Yorkshire Water full-year results show challenges

(by Verity Mitchell)

Yorkshire Water has published full-year results for the year ending 31 March 2026. Revenue grew by 26.2% to £1,639.8m, driven by higher regulatory revenues. EBITDA grew by slightly more – 28% to £686.4m. Profit before tax, however, fell 73% from £429.6m to £113.8m, reflecting the higher interest costs of funding operations and growing investment with index-lined debt.

Capex grew 11% to £989.8m. Yorkshire Water has a total capex programme of £8.3bn for AMP8 so delivered 11.9% of the total in 2025-2026. The company was consistently behind schedule during AMP7 and failed to deliver five improvement projects from its 2020-25 WINEP plans in west Leeds.

Management said that Yorkshire has made progress with 23% of its five-year AMP programme already on site and being delivered. 88 projects have been completed and 89% of projects are in the design stage, with over 1,500 projects either being designed, built or completed.

Net debt increased to £7,585.7m. Gearing was maintained at 72.8%. During the year EQT took a 42% stake in the company. Its contribution will allow a £600m inter-company loan to be repaid by the end of March 2027. This will improve financial resilience and reduce gearing levels. Yorkshire reported that it had surpassed its targets on smart upgrades, and had focused on pressure control valve installation, new technology and smart network installations to reduce water loss. 175km of water mains were replaced in the last 12 months and leakage fell by 18.5% compared to the 2020 baseline – an improvement of 3.4% year on year. Storm overflow operation was down by 24.5% (on a calendar year basis) with average discharges per overflow reducing from 31 to 24. Yorkshire also reduced external sewer flooding by 10.1%, starting 26 different projects to replace sewers across the region and completing three in the last year.

But challenges remain. While the company recorded zero category 1 pollutions, total pollution incidents rose above target to 49.75 incidents per 10,000km of sewer. Yorkshire fell in Ofwat’s Customer Measure of Experience to 12th out of 17 in the league table, from tenth. It earned a net operational Outcome Delivery Incentive penalty of £88.8m over the year.

Although the Environmental Performance Assessment rating for 2025 has been postponed by the Environment Agency until October 2026, management anticipated a reduction to a one-star rating for three reasons: two related to pollution, where performance needs to improve, and the third, a historic issue related to not delivering its WINEP obligations by the end of AMP7.