South West Water

At a glance

South West Water is the water and sewerage company that serves Devon, Cornwall and parts of Dorset and Somerset.

Operational highlights

South West Water has made a strong start to the K5 five-year regulatory period:

industry-leading performance in tackling leakage
14th consecutive year without water restrictions
near perfect drinking water quality at 99.97%
customer satisfaction levels rose
record percentage (90.3%) of bathing waters achieving EU Guideline (or excellent) standard.

2010/11 notable achievements

The company has delivered on expectations:

stable profit before tax despite the reduced rate of return allowed in the 2009 Ofwat price review
successfully met annual leakage target in spite of the coldest December in England in the last 100 years
resilient network performance during extreme winter conditions
step-change in operating efficiencies of £8.4 million - nearly double the total for 2009/10
working with Government and Ofwat on reducing customer charges following the Government's Walker Review.

Strategy and performance

Under its ‘Pure’ vision of ‘Pure Water, Pure Service and Pure Environment’ South West Water is focused on achieving increased levels of customer service and operational performance whilst at the same time delivering greater efficiency and high levels of social and environmental responsibility.

Where we operate

Where we operate in South West England Location of South West Water’s reservoirs

Strategy	Performance	KPI
Pure Water Providing safe and reliable water supplies	Near perfect drinking water quality. 14th consecutive summer with no water restrictions	Drinking water quality % MZC* Calendar year 2010 99.97 2009 99.98 2008 99.98
Pure Service Increased levels of customer satisfaction Maintaining reliability of assets to protect service improvements made over the last 20 years	Average level of customer satisfaction up. Complaints falling for the second year running with written complaints down a quarter on 2009/10 Stable serviceability** maintained for all service areas. Resilient network performance in extreme winter weather	Customer satisfaction overall % 2010/11 80 2009/10 78 2008/09 81
Pure Environment Protecting and enhancing the environment	A record percentage (90.3%) of bathing waters achieved EU Guideline (or excellent) standard	Bathing water quality Guideline % Calendar year 2010 90.3 2009 84.0
Financial Management Outperformance of regulatory contract Efficient funding	Front-end loaded efficiency savings of £8.4 million, equal to 5.8% per annum. On track to achieve 5% outperformance on the K5 capital programme (using 2009 Final Determination estimates of Construction Output Price Index) Locked-in low cost of borrowing ensures interest outperformance against Final Determination (2010/11 4% on average net debt)	Operating profit £m 2010/11 189.8 2009/10 193.5 ^† 2008/09 186.6

Strategy

Performance

KPI

Pure Water

Providing safe and reliable water supplies

Near perfect drinking water quality. 14th consecutive summer with no water restrictions

Drinking water quality % MZC*
Calendar year

2010 99.97

2009 99.98

2008 99.98

Pure Service

Increased levels of customer satisfaction

Maintaining reliability of assets to protect service improvements made over the last 20 years

Average level of customer satisfaction up. Complaints falling for the second year running with written complaints down a quarter on 2009/10

Stable serviceability** maintained for all service areas. Resilient network performance in extreme winter weather

Customer satisfaction overall %

2010/11 80

2009/10 78

2008/09 81

Pure Environment

Protecting and enhancing the environment

A record percentage (90.3%) of bathing waters achieved EU Guideline (or excellent) standard

Bathing water quality Guideline %
Calendar year

2010 90.3

2009 84.0

Financial Management

Outperformance of regulatory contract

Efficient funding

Front-end loaded efficiency savings of £8.4 million, equal to 5.8% per annum. On track to achieve 5% outperformance on the K5 capital programme (using 2009 Final Determination estimates of Construction Output Price Index)

Locked-in low cost of borrowing ensures interest outperformance against Final Determination (2010/11 4% on average net debt)

Operating profit £m

2010/11 189.8

2009/10 193.5 ^†

2008/09 186.6