Utility Week

UTILITY WEEK | 14TH - 20TH DECEMBER 2018 | 19 This week Stock watch 720 710 700 690 680 UNITED UTILITIES SHARE PRICE, FIVE DAY PENNON GROUP SHARE PRICE, FIVE DAY Water company shares took a hit on Monday aer Theresa May postponed a parliamentary vote on the Brexit deal negotiated by the government, heightening concerns among investors that the Labour party could take power and enact its agenda to renationalise the sector. By the close of trading, United Utilities and Pennon Group shares had both dropped by around 2 per cent to 737p and 696p respectively. 770 760 750 740 730 6 Dec 7 Dec 10 Dec 11 Dec pence pence Finance & Investment Thames Water profits plunge by 69 per cent Extreme weather is a 'wake-up call' for water companies and society The Beast from the East and the prolonged summer heatwave have delayed Thames Water's progress on leakage, despite its "best repair performance" in ten years. The extreme weather contrib- uted to Thames Water's half-year profits falling by 69 per cent to £67.7 million for the six months to 30 September 2018, from £218.5 million in the same period last year. Thames Water's chief executive Steve Robertson told Utility Week the challenges posed by extreme weather are "absolutely a wake-up call" for water companies and wider society. He said events such as the freeze-thaw and the heatwave "signal a new reality" that will require water companies to think of "new and better ways" to address issues such as leakage. "The Beast from the East and the long summer were the worst incidents in the history of Thames Water," he claimed. Despite the ongoing impact of the severe cold spell on the company's leakage performance, he said "a few good things" had come out of it, including the "acceler- ated focus on climate change". While profits fell, the amount of water lost through leakage increased to 683 megalitres a day, compared with 665Ml/day in 2017. The company said it fixed 1,431 leaks per week, up 37 per cent year on year and its best performance since 2008/09. KP ENERGY Bulb named fastest- growing private firm London-based small energy sup- plier Bulb has been named as the UK's fastest-growing private company. Online investment company SyndicateRoom's "Top 100" report uses a methodology that analyses valuations over time to rank the country's private companies. It uses data provided by independent research firm Beauhurst to create a league table of the private UK compa- nies that have increased in value the most since 2015. The 100 per cent renewable energy supplier topped the list aer increasing its valuation 351 times since it was founded in 2015. Bulb was valued at £351 mil- lion during its last funding round. Bulb received a £60 million injection from two major interna- tional investors in August, which prompted speculation the com- pany might be up for sale. But co-founder and chief executive Hayden Wood told Utility Week: "There is no possibility that [co- founder] Amit and I would even contemplate selling Bulb." ELECTRICITY RAB model could benefit nuclear Greater direct government intervention in backing nuclear projects would expose the sector to the risk of competing with other spending priorities for investment, a senior official has claimed. Hannah Bronwin, deputy director of nuclear financing at the Department for Business, Energy and Industrial Strategy, has defended the government's decision not to extend direct support to the sector beyond its offer earlier this year to explore a stake in Horizon's project at Wylfa in north Wales. Instead, she said the regu- lated asset base (RAB) model, which is currently being used to help finance the Thames Tide- way super sewer project, had many advantages in terms of achieving value for money and promoting competition within the nuclear sector. ENERGY Ratings agency raises its outlook Fitch has raised its outlook for integrated utilities in the UK from "negative" to "stable" due to increasing power prices and clarity over the level of the price cap on default tariffs. Nevertheless, the rating agency said they will still face "significant challenges" as grow- ing investment requirements put pressure on cash flows. Fitch said the rosier outlook was partly supported by steps taken by some companies to strengthen their business models. Robertson: extreme events 'signal a new reality' 6 Dec 7 Dec 10 Dec 11 Dec

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