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SES Water’s shareholders have agreed to inject £22 million into the company to ensure its financial resilience.
The equity investment is revealed within the company’s annual accounts.
The full £22 million is expected to be received before 1 December, with the first £2 million already transferred.
SES states that “these equity injections allow the company to deliver its capital investment programme for the next 12 months and meet its liquidity and financial covenant requirements”.
Earlier this year, the company’s owners launched a strategic review of the business with a view to selling.
The annual accounts add that “the Board expect that a new owner would be required as part of taking on our water supply licence to confirm appropriate ongoing funding arrangements”.
Total revenue for the company increased by 7% to £67.4 million however operating expenses increased by 11% to £62.8 million, giving SES an operating profit of £4.3 million.
The accounts reveal that SES Water’s executive team did take home a bonus this year, with chief executive Ian Cain pocketing an additional £111,000 on top of his £264,000 annual salary. Cain also received a £124,000 payment under the Long-Term Incentive Plan (LTIP) scheme.
Meanwhile the company’s chief financial officer Paul Kerr received a £52,000 bonus and £76,000 LTIP payment on top of his £189,000 salary.
It comes following pressure on all water company bosses to forgo their bonuses this year after bosses at four companies declared that they wouldn’t take home additional pay due to poor performance across the sector.
The firm will however not pay out a dividend. The annual accounts add: “While operational performance remained strong throughout the full year to 31 March 2023, the Board determined not to declare a final appointed dividend payable in respect of the year ended 31 March 2023 having reflected on the financial results for the year, the pressures on gearing and financial resilience in the high-inflation environment and the increased levels of uncertainty in the context of the shareholders’ strategic review.”
Cain added: “During the last 12 months, the world around us has continued to face significant challenges. […] The water industry as a whole is addressing a number of negative perceptions, including summer hosepipe bans, sewage concerns and supply interruptions.
“We are a water-only company which does not treat or discharge sewage and we managed to avoid hosepipe bans last summer but we do not take this for granted and will continue to work, independently and collaboratively, to address the challenges the industry faces and improve performance.”
He added: “Our shareholders have also engaged financial advisors to undertake a strategic review of the business. The review is ongoing, and our shareholders have yet to reach any firm decisions. In some circumstances such reviews can lead to a sale of the business. Despite these challenges, I’m pleased with how we’ve continued to deliver on our performance commitments, while continuing to provide a resilient service of the highest quality.”
Meanwhile SES chair Dave Shemmans added: “It’s been another demanding year for the company but one in which everyone has worked together to overcome a number of significant challenges.
“Winning the Utility Week Innovation Award for our smart network was well-deserved recognition from the industry for the diligence of our team working to fix leaks as quickly as possible. We know there is always more to do, and I know the team will keep pushing forward with this technology to help drive down leakage even further.”
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