Affinity’s capex on track

(by Verity Mitchell)

Affinity Water’s full-year results to March 2026 revealed operating profit up 125% to £74.7m from revenue of £438.3m, up 20.5%. Operating costs were lower than allowed revenues, up 9.7%, and household bad debt was lower.

The loss after tax fell from £16.8m to £6.2m. Regulatory gearing has fallen from 77.5% to 69.1%, benefiting from the £150m equity injection delivered during the year which will support the board’s continuing commitment to maintain gearing at around 70%.

Affinity has a £2.3bn totex programme for AMP8. Totex of £422m (18%) was invested in 2025/26. £209m of the £900m AMP8 capex target was delivered, focused on leakage management, mains renewals, water treatment and integrated water efficiency programmes.

Numerically, Affinity has failed to meet half of its 16 operational targets, failing on (inter alia) leakage, C-Mex, Compliance Risk Index score, customer contacts on water quality, business and household consumption and times of low pressure. The company had a mixed performance in metering. New household meter installations were 8,107 compared to a target of 17,857, but upgrades were prioritised so exceeded targets. Per capita consumption increased slightly compared to a target reduction of 3.6%, given the warm weather.

The board approved a revised dividend policy, aligned with updated licence requirements which took effect from 1 April 2025. The company forecast regulatory earnings of £47.5m in the year, taking into account the efficiency of investment and operational performance. A dividend of £26m was paid, leaving £21.5m as retained earnings. Additionally, dividends from the company’s non-regulated operations totalling £8.5m were paid in the year.

New chief executive Mike Garth took over at the end of June 2026 and reported  “a strong start to the delivery of this programme: all year-one milestones have been met and the supply chain is fully engaged on key enhancement projects”.