of our shareholders have registered addresses in the North West
The board as a whole accepts its responsibility for engaging with shareholders and is kept fully informed about information in the market place including:
- Makinson Cowell produce an annual survey of shareholders, the results of which are presented and discussed by the board;
- the board receives regular updates and feedback on activities within investor relations and reports from sector analysts to ensure that the board maintains an understanding of investors' priorities; and
- the board welcomes engagement with institutional investors - both executive and non-executive directors are available to meet with major shareholders, this is also one of the specific roles of the senior independent director.
We are always keen to hear the views of and engage with our shareholders and investors. We have an active investor relations programme, the activities include:
- the CEO and CFO have a regular programme of meetings with representatives from major shareholders and met with around 100 institutions over the course of the year. This is supplemented with meetings hosted by our investor relations team. The programme covers institutions based in the UK, Europe, North America and Asia/Pacific region;
- the CEO and CFO undertake presentations to groups of institutional shareholders and investors, both on an ad hoc basis and linked to our half and full-year results announcements;
- the board receives regular feedback on the views of its institutional investors following on from the CEO and CFO's meetings;
- close contact is also maintained between the investor relations team and a range of City analysts that research United Utilities; and
- in total, we met or offered to meet with 43 per cent by value of the overall shareholder base, which represents 79 per cent of the targetable institutional shareholder base (when adjusting for shareholders who do not typically meet with companies, such as indexed funds).
In meetings with investors, frequent areas of common interest include operational and environmental performance, customer service, capital investment, efficiency initiatives and regulatory outperformance. Investors are always keen to observe financial stability, and investors are interested in the level of gearing versus regulatory assumptions, cost of finance, debt portfolio and maturity profile, future financing requirements and dividends. The price review process and submission of our regulatory business plan is a key area of interest for them.
Despite the privatisation process being around 25 years ago, we have retained a large number of shareholders with registered addresses in the North West of England - in fact over 59 per cent. We have historically always held our AGM in Manchester, which enables our more local shareholders to attend the meeting. These shareholders are also our customers.
There is a considerable amount of information on our website; we produce an online report which provides information on our key social and environmental impacts and performance during the year. Together with the annual and half yearly results announcements, our annual report and interim management statements, all of which are available on our website for shareholders to access, these are the principal ways in which we communicate with our shareholders. Our secretariat and investor relations teams, along with our registrar, Equiniti, are also on hand to help our retail shareholders with any queries they may have.
Relations with other providers of capital
Running a water and wastewater business, by its very nature, requires a long-term outlook. Our regulatory cycle is based on five-year periods, and we raise associated funding in order to build and improve our water and wastewater treatment works and associated network of pipes for each five-year cycle. We are, as a group, heavily reliant on successfully acquiring long-term funding from banks and debt capital markets to fund the improvements we need to fund our capital investment programme.
This requires a long-term commitment and involvement from our credit investors who lend us the funds with the company paying them a return for doing so. We arrange term debt finance in the bond markets (with maturities typically ranging from seven years to up to 50 years at issue). Debt finance is raised via the group's London listed multi-issuer Euro Medium Term Note Programme, which gives us access to the sterling and euro public bond markets. Committed credit facilities are also arranged with various relationship banks on a bilateral basis. Additionally, the European Investment Bank (EIB), which is the financing arm of the European Union, is our single biggest lender, currently providing circa £1.5 billion of term funding (of which circa £1.1million has been advanced and £400 million remains available to draw down) used to support our capital investment programme. The group currently has gross borrowings of £6,069.3 million.
Given the importance of debt funding to our group, we have an active credit investor programme co-ordinated by our group treasury team, who provide a first point of contact for credit investors' queries. One-to-one meetings are held with credit investors through a programme aimed at the major European fund managers known to invest in corporate bonds, that may be existing holders of the group's debt or be potential holders. Regular mailings of company information are sent in order to keep credit investors informed of significant events. The treasury team has regular dialogue with the group's relationship banks and the EIB.