Financial viability

When you apply for a new appointment we will assess the financial position of your company and your proposal at a site level.

Your company

We need to be sure that your company and any associated group companies will have continued access to sufficient resources to fulfil your duties and obligations as an appointed water company. This includes the availability of external and group finance and any financial security or guarantees that may be in place to protect your customers.

Your proposal

We will also consider whether the site you are proposing is financially viable in its own right. We will consider the specific characteristics of your proposal and its underlying business model. We do not define minimum levels of viability as they will vary depending on the proposal you put forward and the business model you choose.

In assessing the viability risk associated with a particular application we will consider the

  • robustness of your underlying assumptions
  • profitability
  • cash position
  • robustness of your company‚Äôs balance sheet
  • ability to remunerate providers of finance.

When assessing the robustness of your assumptions we will consider the information you provide, and any other information available to us, eg forecast consumption levels.

You may choose to use innovative approaches, for example in the form of new business models and therefore we may review different elements of your submission in more detail. This may affect in particular our assessment of financial viability risk.

Business case

Before we assess financial viability risk, you must provide a comprehensive explanation of your business case, both at company level for your new appointments business as a whole and for the provision of water or sewerage to the particular site. This should identify

  • costs and revenues,
  • business risks
  • risk management

We will not be able to assess financial viability until we have a good understanding of your business case.