· Group financial results for the year reflect strong performance:
− Group turnover of £1,819 million, up £66 million (3.7%)
− Group underlying PBIT1 of £525 million, up £22 million (4.3%)
− Group reported PBIT of £544 million, up £39 million (7.8%)
− 2016/17 Return on Regulatory Equity (RoRE) of 11.0%2
− Cash generated from operations up £54 million (6.7%)
− Underlying basic EPS3 of 122.4 pence (up 19.9%), reported basic EPS from continuing operations 140.1 pence (up 4.9%)
− Proposed final dividend of 48.90 pence, taking the 2016/17 dividend to 81.50 pence
· Customers are at the heart of our business:
− Lowest bills: focusing on affordability, lowest combined average bills in Britain of £341 p.a. in 2017/18
− Helping customers: achieved target of helping more than 50,000 vulnerable customers
− Network investments: invested around £680 million in 2016/17 for the future of our network4
− Improved services: including: ahead of regulatory commitments on supply interruptions by 17%, on leakage by 2%, and on sewer flooding by 21% to reach its lowest ever level
· Delivering tangible benefits for all stakeholders:
− Customer ODIs: £47.6 million2 reward reflecting strong operational outperformance, helped by a mild winter
− Efficiencies: £100 million of extra totex savings identified; now forecasting £770 million efficiencies5for AMP66. £610m of these efficiencies now locked in, including a further £70 million identified in H2 2016/17
− Financing: 2016/17 effective interest rate reduced year-on-year by 10 basis points to 4.4%, despite rising RPI; now 100 basis points lower than final year of AMP5
· AMP6 dividend policy upgraded to growth of at least RPI+4%, taking the proposed 2017/18 dividend to 86.55 pence7
1. Underlying Profit before interest and tax (PBIT) excludes exceptional operating items
2. RoRE at 2012/13 prices, and customer ODIs quoted net, pre-tax at 2012/13 prices. RoRE calculated on the same basis as reported in 2015/16. Ofwat are in the process of revising the RoRE calculation methodology
3. Underlying Earnings per Share (EPS) is set out in note 11 to the financial statements
4. Comprises infrastructure renewals expenditure and capital expenditure in our Regulated Water and Waste Water business
5. Efficiencies quoted at actual and forecast nominal prices
6. AMP6 – Asset Management Plan regulatory period 2015 to 2020
7. Based on November 2016 RPI of 2.2%