Outlook: Water bunkum
Wednesday 09 June 1999
Poor old Hyder, the owner of Welsh Water, is sinking so fast under its debts that it has pressed the nuclear button and warned that a one-off cut remotely approaching 15 per cent will put it in breach of its banking covenants. Thames is telling the Government and anyone else who will listen that if the regulator soaks the industry in the way he threatens to then the quid pro quo must be a dismantling of the barrier on water company mergers.
Now Severn Trent's Vic Cocker has jumped in by unveiling plans to double the size of its non-regulated business to pounds 1bn a year, thereby reducing its dependence on water and sewage services.
Severn Trent is better placed than many to survive the double whammy of swingeing price cuts and a rising tide of expenditure on environmental improvements. Being landlocked it does not have hundreds of miles of coastline to worry about and, although its territory includes the longest river in the country, even the fish are complaining that Trent water is too clean for comfort.
Fortunately for shareholders, the company was saved from overstretching itself by being blocked from buying Wessex Water. The result is that Severn Trent's dividend and interest cover ought to withstand the worst the regulator can throw at it.
The decision to seek salvation overseas is not so encouraging. As countless other utilities, from National Power to Thames itself can testify, diversification and overseas expansion is rarely the panacea it is cracked up to be. As an antidote to executive boredom, it no doubt has its uses, allowing a jet-setting lifestyle for top managers, big expenses and, until the shareholders catch up with you, an open cheque book for extravagant acquisition making. But that's about it.
Investors and customers alike will thank Mr Cocker more if he sticks to his knitting and concentrates on improving operational efficiency in his core monopoly business.
- 1 Notting Hill Carnival: Woman shares selfie after being ‘punched in face for telling man to stop groping her’
- 2 Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
- 3 Daily Show's Jon Stewart destroys Fox News for its Ferguson coverage
- 4 When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
- 5 Brother and sister, Christopher Buckner and Timothy Savoy, arrested for 'committing incest after watching 'The Notebook''
Ashya King missing: Police hunt five-year-old boy with brain tumour snatched from Southampton hospital by his parents
Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
YouTube video posted by Isis militants shows 'execution of 250 Syrian soldiers'
Botched ice bucket challenge leaves man critically injured after plane drops hundreds of gallons of water
Papua New Guinea Mount Tavurvur volcano eruption sees international flights diverted
Exclusive: We share blame for creating 'jihad generation', says Muslim strategist
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
Ukip Douglas Carswell defection: Tory MP jumps ship to join Nigel Farage
- < Previous
- Next >
iJobs Money & Business
£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...
£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...
£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...
£400 - £500 per day: Orgtel: Test Manager - Banking - West Yorkshire - £400-£5...