Outlook: Poor old Mr Hawker is on a Hyder to nothing

IT NEVER rains in the Welsh valleys but, boyo, does it pour. Hyder, the unfortunate owner of Welsh Water and Swalec, has declined in value by two-thirds over the past year, underperforming even the soggiest of industry sectors as our graphic shows. Now the dividend is being axed along with another 1,000 jobs and the electricity business put up for sale, leaving the group's ill-fated multi-utility strategy in tatters and the chief executive's job on the line.

But is Graham Hawker chastened? Not a bit of it. In fact, it is water off a duck's back Extraordinarily for someone who has presided over such a heroic destruction of shareholder value, Mr Hawker remains rather pleased with himself.

Only in the narrowest of senses, has his strategy been vindicated, in that Hyder has met all its cost reduction targets. But it has been like pushing water up hill. While Mr Hawker and his chums in Cardiff have been slapping themselves on the back over the manpower reductions achieved by forcing water and electricity to mix, no-one has noticed the ship sinking under its sea of debt.

Now that they belated have spotted the leaks in the balance sheet, it is all hands to the pump. Not only is Hyder looking at a bumper rights issue to keep its head above water, but everything and anything is up for sale in a desperate bid to lighten the load. True to form, Mr Hawker looks upon this as decisive management action. Others look agog at how Hyder overstretched itself in the first place, paying pounds 821m for Swalec in 1996 and doubling its exposure to regulatory risk into the bargain.

Mr Hawker reckons no-one could reasonably have foreseen the clobbering the utility sector would take, first from the windfall tax and then a series of swingeing regulatory price reviews. Perhaps they never read the opinion polls in south Wales showing Labour ahead by a country mile and Gordon Brown preparing to pounce with his well-trailed levy.

Hyder has had to contend with Ofwat and Ofgem and the Environment Agency. There is a certain irony now in the fact that it could be the Welsh Assembly which delivers the coup de grace by imposing an even bigger environmental clean-up programme on Welsh Water than Mr Byatt proposes.

Blase beyond belief, Mr Hawker, shrugs all this off and says he detects no shareholder pressure to resign. He is, he says, fond of gardening but not ready to take it up permanently. But horticulturally speaking his strategy is six feet under which is also where the chief executive surely ought to be.