We're proud to deliver water and wastewater services to more than 4.6 million customers across the South East.
By protecting future water resources, embracing technology and working with community organisations and stakeholders to provide a more tailored service to customers, we aim to become a leader in our sector.
Some of our other highlights for the past year:
Perhaps the most important commitment we made to customers was to provide value for money while helping those experiencing financial difficulties when paying their water bills.
Responsive customer service
By adopting a proactive, insight-led approach we have improved customer satisfaction levels over the past year. We launched online services and more than 80,000 customers registered for a self-serve account by year end. We also made improvements to our billing process to ensure every customer is paying the right amount.
Our affordability teams have delivered some great results over the past year, getting the message out to customers that we are here to listen and support them through the payment process. We also began to put into place our new Community Engagement Programme to support those customers most in need.
Better information and advice
We've spoken to customers through targeted campaigns, addressing a number of key issues they told us were important to them, including saving water, energy and money, transparent and fair charges for services and how to prevent flooding and damage to properties and possessions.
As we enter the third year of the current business plan period of 2015 to 2020 Southern Water has seen some significant improvements in both its operational and customer service performance.
At the same time we have been working hard to make improvements in more challenging areas such as data quality and customer service.
Chief Executive's summary
As the new chief executive of Southern Water, first of all I would like to say how delighted I am to have joined the business.
Our Strategic Report, in the following pages, will focus on our collective performance over the past year. While it is pleasing to report that we have achieved a number of successes, I will also be highlighting some of the key challenges we face as a business and some of our opportunities for transformation in the future.
Chief Executive Officer
Providing safe, clean drinking water is undoubtedly the most important aspect of our service in the eyes of our customers.
This year we exceeded our target for compliance against the Drinking Water Inspectorate’s (DWI) quality measures, achieving 99.96%.
We have committed £1.8 billion to maintain, enhance and extend our wastewater and water operations between 2015 and 2020.
This investment, combined with a programme to educate our customers about how to Keep It Clear and reduce sewer blockages, is having a positive effect on the way we deliver our service.
We reached or exceeded targets in several areas to deliver on the promises we made to our customers. For example, we have maintained water pressure in customers' homes and reduced the number of complaints about discolouration of drinking water.
In fact, one of our initiatives which is indirectly helping to tackle discolouration has helped emergency crews to save lives, and could even become a template for other water companies. See our 'Water to the rescue' case study.
Meanwhile, our wastewater performance has been good this year. The number of sewer blockages and external flooding events are down, fewer customers are bothered by smells from our operational sites.
We always aim to operate our business in a way that respects the environment and protects resources into the future.
The number of excellent bathing waters in our region currently stands at 51, a big improvement on last year’s 43.
We are also ahead of our promise commitment of 15% to increase the amount of renewable energy we use across our operations, recording a figure of 17% during 2016–17. We are pleased to report that the greenhouse gases produced by our operations have also gone down again this year.
During 2016–17 we became the first water company to meet a tough new international environmental standard. The ISO14001 International Standard for Environmental Management Systems was changed in 2015, when companies were given three years to bring their systems up to the new level.
It has taken us less than a year, with the audit report praising our high level of management leadership and commitment and our engagement with our stakeholders and employees.
As a provider of water and wastewater services to an ever-increasing population, we need to continue to improve our service offering, providing innovative solutions to ongoing challenges such as climate change, population growth and water scarcity.
We are already developing these solutions in a number of areas:
We also continued to participate in the government's Carbon Reduction Commitment Energy Efficiency Scheme, and we made our key sites more energy efficient. Our operational emissions for 2016–17 were 8% below those of the previous year.
During 2016–17 our operating profit was £258.9 million, a reduction of 9.0% from the previous year.
The 2015–16 operating profit included a one-off benefit from the refund of historical business rates charges of £13.3 million. Taking this into consideration, our underlying operating profit reduced by £12.3 million and was principally the result of increased depreciation charges, which result from the continued significant investment in our assets.
In total our revenue increased by £6.0 million to £809.7 million reflecting increased customer numbers from new connections and higher levels of billed consumption in part offset by an overall reduction in our tariffs. This increase in revenue was offset by a similar increase in underlying operating costs.
During the year we have undertaken a number of initiatives specifically targeted at improving our customer service performance. These increased our operating costs by £4.0 million and have focused on reducing complaints, assisting customers in financial hardship and improving our future bad debt performance.
The costs associated with these initiatives together with inflation on our cost base were, in part, offset by the delivery of operating efficiencies totalling £8.6 million. These efficiencies were delivered through a focus on reducing our power consumption, in particular minimising usage at peak times and making improvements to operational processes, for example reducing chemical usage and waste disposal costs.