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
Sport
footballLIVE: All the latest from today's Premier League matches
News
newsNew images splice vintage WWII photos with modern-day setting
Arts and Entertainment
The star dances on a balcony in the video
music
News
Jennifer Lawrence's Katniss Everdeen learns that Peeta is still alive in Mockingjay Part 1
peopleListen to the actress sing in The Hunger Games: Mockingjay Pt 1
PROMOTED VIDEO
News
ebooksNow available in paperback
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

Reach Volunteering: Trustee – PR& Marketing, Social Care, Commercial skills

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...

Reach Volunteering: Charity Treasurer

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...

SThree: Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...

Ampersand Consulting LLP: Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

US immigration: President Obama ready to press ahead with long-promised plan to overhaul 'broken system' - but will it get past a Republican-controlled Congress?

Immigration: Obama's final frontier

The President is ready to press ahead with the long-promised plan to overhaul America's 'broken system' - but will it get past a Republican-controlled Congress?
Bill Cosby rape allegations explained: Why are these allegations coming out now? Why didn’t these women come forward earlier? And why has nobody taken legal action?

Bill Cosby rape allegations explained

Why are these allegations coming out now? Why has nobody taken legal action? And what happens next for the man once thought of as 'America's Dad'
Four years of excruciating seizures caused by the 1cm tapeworm found burrowing through a man's brain

You know that headache you’ve got?

Four years of excruciating seizures caused by the 1cm tapeworm found burrowing through a man's brain
Travelling to work by scooter is faster than walking and less sweaty than cycling, so why aren’t we all doing it?

Scoot commute

Travelling to work by scooter is faster than walking and less sweaty than cycling, so why aren’t we all doing it?
Paul Robeson: The story of how an American icon was driven to death to be told in film

The Paul Robeson story

How an American icon was driven to death to be told in film
10 best satellite navigation systems

Never get lost again: 10 best satellite navigation systems

Keep your vehicle going in the right direction with a clever device
Paul Scholes column: England must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil

Paul Scholes column

England must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil
Michael Dawson: I’ll thank Spurs after we win says defender as he prepares to return with Hull

Michael Dawson: I’ll thank Spurs after we win

Hull defender faces his struggling former club on Sunday ready to show what they are missing. But he says he will always be grateful to Tottenham
Frank Warren column: Dr Wu has big plans for the professionals yet he should stick to the amateur game

Frank Warren column

Dr Wu has big plans for the professionals yet he should stick to the amateur game
Synagogue attack: Fear unites both sides of Jerusalem as minister warns restoring quiet could take 'months'

Terror unites Jerusalem after synagogue attack

Rising violence and increased police patrols have left residents of all faiths looking over their shoulders
Medecins sans Frontieres: The Ebola crisis has them in the headlines, but their work goes far beyond West Africa

'How do you carry on? You have to...'

The Ebola crisis has Medecins sans Frontieres in the headlines, but their work goes far beyond West Africa
Isis extends its deadly reach with suicide bombing in Kurdish capital

Isis extends its deadly reach with suicide bombing in Kurdish capital

Residents in what was Iraq’s safest city fear an increase in jihadist attacks, reports Patrick Cockburn
Underwater photography competition winners 2014 - in pictures

'Mysterious and inviting' shot of diver wins photography competition

Stunning image of cenote in Mexico takes top prize
Sir John Major: Negative West End portrayals of politicians put people off voting

Sir John Major hits out at theatres

Negative West End portrayals of politicians put people off voting
Kicking Barbie's butt: How the growth of 3D printing enabled me to make an army of custom-made figurines

Kicking Barbie's butt

How the growth of 3D printing enabled toy-designer to make an army of custom-made figurines