Our key performance indicators (KPIs)

We focus on a range of financial and operational KPIs to help assess our performance.

We believe that the KPIs defined below provide a rounded view as to how we are performing against our primary objectives, helping us on our path to reaching our long-term strategic vision. These KPIs encompass the important areas of customer service and environmental performance, as well as financial indicators, taking consideration of the interests of all our stakeholders.

Financial KPIs

In respect of our financial KPIs, we use underlying profit measures as these enable more meaningful comparisons of the year-on-year performance of our business.

KPIPerformance
Revenue
A definition of revenue is included in the accounting policies.
£1,705m
+4.2%
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2010/11 1513
2011/12 1565
2012/13 1636
2013/14 1705

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Regulatory capital expenditure
Total regulatory capital expenditure during the year (including infrastructure renewals expenditure).
£836m
+6.2%
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2010/11 608
2011/12 680
2012/13 787
2013/14 836

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Underlying operating profit
The underlying operating profit measure excludes from the reported operating profit any restructuring costs and other significant non-recurring items. A reconciliation is shown in Our performance
£641m
+6.1%
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2010/11 596.4
2011/12 594.1
2012/13 604.2
2013/14 641.3

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Underlying earnings per share
This measure deducts underlying net finance expense and underlying taxation from underlying operating profit to calculate underlying profit after tax and then divides this by the average number of shares in issuance during the year. Underlying net finance expense makes adjustments to the reported net finance expense, including the stripping out of fair value movements. Underlying taxation strips out any prior year adjustments, exceptional tax or any deferred tax credits or debits arising from changes in the tax rate from reported taxation. Reconciliations to the underlying measures above are shown in Our performance.
44.7p
+15.5%
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2010/11 35.1
2011/12 35.3
2012/13 38.7
2013/14 44.7

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Dividend per share
This measure divides total dividends declared by the average number of shares in issuance during the year.
36.04p
+5.0%
titlevalue
2010/11 30.00
2011/12 32.01
2012/13 34.32
2013/14 36.04

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Gearing: net debt to regulatory capital value
Group net debt (including derivatives) divided by UUW's regulatory capital value (Ofwat's published RCV in outturn prices adjusted for actual capital expenditure to date). Ofwat's assumed range for 2010–15 is 55% to 65%.
58%
-2%
titlevalue
2010/11 59
2011/12 59
2012/13 60
2013/14 58

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Operational KPIs

These operational KPIs feed through from all of our company objectives: the best service to customers; at the lowest sustainable cost; and in a responsible manner.

Company
objective
KPIPerformanceTarget
Best service to customers
ServiceabilityOfwat rates each company's assets
as 'improving', 'stable', 'marginal' or 'deteriorating' across four categories
covering water and wastewater
infrastructure and non-infrastructure
2013/14:1 x improving, 3 x stable
2012/13: 1 x improving, 3 x stable
2011/12: 1 x improving, 2 x stable
1 x marginal
2010/11: 3 x stable, 1 x marginal
To hold at least a stable rating for all four asset classes, which is consistent with Ofwat's target
Service incentive mechanism – qualitativeOfwat derived index based on quarterly
customer satisfaction surveys, measuring
the absolute and relative performance of the
19 water companies (previously 21 up to
2012/13). Each company receives a score
in the range of zero to five, with five being
the highest attainable score
Continuing improvements
titlevalue
2010/11 21
2011/12 16
2012/13 14
2013/14 7

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To move to the first quartile in the medium term
Service incentive mechanism – quantitativeOfwat derived composite index based on
the number of customer contacts, assessed
by type, measuring the absolute and relative performance of the 19 water companies (previously 21 up to 2012/13). Each company receives a SIM point total, where the lowest score represents the best performance
25 per cent further improvement in score for 2013/14
titlevalue
2010/11 539
2011/12 273
2012/13 179
2013/14 135

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To move to the first quartile in the medium-term
Lowest sustainable cost
Opex outperformanceProgress to date on cumulative operating expenditure outperformance versus Ofwat's allowed operating costs over the 2010‒15
period
2013/14: On track to meet £50m+ target
2012/13: On track to meet £50m+ target
2011/12: On track to meet £50m+ target
2010/11: On track to meet £50m+ target
Total opex outperformance over the 2010‒15 period of at least £50m
Financing outperformanceProgress to date on financing expenditure outperformance secured versus Ofwat's allowed cost of debt of 3.6% real over the 2010‒15 period2013/14: On track to meet £300m+ target
2012/13: On track to meet £300m+ target
2011/12: On track to meet £300m+ target
2010/11: On track to meet £300m+ target
Total financing outperformance over the 2010‒15 period of at least £300m
Capex outperformanceCapital expenditure progress to date against Ofwat's capital expenditure allowance for
the 2010‒15 period, after adjusting, through the regulatory methodology, for the impact of construction output prices
2013/14: On track to meet capex allowance
2012/13: On track to meet capex allowance
2011/12: On track to meet capex allowance
2010/11: On track to meet capex allowance
To meet Ofwat's revised capital expenditure
allowance for the 2010-15 period (after reinvesting
around £200m of
outperformance)
Responsible manner
Leakage – rolling average annual leakageAverage annual water leakage from our network quantified in megalitres per day2013/14: 452Ml/d – Met target
2012/13: 457Ml/d – Met target
2011/12: 453Ml/d – Met target
2010/11: 464Ml/d - Met target
To meet our regulatory leakage target, as set by Ofwat, each year
Environment Agency performance assessmentComposite assessment produced by the
Environment Agency, measuring the
absolute and relative performance of the ten
water and wastewater companies across a
broad range of areas, including pollution.
Improved to second under latest available assessment (2012/13 draft report)
titlevalue
2010/11 6
2011/12 7
2012/13 3
2013/14 2

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To move to the first quartile in the medium-term
Dow Jones Sustainability Index ratingRating awarded to company by Dow Jones using sustainability metrics covering economic, environmental, social and governance performance2013/14: 'World Class'
2012/13: 'World Class'
2011/12: 'World Class'
2010/11: 'World Class'
To retain 'World Class' rating each year

Our performance and the progress we have made against our objectives and their associated KPIs are included within the business performance section on Our performance