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Increased profit and cost efficiencies at Affinity Water

Affinity Water has announced a pre-tax profit of £57.6M for the 12 months ending March 2015, an £11.9M rise over the previous year. Turnover was virtually unchanged at £291.4M.

Affinity Water has re-examined its procurement and design processesAffinity Water has re-examined its procurement and design processes

The company's operating costs fell £3M to £132.9M, bringing total savings to £26M since the start of AMP5 in 2010. The efficiency savings primarily derived from renegotiating supplier contracts "on more favourable terms"; increasing the productivity of teams and existing supplier contracts, pumping system and source optimisation; and reducing customer contact through digital engagement. Re-examination of Affinity's procurement and design processes, for instance, resulted in a reduced unit cost of pipe renewal.

Affinity Water’s chairman, Dr Philip Nolan, said: “Since 2010, we have been focused on driving up service levels whilst at the same time realising £26 million in operating cost net efficiencies. This has resulted in lower bills and a better service for customers. Between April 2010 and March 2015, we invested over £460 million enhancing and maintaining our extensive network of assets to prevent failure and secure a resilient supply.

“The improvements that we have made provided a strong foundation for our Price Review 2014 (PR14) Business Plan. This helped us to deliver a plan that Ofwat had confidence in. In April 2014, Ofwat announced that we were one of only two companies to achieve enhanced status for our Business Plan. In February 2015 we accepted Ofwat’s final determination of price controls."

Author: Maureen Gaines, Editor, WET News Find on Google+
Topic: AMP Cycle , Policy & Regulation
Tags: water companies , AMP5 , Procurement


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