2005 - 2006 - Pinsent Masons Water Yearbook 2012

UNITED KINGDOM PART 3 (ii): COMPANY ANALYSIS: LOCAL/REGIONAL PLAYERS
Northumbrian Water Plc
Northumbrian Water Plc was acquired by Suez in 1996. It was subsequently transformed into the
holding company for all of Suez’s water activities in Britain, along with being the base for their
Anglophone markets. In 2001, Northumbrian Water Group was renamed Ondeo Services UK. The
regulated water and sewerage activities of OSUK consist of the 1996 merger of Northumbrian Water
Services Limited, North East Water Limited and the consolidation of Essex and Suffolk Water Limited.
In May 2003, Suez reduced its stake to 25% through a buyout to a consortium set up by Ecofin
Limited. The company was renamed Northumbrian Water Plc, floated on the AIM and returned to a full
London Stock Exchange Listing in September that year. Suez sold its remaining stake in 2005.
In May 2004, Northumbrian Water arranged a £212 million refinancing based on the securitisation of
its Kielder Water cash flows.
Northumbrian Water, profit and loss account
1/05 - 31/03 (£ million) 2004 2005
UK water 386.2 508.2
International water 17.1 23.1
Group turnover 442.1 578.6
Northumbrian Water Limited 133.4 210.8
International 2.1 2.3
Group operating profit 143.6 204.6
Net interest (92.8) (99.1)
Associates, etc. 2.5 2.2
Group pre-tax profit 45.5 108.8
Minority interests (0.1) 0.5
Net profit 59.4 98.4
Earnings per share (p) 11.5 18.1
Year end change and change of status makes previous figures non-comparable. The actual 2004, 12
month revenues were £520.8 million on a pro forma basis, with pre-tax profits of £54 million.
Northumbrian Water Services Limited
The merger of Northumbrian Water Limited (NWL) with North East Water (acquired by Suez in 1989)
allowed for immediate economies of scale. The only water entity in the region not held by NWG is
Hartlepool Water (92,000 people), which was acquired by AWG in 1997. Essex & Suffolk Water
(acquired by Suez in 1988) was merged with Northumbrian during 2000 and now operates under a
single licence via two divisions, NWL North serving 1.21 million customers (2.6 million people) in the
Northumbrian Water area and NWL South serving 760,000 customers (1.7 million people) in the
Essex & Suffolk Water area. NWL is now the sixth largest water and sewerage company in England
and Wales.
Population served Water Sewerage Total
Northumbrian Water 1,328,000 2,547,000 2,547,000
North East Water 1,195,000 0 1,195,000
Essex & Suffolk Water 1,662,000 0 1,662,000
Total 4,185,000 2,547,000 5,406,000
The company’s £200 million Regional Sludge Treatment Centre at Bran Sands was completed in 2002
and is designed both to treat effluents from 500,000 people and to offer effluent treatment services to
major industrial customers. These include Corus Plc, Shell Plc, and Huntsman & Vopak who signed
contracts in 2003-04 and a 25 year contract with Degussa in 2004-05. Phillips Petroleum signed a 15
year water treatment contract in 2000. In 1999, NWL signed a contract for water provision to all of the
Scottish Courage breweries in the UK.
Northumbrian Water International (NWI)
Suez developed NWG’s international activities so that they address Suez’s potential English speaking
markets. The Australian activities have been kept by Suez.
351 Pinsent Masons Water Yearbook 2005 – 2006