Summer 2024 followed by Autumn and Winter outbreaks slowed recovery, but recent progress has aligned performance with targets for the new AMP.
On Per Capita Consumption, continued reductions have been achieved through home visits and demand-reduction efforts. Sustained reductions remain a challenge sector-wide. National water supply plans depend heavily on reducing household consumption, and Affinity Water has submitted proposals to the government to support this goal.
Improving Financial Performance
Revenue increased to £363.6m (from £347.7m) and operating profit rose to £33.2m (from £21.8m). Regulatory Capital Value grew to £1.92bn (from £1.85bn), reflecting recent investments.
Investment in Resilience and the Environment
Affinity’s feedback on Ofwat’s Draft Determination contributed to a Final Determination outcome that is ambitious yet achievable. The company will deliver a £2.3bn investment programme over the next five years. Strong supply chain readiness ensures the delivery of the AMP8 programme.
Financial Strength and Strategic Refinancing
Following the Final Determination, shareholders committed £150m in new equity before 31 March 2026 to maintain gearing at around 70%. Additionally, a £350m green bond was successfully issued, reflecting strong sector credit ratings.
CEO Statement
Keith Haslett, CEO of Affinity Water, said:
“I’m delighted with a really strong performance in the crucial last year of the current AMP. Not only does this mean that we’ve delivered on our commitments to customers in the round, but it also means that we’re in a strong position to deliver an even more ambitious programme in the next five years.
I’ve seen a really marked commitment to public service amongst our teams at Affinity and we know how important this is given the current sentiment towards water companies. Our shareholders share this commitment and I am delighted that they’ve backed our plans with new investment to support our delivery in the next five years.”