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
PROMOTED VIDEO
Life and Style
fashionHealth concerns and 'pornified' perceptions have made women more conscious at the beach
Arts and Entertainment
tv
Sport
Ojo Onaolapo celebrates winning the bronze medal
commonwealth games
Arts and Entertainment
Rock band Led Zeppelin in the early 1970s
musicLed Zeppelin to release alternative Stairway To Heaven after 43 years
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmHe was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
Sport
Van Gaal said that his challenge in taking over Bobby Robson's Barcelona team in 1993 has been easier than the task of resurrecting the current United side
footballA colourful discussion on tactics, the merits of the English footballer and rebuilding Manchester United
Life and Style
Sainsbury's could roll the lorries out across its whole fleet if they are successful
tech
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Travel
The shipping news: a typical Snoozebox construction
travelSpending the night in a shipping container doesn't sound appealing, but mobile crash pads are popping up at the summer's biggest events
Arts and Entertainment
'Old Fashioned' will be a different kind of love story to '50 Shades'
film
Arts and Entertainment
Tracey Emin's 'My Bed' is returning to the Tate more than 15 years after it first caused shockwaves at the gallery
artTracey Emin's bed returns to the Tate after record sale
Arts and Entertainment
Smart mover: Peter Bazalgette
filmHow live cinema screenings can boost arts audiences
Environment
Neil Young performing at Hyde Park, London, earlier this month
environment
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

Project Manager (HR)- Bristol - Upto £400 p/day

£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...

Graduate / Trainee Recruitment Consultant - IT

£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...

HR Business Partner - Banking Finance - Brentwood - £45K

£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...

PA / Team Secretary - Wimbledon

£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...

Day In a Page

Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
How live cinema screenings can boost arts audiences

How live cinema screenings can boost arts audiences

Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash
Shipping container hotels: Pop-up hotels filling a niche

Pop-up hotels filling a niche

Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events
Native American headdresses are not fashion accessories

Feather dust-up

A Canadian festival has banned Native American headwear. Haven't we been here before?
Boris Johnson's war on diesel

Boris Johnson's war on diesel

11m cars here run on diesel. It's seen as a greener alternative to unleaded petrol. So why is London's mayor on a crusade against the black pump?
5 best waterproof cameras

Splash and flash: 5 best waterproof cameras

Don't let water stop you taking snaps with one of these machines that will take you from the sand to meters deep
Louis van Gaal interview: Manchester United manager discusses tactics and rebuilding after the David Moyes era

Louis van Gaal interview

Manchester United manager discusses tactics and rebuilding after the David Moyes era
Will Gore: The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series

Will Gore: Outside Edge

The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series
The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz