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We focus on a range of financial and operational KPIs to help assess our performance. We believe that the KPIs defined below provide a rounded view as to how we are performing against our primary objectives, helping us on our path to reaching our long-term strategic vision. These KPIs encompass the important areas of customer service and environmental performance, as well as financial indicators, taking into consideration the interests of all of our stakeholders.

Financial KPIs

In respect of our financial KPIs, we use underlying profit measures as these enable more meaningful comparisons of the year-on-year performance of our business.

KPIDefinitionPerformance
RevenueA definition of revenue is included in Accounting policies.

£1,720m +1.9%

Ar Uu Kpi Revenue

Regulatory capital expenditureTotal regulatory capital expenditure during the year (including infrastructure renewals expenditure).

£869m +3.9%

Ar Uu Kpi Captial Expenditure

Underlying operating profitThe underlying operating profit measure excludesd from the reporterated profit any restructuring costs and other significant non-recurring items. A reconciliation is shown in Our performance 2014/15.

£664m +4.7%

Ar Uu Kpi Underlying Operating Profit

Underlying earnings per shareThis measure deducts underlying net finance expense and underlying taxation from underlying operating profit to calculate underlying profit after tax and then divides this by the average number of shares in issuance during the year. Underlying net finance expense makes adjustments to the reported net finance expense, including the stripping out of fair value movements. Underlying taxation strips out any prior year adjustments, exceptional tax or any deferred tax credits or debits arising from changes in the tax rate from reported taxation. Reconciliations to the underlying measures above are shown in Our performance 2014/15.

51.9p +16.1%

Ar Uu Kpi Underlying Earnings Per Share

Dividend per shareThis measure divides total dividends declared by the average number of shares in issuance during the year.

37.70p +4.6%

Ar Uu Kpi Dividend Per Share

Gearing: net debt to regulatory capital value

Group net debt (including derivatives) divided by UUW’s regulatory capital value (Ofwat’s published RCV in outturn prices adjusted for actual capital expenditure to date).

Ofwat’s assumed range for 2010–15 is 55% to 65%.

59% +1%

Ar Uu Kpi Gearing

Operational KPIs

These operational KPIs feed through from all of our strategic themes: the best service to customers; at the lowest sustainable cost; and in a responsible manner.

Company objective/KPIDefinitionTargetPerformance
Best service to customers
ServiceabilityOfwat rates each company’s assets as ‘improving’, ‘stable’, ‘marginal’ or ‘deteriorating’ across four categories covering water and wastewater infrastructure and non-infrastructureTo hold at least a stable rating for all four asset classes, which is consistent with Ofwat’s target2014/15: 2 x improving, 2 x stable
2013/14: 1 x improving, 3 x stable
2012/13: 1 x improving, 3 x stable
2011/12: 1 x improving, 2 x stable. 1 x marginal
2010/11: 3 x stable, 1 x marginal
Service incentive mechanism – qualitativeOfwat derived index based on quarterly customer satisfaction surveys, measuring the absolute and relative performance of the 19 water companies (previously 21 up to 2012/13). Each company receives a score in the range of zero to five, with five being the highest attainable scoreTo move to the first quartile in the medium-term

Significant improvement recognised by Ofwat in the final determination

Ar Uu Kpi Service Incentive Qualititve

Service incentive mechanism – quantitativeOfwat derived composite index based on the number of customer contacts, assessed by type, measuring the absolute and relative performance of the 19 water companies (previously 21 up to 2012/13). Each company receives a SIM point total, where the lowest score represents the best performanceTo move to the first quartile in the medium-term

Significant improvement recognised by Ofwat in the final determination

Ar Uu Kpi Service Incentive Quantative Final

 

Lowest sustainable cost
Opex outperformanceProgress to date on cumulative operating expenditure outperformance versus Ofwat’s allowed operating costs over the 2010–15 periodTotal opex outperformance over the 2010–15 period of at least £50m2010–15: Exceeded £50m target
Financing outperformanceProgress to date on financing expenditure outperformance secured versus Ofwat’s allowed cost of debt of 3.6% real over the 2010–15 periodTotal financing outperformance over the 2010–15 period of at least £300m2010–15: Exceeded £300m target
Capex outperformanceCapital expenditure (excluding private sewers and transitional investment) progress to date against Ofwat’s capital expenditure allowance for the 2010–15 period, after adjusting, through the regulatory methodology, for the impact of construction output pricesTo meet Ofwat’s revised capital expenditure allowance for the 2010–15 period (after reinvesting around £200m of outperformance)2010–15: Reinvested over £200m of outperformance

 

Responsible manner
Leakage – average annual leakageAverage annual water leakage from our network quantified in megalitres per dayTo meet our regulatory leakage target, as set by Ofwat, each year2014/15: 454Ml/d – Met target
2013/14: 452Ml/d – Met target
2012/13: 457Ml/d – Met target
2011/12: 453Ml/d – Met target
2010/11: 464Ml/d – Met target
Environment Agency performance assessmentComposite assessment produced by the Environment Agency, measuring the absolute and relative performance of the 10 water and wastewater companies across a broad range of areas, including pollution.To be a first quartile performer on a consistent basis

Delivered another upper quartile performance in 2013/14 (latest available) assessment

Dow Jones Sustainability Index ratingIndependent rating awarded using sustainability metrics covering economic, environmental, social and governance performanceTo retain ‘World Class’ rating each year2014/15: ‘World Class’
2013/14: ‘World Class’
2012/13: ‘World Class’
2011/12: ‘World Class’
2010/11: ‘World Class’

Our performance and the progress we have made against our objectives and their associated KPIs are included in Our performance 2014/15.