Yorkshire Water half-year results: still getting organised

(by Verity Mitchell)

Revenue at Yorkshire Water increased by 28% to £833m in the half-year, the result of the increased price allowance for the first year of AMP8. Operating profit increased by 60% to £278.7m.

Capital expenditure fell from £404.3m to £395.8m. The company said that “the marginal decrease is due to the start of the new AMP as we move to the earlier stage of the cycle and are now building up the investment programme.” It stated that a “focus for us over the first six months has been making sure we have the teams in place to deliver the programme successfully,” and has recruited around 500 people to improve customer service. Yorkshire also said it is changing its internal structures to improve planning and delivery processes. It has got 85% of the AMP8 programme into design and is starting on site on some early storm overflow discharge reduction projects, replacing more than 100km of water mains and installing more than 50,000 smart meters. 

In its Annual Performance Report 2024/2025, chief executive Nicola Shaw said: “Over the next five years, we will be spending an average of £3.2m every day on improving water services, tackling pollution and making sure the region’s infrastructure is fit for the future.” This statement implies that Yorkshire must deploy, on average, around £1.1bn every year of AMP8. With a fall in investment compared to the prior period, Yorkshire will have to demonstrate that it is ramping up the pace of investment sufficiently to meet its targets. In AMP7, it was slow to deliver its investment programme compared with its peers. In the six months to 30 September, its debt/RCV ratio increased to 74.2% from 72.5%.

The company flagged that in Ofwat’s Performance Report, it improved in nine of the twelve performance areas during the year but only met the regulator’s performance target in four areas. This led to Yorkshire Water being categorised by Ofwat as a ‘lagging’ company. Yorkshire remained a two-star company in the annual Environmental Performance Assessment.