Northumbrian Water

Winner of the Queen’s
Award for Enterprise

in the category of
sustainable development

We are proud to provide a sustainable, affordable, clean and safe water supply and to manage and treat the waste water returned to us in a way that protects the environment.

Financial analysis

Results for the year ended 31 March 2009

Highlights

 Revenue:  £694.1m  (2008: £670.4m)
 Profit before interest:  £273.6m  (2008: £277.8m)
 Profit before tax:  £152.7m  (2008: £170.3m)
 (Loss)/profit for the year:  (£11.9m)  (2008: £158.3m)

• Revenue increase mainly reflects the uplift in tariffs to support continuing high capital investment

• Energy costs are over 50% higher than last year, well above the level assumed at the last price review

• Increased interest charges reflecting higher RPI on index linked bonds (£6.2 million) and increased pension financing costs (£7.4 million)

• Deferred tax includes a one-off charge of £117.2 million following the withdrawal of industrial buildings allowances in the Finance Act 2008

• Current funding is sufficient to meet all of the Group’s requirements through to 2011

• Regulated capital investment in the period of £228.9 million (2008: £232.6 million) is delivering regulatory outputs, an extended sewer flooding programme and the advanced digestion plant at Bran Sands

• Planning permission for the expansion of Abberton reservoir granted

• Continued high levels of customer satisfaction

• Proposed final dividend of 8.50 pence (2008: 8.07 pence) per share to be paid on 11 September 2009, giving a full year ordinary dividend of 12.79 pence (2008: 12.07 pence) per share, an increase of 6%

• External recognition of performance through awards, most notably ‘The Queen’s Award for Enterprise: Sustainable Development’ and ‘Utility Company of the Year’