Yorkshire's rebate tops water rivals

BY MARY FAGAN

Industrial Correspondent

A price war among the utilities escalated yesterday with a pounds 10 customer rebate from Yorkshire Water - the largest single payout in the industry so far.

Yorkshire's so-called "customer dividend" came hot on the heels of Anglian Water's pounds 6 rebate announced on Monday, and an annual reduction of about pounds 8.30 in domestic bills from Seeboard, the electricity firm.

Yorkshire Water denied any pressure to come up with handouts following North West Water's pounds 6.50 annual rebate scheme, unveiled in May.

Trevor Newton, group managing director, said the one-off pounds 10 rebate, at a cost of pounds 20m, is "a demonstration to customers that they can share tangibly in our success".

Yorkshire also predicted pounds 250m in further efficiency savings over the next five years, to be split between customers and shareholders. The pounds 125m for customers will be spent on investment beyond that required under the regulatory regime.

The company will target customers who have very low water pressure and those at risk from sewage flooding as well as leakages from pipes. Yorkshire also hopes to carry out joint projects with the National Rivers Authority to improve river quality in the region.

The company declined to be specific about shareholders' benefit from planned efficiency savings, but added: "In view of the company's performance and strong financial position, shareholders can expect to see further significant increases."

However, Yorkshire also announced plans to seek permission at the annual meeting to buy back 10 per cent of its shares "to add to the range of options available to us".

One City analyst said the customer rebates were a "great success" for Ian Byatt, director general of the water industry regulator, Ofwat. But he warned of the temptation to bow to political pressure and swing benefits too far in favour of customers, which could have long-term implications for shareholders.

Mr Newton said the rebate came from efficiency savings of pounds 150m over the last five years, of which pounds 50m will be used to enhance shareholder dividends.

He said customers had already benefited by pounds 10m from lower charges than allowed under the regulatory regime, and from "extra" investment of pounds 70m in better services and quality. That investment is over and above requirements set by the Government when the company was privatised in 1989.

Mr Newton was speaking as Yorkshire announced a 1 per cent fall in pre- tax profits to pounds 142m in the year to 31 March, after the costs of restructuring and the rebate. Earnings per share dropped by 3.7 per cent to 65.5p but the underlying change is a 20 per cent increase to 87.6p.

The dividend rose by 21.1 per cent to 27.6p. About half of the increase was accounted for by a pounds 5.8m profit from the sale of some of the company's shares in local television operations.

The company shed about 560 jobs in the 12 months and expects to cut the 3,300-strong workforce in the core-regulated business by a further 500 over the next two to three years.

Mr Newton declined to predict what would happen to dividends in future, other than to say there would be "significant" growth. During the last year, the company's non-regulated activities made a profit of pounds 7m after all business development and financing costs. Non-regulated operations include environmental and waste companies.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?