Full Year Results 2024/25

2024/25

2023/24

(Loss)/profit before tax

£(0.4)m

£0.2m

Earnings per share

Loss per share

(6.67p)

(1.67p)

Laura Flowerdew

Group Chief Financial Officer

01392 443 168

James Murgatroyd

Harry Worthington

FGS Global

020 7251 3801

2025

2024

Notes

£m

£m

Operating costs

4

(1.2)

(0.5)

Total net operating costs

(1.2)

(0.5)

Operating loss

(1.2)

(0.5)

Interest payable and similar charges

5

(1.1)

(1.1)

Interest receivable and similar charges

5

2.1

1.8

Total net interest receivable and similar charges

5

1.0

0.7

(Loss) / profit before tax

(0.2)

0.2

Taxation on profit on ordinary activities

6

(0.2)

(0.3)

Loss for the financial year

(0.4)

(0.1)

Loss per ordinary share

7

(6.67)p

(1.67)p

2025

2024

Notes

£m

£m

Loss for the financial year

(0.4)

(0.1)

Other comprehensive income:

Items that will not be reclassified to profit and loss

Actuarial gain on retirement benefit surplus

9

0.1

-

Remeasurement of defined benefit pension scheme restriction

9

0.1

1.2

Other comprehensive income for the year, net of tax

0.2

1.2

Total comprehensive (loss) / profit for the year

(0.2)

1.1

2025

2024

Notes

£m

£m

Non-current assets

Other receivables

8

26.6

26.6

Retirement benefit surplus

9

9.2

9.5

35.8

36.1

Current assets

Trade and other receivables

0.8

0.1

Current tax asset

0.3

0.5

Cash and cash equivalents

0.3

0.7

1.4

1.3

Total assets

37.2

37.4

Non-current liabilities

Borrowings

10

(1.6)

(1.6)

8.75% irredeemable cumulative preference shares

10

(12.5)

(12.5)

(14.1)

(14.1)

Current liabilities

Trade and other payables

(0.1)

(0.1)

(0.1)

(0.1)

Total liabilities

(14.2)

(14.2)

Net assets

23.0

23.2

Equity

Called-up share capital

6.0

6.0

Share premium account

4.4

4.4

Other reserves

5.8

5.8

Retained earnings

6.8

7.0

Total Equity

23.0

23.2

Called up share capital

Share premium

account

Capital redemption

reserve

Retained earnings

Total

£m

£m

£m

£m

£m

Balance at 1 April 2023

6.0

4.4

5.8

148.9

165.1

Loss for the year

-

-

-

(0.1)

(0.1)

Other comprehensive income for the year:

Remeasurement of defined benefit pension scheme

-

-

-

1.2

1.2

Total comprehensive income for the year

-

-

-

1.1

1.1

Ordinary dividends

-

-

-

(143.0)

(143.0)

Balance as at 31 March 2024

6.0

4.4

5.8

7.0

23.2

Balance as at 1 April 2024

6.0

4.4

5.8

7.0

23.2

Loss for the year

-

-

-

(0.4)

(0.4)

Other comprehensive income for the year:

Remeasurement of defined benefit pension scheme

-

-

-

0.2

0.2

Total comprehensive loss for the year

-

-

-

(0.2)

(0.2)

Balance as at 31 March 2025

6.0

4.4

5.8

6.8

23.0

2025

2024

Notes

£m

£m

Cash flows from operating activities

(Loss) / profit before taxation

(0.2)

0.2

Adjustments for:

Difference between pension charges and contributions paid

4

1.1

0.5

Interest income

5

(1.4)

(1.2)

Interest expense

5

1.1

1.1

Pension interest income

5

(0.6)

(0.6)

Decrease in trade and other receivables

-

1.1

Decrease in trade and other creditors

-

(0.8)

Cash generated from operations

-

0.3

Interest paid

(0.1)

(0.1)

Corporation taxes paid

-

(0.1)

Net cash (used in) / generated from operating activities

(0.1)

0.1

Cash flows from investing activities

Interest received

5

0.8

1.6

Net cash generated from investing activities

0.8

1.6

Cash flows from financing activities

Preference dividends paid

5

(1.1)

(1.1)

Net cash used in financing activities

 (1.1)

 (1.1)

Net (decrease) / increase in cash and cash equivalents

(0.4)

0.6

Cash and cash equivalents, beginning of year

0.7

0.1

Cash and cash equivalents, end of year

0.3

0.7

NOTES TO THE FINANCIAL STATEMENTS

1

GENERAL INFORMATION

Bristol Water plc is a public company, limited by shares, with irredeemable preference shares and debenture stock listed on the London Stock Exchange.

The Company is incorporated and domiciled in England, United Kingdom. The address of its registered office is Bridgwater Road, Bristol, BS13 7AT, England.

The financial information for the year ended 31 March 2025 does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. The statutory accounts for the year ended 31 March 2025 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies in due course.

2

BASIS OF PREPARATION

The unaudited financial statements of the Company are prepared on a historical cost basis in accordance with Financial Reporting Standard 101, 'Reduced Disclosure Framework - Disclosure exemptions from EU-adopted IFRS for qualifying entities' ("FRS 101") and with the provisions of the Companies Act 2006.

The preparation of financial statements in conformity with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The accounting policies adopted have not changed significantly from those adopted in the Company's 2024 Annual Report and Financial Statements (which are available on the Company's website www.bristol water.co.uk).

New standards and interpretations not yet adopted

New standards or interpretations which were mandatory for the first time in the year beginning 1 April 2024 did not have a material impact on the net assets of the Company.

New standards or interpretations due to be adopted from 1 April 2025 are not expected to have a material impact on the Company's net assets or results. 

3

GOING CONCERN

The Company's obligations are met from matching intra-group contracted assets and related receipts. The Company has received confirmation from Pennon Group plc that it will provide support to the Company should it be required, to meet its liabilities as they fall due for the period which covers the period from approval of the 2025 financial statements through to 2 June 2026. The Company therefore continues to adopt the going concern basis in preparing its financial statements. Further information on the Company's borrowings is given in note 10.

4

OPERATING COSTS

(a) Operating costs include:

2025

2024

£m

£m

Other charges

1.1

0.5

Total operating costs

1.1

0.5

The average number of employees during the year was nil.

None of the directors received any additional remuneration or benefits for their services to this Company and therefore the directors' emoluments were £nil. 

(b)

Independent auditors' remuneration

During the year the Company obtained the following services from the Company's auditors and its associates:

2025

2024

£m

£m

Fees payable for the audit of the Company's annual statutory financial statement

0.1

-

5

NET INTEREST RECEIVABLE AND SIMILAR CHARGES

2025

2024

£m

£m

Interest receivable and similar income relate to:

Interest income in respect of retirement benefit scheme (note 9)

0.6

0.6

Interest income on intercompany loans

1.5

1.2

2.1

1.8

Less interest payable and similar charges:

Dividends on 8.75% irredeemable cumulative preference shares

(1.1)

(1.1)

(1.1)

(1.1)

Total net interest receivable and similar income

1.0

0.7

Dividends on the 8.75% irredeemable cumulative preference shares are payable at a fixed rate of 4.375% on 1 April and 1 October each year. Payment by the Company to the share registrars is made two business days earlier. The payments are classified as interest in accordance with IFRS 9.

6

TAXATION

2025

2024

£m

£m

Tax expense included in Income Statement

Current tax:

Corporation tax on profits for the year

0.2

0.3

Total current tax

0.2

0.3

Tax expense on loss

0.2

0.3

UK corporation tax is calculated at 25% (2023/24:25%) of the estimated assessable profit for the year.

Reconciliation of the tax on profit on ordinary activities

The tax charge for the year differs from the theoretical amount which would arise using the standard rate of corporation tax in the UK of 25% (2023/24: 25%), as follows:

2025

2024

£m

£m

(Loss)/profit before tax

(0.1)

0.2

At statutory income tax rate of 25% (2024: 25%)

-

0.1

Non-deductible expenses for tax purposes:

8.75% irredeemable cumulative preference share

0.2

0.2

Total taxation expense included in income statement

0.2

0.3

7

LOSS PER ORDINARY SHARE

2025

2024

m

m

Basic loss per ordinary share have been calculated as follows:

Loss attributable to ordinary shares

£0.4

£0.1

Weighted average number of ordinary shares

6.0

6.0

6.67p

1.67p

As the Company has no obligation to issue further shares, disclosure of earnings per share on a fully diluted basis is not relevant.

8

OTHER RECEIVABLES

Other receivables comprise loan notes issued to the Company on 1 February 2023 by South West Water Limited (SWW).

Fixed interest rate

Principal outstanding

2025

2024

£25,000,000 fixed rate loan note

6%

25.0

25.0

£1,405,218 fixed rate loan note

4%

1.4

1.4

£72,900 fixed rate loan note

3.5%

0.1

0.1

£54,875 fixed rate loan note

4%

0.1

0.1

£36,740 fixed rate loan note

4.25%

-

-

26.6

26.6

The amounts included above relate to loan notes issued on 1 February 2023 by SWW to the Company. The loan notes reflect the external borrowings held by the Company and as such any maturity dates are linked to the maturity of these external borrowings. All loan notes are unsecured. No expected credit loss provision has been recognised in respect of amounts owed by group undertakings.

9

RETIREMENT BENEFIT SURPLUS

Defined benefit scheme

Pension arrangements for former employees have historically been provided through the Company's membership of the Water Companies' Pension Scheme (WCPS), which provides defined benefits based on final pensionable pay. The Company's membership of WCPS is through a separate section of the scheme. On 7 June 2018, the Trustees of the Bristol Water Section of the WCPS purchased a bulk annuity policy to insure the benefits for members in the Section. Following this, the method for valuing the liabilities of the pension scheme has remained the same. The pension liability, following the purchase of the bulk annuity policy, matches the value of the insurance asset.

The gross pension surplus of £12.3m at 31 March 2025 (31 March 2024 £12.7m) relates to the market value of assets still held by the scheme other than the annuity policy/insurance asset.

Looking ahead, we expect the insurer will take over responsibility for the payment and administration of member benefits. Once this has happened members will no longer be members of the Section, instead they will have individual policies with the insurer. At this point the Section will be wound up. The buy-out of the Section is expected to complete within the next 12 months and therefore the £9.2m surplus has been recognised as a current asset in the Statement of Financial Position.

In June 2023, the High Court handed down a decision (Virgin Media Limited v NTL Pension Trustees II Limited and others) which potentially has implications for the validity of amendments made by schemes, including the Company defined benefit schemes, which were contracted-out on a salary-related basis between 6 April 1997 and the abolition of contracting-out in 2016. This decision was upheld by the Court of Appeal in August 2024. There is potential for legislative intervention following industry lobbying efforts that may retrospectively validate certain rule amendments that would otherwise be held void where the requirements of section 37 were not met. However, the Company has engaged with the Trustee for the WCPS who have confirmed that based on the governance processes in place and reviews of significant deed changes during the period in question, they have no reason to believe that the relevant requirements were not complied with in relation to the Scheme with regard to the relevant period in question. Given that there is no indication of non-compliance with the relevant requirements, the defined benefit schemes valuation as at 31 March 2025 does not reflect potential additional liabilities arising from the Virgin Media case.

Risks of the scheme

Following the purchase of the bulk annuity policy, the balance sheet asset is now largely only exposed to changes in the value of the invested assets. This is because the value of the insurance policy is set to equal the value of the corresponding obligations meaning that any changes in financial conditions or other assumptions will affect the value of the insurance policy and the corresponding obligations by broadly the same amount.

The value of the pension scheme surplus has been restricted by refund tax of 25% (2024: 25%) under UK tax legislation. An increase in the refund tax rate will reduce the net pension scheme surplus.

9

RETIREMENT BENEFIT SURPLUS (continued)

Basis of valuation

The formal actuarial valuation of the Company's section of the WCPS as at 31 March 2017 was updated to 31 March 2025, by an independent actuary Lane, Clarke & Peacock, "LCP", using the following major assumptions in accordance with IAS 19 'Employee Benefits':

2025

2024

Assumptions:

RPI Inflation

CPI Inflation

Discount rate

3.1%

2.5%

5.8%

3.2%

2.6%

4.8%

Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and experience in the UK. These assumptions translate into the following average life expectancies in years:

2025

2024

Life expectancy at age 60 at the balance sheet date

-

Men

26.8

27.2

-

Women

29.3

29.6

Life expectancy at age 60, 25 years from balance sheet date

-

Men

29.3

30.0

-

Women

31.2

31.9

Reconciliation of scheme assets and liabilities:

Assets

Liabilities

Total

£m

£m

£m

Pension scheme surplus at 1 April 2023

124.6

(112.0)

12.6

Section expenses

(0.5)

-

(0.5)

Interest income (note 5)

5.7

(5.1)

0.6

Remeasurements:

Return on plan assets, excluding amounts included in interest income

(1.7)

-

(1.7)

Changes in financial assumptions

-

2.4

2.4

Changes in demographic assumption

Experience adjustments on obligation

-

0.9

(1.6)

0.9

(1.6)

(1.7)

1.7

-

Benefits paid

(7.7)

7.7

-

Pension scheme surplus at 31 March 2024

120.4

(107.7)

12.7

9

RETIREMENT BENEFIT SURPLUS (continued)

Assets

Liabilities

Total

£m

£m

£m

Pension scheme surplus at 1 April 2024

120.4

(107.7)

12.7

Section expenses

(1.2)

-

(1.2)

Interest income (note 5)

5.6

(5.0)

0.6

Remeasurements:

Return on plan assets, excluding amounts included in interest income

(12.6)

-

(12.6)

Changes in financial assumptions

-

11.9

11.9

Changes in demographic assumption

-

1.4

1.4

Experience adjustments on obligation

-

 (0.5)

(0.5)

(12.6)

12.8

0.2

Benefits paid

(8.2)

8.2

-

Pension scheme surplus at 31 March 2025

104.0

(91.7)

12.3

2025

2024

Total amount recognised on the statement of financial position:

£m

£m

Fair value of plan assets

104.0

120.4

Pension scheme obligation

(91.7)

(107.7)

Pension scheme surplus

12.3

12.7

Less: restriction of surplus

(3.1)

(3.2)

Net pension scheme surplus

9.2

9.5

In accordance with IAS19 'Employee Benefits' the value of the net pension scheme surplus that can be recognised in the statement of financial position is restricted to the present value of economic benefits available in the form of refunds from the scheme or reductions in future contributions. As defined under IFRIC 14, the Company believes that it has an unconditional right to a refund of surplus and that the gross pension surplus can be recognised.

This benefit is only available as a refund as no additional defined pension benefits are being earned. Under UK tax legislation a tax deduction of 25% (2024: 25%) is applied to a refund from a UK pension scheme, before it is passed to the employer. This tax deduction has been applied to restrict the value of the surplus recognised for this scheme. The process to buy out and wind up the scheme continues and the Trustee has indicated its intention to return the surplus to the Company. The buy-out of the section is expected to complete within the next 12 months and therefore the surplus has been recognised as a current asset on the Statement of Financial Position.

Sensitivity

The sensitivity of the pension scheme obligation at 31 March 2025

Change in assumption

Increase in assumption

£m

Discount rate

0.1% pa

(0.9)

Inflation assumption (CPI)

0.1% pa

0.8

Life expectancy

1 year

3.2

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous year.

Following the purchase of the bulk annuity policy, any changes in the value of the obligations would largely be matched by a corresponding change in the value of the Section's assets.

9

RETIREMENT BENEFIT SURPLUS (continued)

Total cost recognised as (income) / expense:

2025

2024

£m

£m

Interest income (note 5)

(0.6)

(0.6)

Section expenses

1.2

0.5

0.6

(0.1)

The market value of the plan assets was:

2025

2024

Quoted

Unquoted

2025

%

Quoted

Unquoted

2024

%

£m

£m

£m

£m

£m

£m

Liquidity funds

-

12.4

12.4

12

-

13.2

13.2

11

Insurance policy

-

91.2

91.2

88

-

107.2

107.2

89

Cash

-

0.4

0.4

-

-

-

-

-

-

104.0

104.0

100

-

120.4

120.4

100

The return on the plan assets was:

2025

2024

£m

£m

Interest income

5.6

5.7

Remeasurements

(12.6)

(1.7)

Total return on plan assets

(7.0)

4.0

The current weighted average duration of the expected benefit payments from the Section is around 12 years.

10

BORROWINGS

2025

2024

£m

£m

Irredeemable

Debentures

1.6

1.6

8.75% irredeemable cumulative preference shares

12.5

12.5

14.1

14.1

Total

14.1

14.1

Interest rate

Maturity

Total

2025

Total

2024

£m

£m

Non current loans and borrowings

£1,405,218 Consolidated debentures

4.00%

irredeemable

1.4

1.4

£54,875 perpetual debentures

4.00%

irredeemable

0.1

0.1

£72,900 perpetual debentures

3.50%

irredeemable

0.1

0.1

£12,500,000 cumulative preference shares

8.75%

irredeemable

12.5

12.5

Total non- current loans and borrowings

14.1

14.1

11

COMMITMENTS

The Company had no commitments at 31 March 2025 (2024: £nil).

12

ULTIMATE PARENT COMPANY AND CONTROLLING PARTY

As at 31 March 2024 and 31 March 2025 the immediate parent company for this entity was SWW.

As at 31 March 2024 and 31 March 2025 the Directors considered the ultimate parent and controlling party to be Pennon Group plc.

The smallest and largest group in which the Company is consolidated is Pennon Group plc which is registered in England and copies of its consolidated annual report and accounts are available from Peninsula House, Rydon Lane, Exeter, Devon, England, EX2 7HR.

13

RELATED PARTY TRANSACTIONS

Throughout the year, related parties included members and joint ventures of the Pennon Group plc group of companies and key management personnel. 

The Company has taken advantage of the exemptions with FRS 101 and not disclosed transactions with other wholly owned group undertakings.

Interest received from related parties are disclosed in note 5 above.

14

CIRCULATION

This unaudited announcement is available on the Bristol Water website. Paper copies are also available from the Company's parent company's registered office at Peninsula House, Rydon Lane, Exeter EX2 7HR.