Utility Week

UTILITY WEEK | 5TH - 11TH JULY 2019 | 19 This week Thames reports 62% fall in pre-tax profits Pre-tax profit down from £137.4 million last year to £51.6 million in the year to 31 March 2019 Thames Water has reported a 62 per cent fall in pre-tax profit for the year to 31 March 2019, as it ramped up investment and pledged to "rebuild trust" with customers and stakeholders. The company saw under- lying profit before tax fall to £51.6 million – from a restated £137.4 million in the 2017/18 financial year. Profit was down from £218.8 million last year to £89.9 million in the period under review. Under- lying operating profit was £454 million, compared with £505.9 million in 2017/18. Revenue was £2 billion, compared with £2.1 billion last year, while investment in assets increased by £100 million year on year, to £1.2 billion. The company said that over the past 15 years, it has invested £15 billion in the business – on average, triple the annual amount compared with the five years before privatisation. Operating expenditure also rose, with higher employ- ment costs combined with costs associated with adverse weather driving a £60.4 million increase. In its annual report published on 28 June, Thames stressed that yet again no dividends would be paid to external shareholders, although £60 million was paid to its immediate parent company to service group interest obligations and working capital requirements (£55 mil- lion was returned last year). Of its 55 performance commitments set out by Ofwat, Thames Water achieved green status on 54 per cent, amber in 12 per cent of cases and red for 34 per cent of leakage categories. JW ENVIRONMENT City must be at heart of net zero push A ra– of measures was unveiled on 2 July to boost green invest- ment in the UK, including £5.8 billion of climate finance. Launching the new Green Finance Strategy, City minister John Glen stressed that the financial services sector must be at the heart of efforts to reduce emissions to net zero by 2050. The strategy sets out plans to increase investment in sustain- able projects and infrastructure, while setting expectations for publicly listed companies and large asset owners to disclose by 2022 how climate change risk impacts their activities. Glen said this could lead to mandatory disclosures. The plan will also see the establishment of a Green Home Finance Fund to help pilot prod- ucts such as green mortgages (see page 10). The government will also jointly fund the Green Finance Institute with the City of Lon- don, aimed at fostering greater co-operation between the public and private sectors and creating new opportunities for investors. ELECTRICITY SSEN reveals £2.2bn network plans Scottish and Southern Electricity Networks (SSEN) has revealed plans to make its transmission network ready for net zero greenhouse gas emissions. It has published its "network for net zero" plan as part of its dra– RIIO2 business case, which is due to be finally submitted to Ofgem in December. The plan says a minimum investment of £2.2 billion is needed over the RIIO2 period from 2021 to 2026, to meet the needs of electricity generators and customers and to deliver the government's commitment to net zero emissions by 2050. The dra– business plan includes 29 replacement and refurbishment programmes, new warehousing and spares for fast response and risk management of physical and cyber threats. ENERGY Social Energy seeks to raise £50m Start-up Social Energy is looking to raise £50 million to help it break into new markets, including Australia and Japan. The Huddersfield-based firm has teamed with investment banking group Evercore for the fundraising round, which is due to close in August. Social Energy said there is "strong interest" in its home energy trading platform from investors, which uses artificial intelligence to store, manage and distribute the energy generated by solar panels. Time to reflect: Thames pledged to rebuild trust Finance & Investment Stock watch 80 60 40 20 0 SIMEC ATLANTIS ENERGY SHARE PRICE, FIVE DAY 2016 2017 2019 SIMEC ATLANTIS ENERGY SHARE PRICE, FIVE YEAR Shares in Simec Atlantis Energy fell by more than 11 per cent on 28 June aer the developer of the MeyGen tidal power project in Scotland reported a sharp rise in losses – from £10.6 million in 2017 to £24 million in 2018. The company said the increase in losses was partly the result of costs related to the opening of MeyGen in April last year. 18 17 16 15 28 Jun 1 Jul pence pence 2018

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