It’s been another busy year for the Company and, as many will be aware, we’ve also had an additional focus on managing the strategic review initiated by our previous shareholders, Sumitomo Corporation and Osaka Gas.
This strategic review concluded in the purchase of the Company by Pennon Group plc at the start of 2024 and approval of the merger by the CMA on 14 June 2024. We’re excited about the opportunities our new shareholder will bring to the business and our customers, and on behalf of the Board and the Company I would like to thank Sumitomo Corporation and Osaka Gas for the strong support over their many years of ownership of our Company.
The Board and I take our obligations for good corporate governance extremely seriously and these standards are kept under continuous review. As ever, the strength and depth of the Company means it is well placed to progress in what has become an increasingly challenging sector to operate in.
Both our Environmental Scrutiny Panel (ESP) and our Customer Scrutiny Panel (CSP) continue to consistently scrutinise and challenge the work we do. Both groups play a key role in monitoring our performance and challenge the progress of our improvement plans. We welcome their constructive feedback, and I would like to thank the members on both panels for their continued support.
Overall, I’m proud that we’ve continued to deliver industry leading water quality – the foundation and core responsibility of any water company.
We’ve also advanced innovation and have started seeing the benefits from the deployment of our smart network technology, helping us to achieve our target for leakage reduction. In fact, our smart network has enabled us to reduce our leakage by nearly 15% since 2020.
Just as important has been assisting our customers wherever we can through our financial support schemes and priority services register, providing the extra care to those customers that need it. In moments where customers have been affected by burst pipes, I’ve witnessed great compassion and dedication among our teams to go the extra mile and be there for our customers.
I’m also proud of the operational teams who manage our network 24/7 and who have kept the supplies running throughout adverse weather conditions across the year, ranging from especially dry periods in the summer to a very wet winter. With the ever-changing climate a constant reminder, what I have seen this year has just re-confirmed my confidence in our teams being prepared for any situation.
In addition, our water resources put us in good stead for the summer months ahead, following an especially wet winter, and we are proud to have not implemented a hosepipe ban within our supply area for over a decade.
And while managing all the above I’ve been consistently impressed by our ability as a team to develop and submit an exciting and ambitious PR24 submission, alongside our visionary long-term delivery strategy. Through the deployment of cutting-edge technology we are planning to balance the needs of a growing population and focus on the environment, while delivering industry leading water quality for decades to come. It’s all about the best quality water all day, every day, today, tomorrow and into the future.
With customers in mind I’m not only pleased with what we have done to deliver high-quality water every day, but also the part the team has played in many community outreach programmes, from our education programme to community support, assisting those who require that extra little bit of help.
We’ve also held more community events and developed more partnerships with local charities and groups than ever before, and this has helped us forge a closer bond with our customers. It has been positive to hear some of the feedback received from these events, which also provides us with valuable customer insight, although we acknowledge there is more to be done here to raise levels of customer satisfaction.
With our smaller size, and being focused on providing drinking water only, we can be agile, fast, risk-taking and innovative. This has allowed us to develop a close relationship with our communities and push the boundaries of technology for the greater good of our customers, water network and the industry as a whole.
The Board has also maintained a close working relationship with our regulator Ofwat and other key stakeholders, such as Consumer Council for Water (CCW), keeping them regularly apprised of important business matters.
It’s pleasing to see our recent efforts on debt and equity raising have improved the liquidity and financial resilience of the Company. However there continues to be significant adverse pressure on overall financial results from escalating operational costs due to inflation and meeting performance commitments.
Cost of living and macro-economic conditions have also hit cash collections and therefore have increased our bad debt provision in the year. It’s also worth noting no dividends were paid to our shareholders this year.
Meanwhile we’ve continued to make great strides in enhancing and protecting the biodiversity across all our operational sites, and I was delighted to see us achieve a third Biodiversity Benchmark Award from The Wildlife Trusts – this time for our water treatment works at Bough Beech Reservoir. We remain the only UK water company to hold this prestigious award, which is a fantastic achievement.
In summary, our performance has been good in a very demanding year, and I would like to thank the SES Water team for all they have done and the dedication to the future plans which they exhibit every day. Working in an industry which is rightly scrutinised from all angles requires the workforce to have a great deal of resilience and determination and it is a testament to this team that we continue to be a high-performing Company. Great job team.
Dave Shemmans
Chair
