Monitoring financial resilience

Having information that is easy to understand and navigate allows customers, and other stakeholders to challenge companies’ performance – and encourages them to deliver better services. This helps everyone build trust and confidence in water.

All monopoly water-only and water and wastewater companies in England and Wales report their performance each year in an annual performance report. This is part of our approach to monitoring and assuring delivery.

One area where we use the information companies publish is to monitor their financial health and stability – their financial resilience. Where necessary, we intervene to protect customers’ interests.

2017-18 performance

We report information on company performance annually and in this report we aim to enhance the visibility and transparency of company financial performance and financial structures in the sector.

This report draws on financial information published by individual companies in their annual performance reports for the year to 31 March 2018 and other publicly available information (e.g. reports from the credit rating agencies). We use this information to highlight key issues for the financial resilience and performance of the sector.

For the first time, this report includes information on a new metric – ‘financial flows’. We set out the requirement for companies to provide greater transparency and clarity about the financial returns to the company’s equity holders each year in IN18/08 – Expectations for companies reporting of financial flows for 2017-18. The financial flows metric looks at the returns that a company’s equity holders achieve, in comparison to the assumed level in price limits that were set in 2014. This year was a pilot year and companies were requested to include a narrative to assist in the explanation and understanding of the data. However, only a few companies have provided explanation and narrative. The expectation going forward is that all companies will include an appropriate explanation as it is a key part of the understanding and interpretation of the data.

Download financial flows metric spreadsheets

2016-17 performance

2015 – 2016 performance