Pennon Group Plc

Okay, well, good morning, everybody. I'm Susan Davies, CEO of Penon Group, and I'm joined by Paul Boot, who's the Group Finance Director. And I'm delighted to be here today in person to present Penon Group PLC's results for 2021-22. So I'm delighted we've had resilient performance, very much delivering on our strategy, building momentum, driving sustainable growth across the group. Now, we are a purpose-led business. Our purpose is bringing water to life, and we have 3,000 colleagues across the business who are innovating, seeing opportunities where others see obstacles, and talented people very much delivering for our customers and communities. Now, with the cost of living crisis, we know at Penland it's incredibly important that we support our customers. And we are supporting our customers financially in three ways. First of all, delivering on our commitments and our business plan efficiently. So keeping bills as low as possible for the services that we deliver. We have an affordability toolkit in place for customers who find themselves in difficulty. We can tailor individually for those customers support as and when they need it. And thirdly, we have our innovative water share scheme, which is something that nobody else has in the sector, where we are able to share on a timely basis financial outperformance with customers. Again, at a time when they most need it, either to get a reduction on the bill or to join the 1 in 16 households we now have as shareholders across the group. So the last two years, if it's taught us anything, whether it's the pandemic, whether it's the cost of living crisis I've just talked about, the climate emergency, or indeed the very distressing war in the Ukraine, there are headwinds that businesses obviously have to make sure they can manage through. And I'm very pleased with Penon. and its results for 2021-22, and our delivery that we have had. Robust, resilient financial and operational performance. In terms of the financial metrics, revenue has grown organically 6.7%, EBITDA growth up 14.7%, and EPS growth up 5%. We acquired Bristol Water during 21-22 and we've had 10 months of EBITDA contribution from Bristol Water, some 53 million, ahead of acquisition expectations. And very pleasingly for water companies, their business plans very much focused on delivering outcomes and attached to them are those financial incentives, those ODIs, Outcome Delivery Incentives. And for 2021-22, both for Bristol Water and for South Wales Water, moving from a net penalty in 2021 to a net reward in 2021-22. In terms of the returns for the water businesses, good, strong returns delivering on all areas, whether it's totic sufficiency, ODIs of financing outperformance, and you can see there the numbers for South West Water, Bristol, and the group return on regulated equity of 8.9%. And that translates into, for the first two years of this delivery period to 2025, outperformance of £150 million to date. Now, in terms of the group, we also have profitable business-to-business retailers, Penn and Water Services, and through our acquisition of Bristol Water, a 30% investment in water-to-business. Now, supporting the business in terms of its performance is a good, robust balance sheet and a finance portfolio that's very strategically positioned with an optimal level of index linking in place. And that balance sheet and the gaming levels are providing headroom for growth and investment. And moving to that investment in 2021-2022. First of all, the Bristol acquisition, obviously, in terms of the process we went through with the CMA, cleared at phase one, and that's enabled us to identify £50 million of efficiency savings that we will see in the period to 2025. Alongside investing in our largest ever capital investment on the waterside, some £240 million spent on the asset base in 2021-2022. And of that 150 million outperformance, 130 million of it is going towards the environmental enhancements that we will be putting forward and investing into the asset base. So a good set of results, sustainably positioned and well positioned for the future. So that's what we've been doing. In terms of our approach to business, very responsible, sustainable business. So I think about the environment and the work we have been doing. Last year, we launched net zero plans to 2030, both for Bristol Water. and for South West Water. And there are different pillars to those plans, but one of the key pillars is making sure that we are increasing our renewable energy investment, and we're able to then generate by 2030 50% of our requirements from renewable energy. In terms of the green recovery initiative that we put forward to the regulators, we got that cleared in 2021-22, so some £8 million will be going into nature-based solutions and other projects and initiatives. Very much pilots, very much shaping our plans for what will be our next delivery period. And a few weeks ago, we launched our WaterFit initiatives, a step change for river and coastal quality, very important for our southwest region. So all in all, very much delivering on our largest investment programme that we've had for 15 years on the watersides. And there'll be about 1.4 billion spent in the period to 2025. So in terms of customers and delivering for customers and communities, I said there were three things that I think is really important for us to do. The first one is make sure that we deliver efficiently and that our bills can be the lowest that they can be for the services that we deliver. So therefore, it's pleasing to see that South West Water customers will be receiving a bill cut for 22-23, lower bills than they were 10 years ago. And Bristol Water, through the acquisition, has enabled us to, again, think about reducing the bills for those going forwards. Alongside those bill positions is our water share scheme. So in 2020, £20 million of that performance went back to customers. Either they could choose to invest in Pennon and get shares, and one in 16 customers did that, or customers could get 20 quid off their bill. That was in 2020. We are also going to give another £20 million back to customers this summer, and again, broadening it to the new customer base for Bristol with the option for customers to get money off their bill at a time when they most need it, or indeed become shareholders in the business. Now, in terms of the business and the group and the colleagues who work within the group, I'm really pleased to say that we've been accredited for the second year running as a great place to work. And we are very much a company that has an inclusive culture where everyone counts. And we are embracing and promoting equality. We were the first water and sewage company to sign up to change the race ratio and the 10,000 black interns initiative. In terms of building on our credentials, in 2018 we were accredited with a fair tax mark, really important for our customers and something that they were very keen to see us do with all the interactions we have with our customers. It's something they felt was very strong that a company such as ours in the South West seems to do absolutely the right thing. And I'd just say we've kept that accreditation year after year since we first got it. And we've also got strong and improving ESG performance metrics, and we're one of only three companies to sign up to science-based emission reduction targets. So good performance, 21-22, operating in a sustainable way. underpinning long-term value. So resilient performance in terms of our business plans, both for South West Water and for Bristol Water. Very much on with delivering against those year two into the plan. 80% of outcomes on track for South West Water. Bristol improving from 70% to 75% for 2021-22. And Penn & Water Services, our business-to-business retailer, 90 million of contract wins, good quality contracts that will... allow that performance to continue into the coming years. We're reinvesting our performance, either to pre-fund green recovery for £8 to £2 million, the water fit, which is going to improve rivers and coastline in our region, and the acceleration of the water share. We're responsibly deploying our capital, so gearing across the group with the work we've done post our transformation has reduced, and across the water business we're at 61%, very much in line with the economic regulator's view of an efficient water company. We've put some funds into the pension scheme that is sustainably managed and on a technical provisions basis is fully funded. We've obviously reinvested in UK water, a very confident outlook for the water sector. And in terms of the buyback, £200 million complete and £200 million to deploy. All that leads us through to long-term sustainable growth and expectations for RCV growing of more than 40% over the period to 2025, though it's supporting our shareholder dividend for 2021-2022 in line with policy and growing CPIH plus 2%. And so with that, I will hand over to Paul, who will take you through the financials.

Thanks, Susan, and good morning, everyone. So I'm pleased to be reporting a resilient set of financial results today, very much underpinned by our growth strategy. We've obviously acquired Bristol Water in the period, and as you can see, that's contributed significantly to our EBITDA, 53 million coming through in the year. Remembering that's 10 months' worth of contribution, so certainly more to come there. Organic revenue growth, 7%. That's really driven by business customer demand improving, and those contract wins we have in Penn and Water services. Now, a key financial highlight for us is always our sector-leading efficient interest rate in South West Water. So that's 3.4% for this financial year just gone. That's really underpinned by our debt mix that we have in that business with around 20%, 25%, 25% to 30% of our debt in South West Water being index linked. That number is a little bit higher than it was last year, and that reflects that inflation coming through, but still sector-leading and well-positioned. In terms of our earnings per share, that's gone up by 5%, really reflecting the contribution of Bristol to the group in earnings per share of 50.2 pence. And that really supports the dividend of 38.53 pence, growing in line with our stated policy. So looking at the income statement, the underlying income statement in a little bit more detail, worth noting that all the numbers for the financial year 21-22 include 10 months' worth of contribution from Bristol, so a step up in most of those numbers. But also, I'm just going to focus a little bit on those higher interest costs coming through in the financing line, as well as the tax line, where we've had a few changes too. So in terms of the net finance costs, we've had about a 20 million step up in that financial year due to inflation, probably around 5 or 6 million in Bristol Water and 15 million in South West Water. And that really reflects probably a half-year impact, because if you think back to last year, the first half of the year inflation was actually fairly in line with long-term averages before it did step up into the elevated positions that we're now seeing. So about 20 million step up there. And that led to our profit before tax falling year on year. However, when you look at a profit after tax basis, we have an increase. And that reflects tax deductions that have come through based on our capital spend and our responsible pension contributions. And that profit after tax increase very much driving our earnings per share growth. Focusing on now revenue. I think it's worth noting that 104 million coming in from Bristol Water, 10 months there, so more to come again when we have 12 months in the coming financial year. And then I'll just speak about COVID for a little bit, because over the last 18 months, I've talked to you about how our demand has changed with COVID being around for the past two years. And for this financial year, 21-22, we've seen business customer demand rebound, coming back to near pre-COVID levels. And that's also been the same, as you can see on that chart, for developer services and new connections. If you think back to 2020, in that first half when the restrictions were very severe, that activity did almost nearly cease. So that has rebounded well. On a non-household side, we are seeing revenue slightly reducing, demand slightly reducing as people are returning to work and perhaps using less at home. But worth noting overall, demand is still higher than it would have been pre-COVID and is higher than it was last year. So we do have high demand in our region. And as you can see on revenue, we've also got the increases in Penn and Water services, both from the business customers returning to higher levels of activity, but from those contract wins that have come in over the past year or so. Moving on to profit before tax, here I've set out the numbers for Bristol Water, so you can see the contribution coming through, a solid contribution above our initial expectations, £9 million of profit before tax, and there's that £20 million for the interest number. I'll just maybe just dwell on that again. So, as I say, about six million of that relates to financing from inflation, high inflation. So when the inflation does return to the long term average, as it will inevitably do at some point, might not be through this year, but at some point it will come down again. Then that interest cost will step back down. That's the same for the 15 million increase that we've seen on South West Water this year. Worth noting, Southwest Water, we have had higher revenues coming through, but we've also had higher costs. So we've got a 9 million reduction in EBITDA year on year. A key aspect of that, I'll just focus on for a moment, are power costs. So in Southwest Water, our power costs are around 47 million. 28 million of that relates to wholesale. Sorry, 24 million of that relates to wholesale power prices in the market. Now, we have seen higher demand in our region. That means we have higher power usage as well. When we have higher demand, that means there's more water pumping around the network, both in terms of clean water and wastewater. And with that comes higher power costs, and therefore we saw a step up of around about 5 million from the previous year. And finally, on this slide, I'll just touch on Penn and Water Services. We're really pleased that it's recorded its first profit before tax, and it's actually recorded 1 million profit before tax. That's really pleasing, putting it in a good place to continue to sustainably grow. In terms of tax, I mentioned earlier that we've got a reduced current tax charge this year, which is the case. It's down at 3.5%. Two aspects really driving that. The first are the super deductions that the government has introduced, encouraging capital spend in the UK economy. As Susan has mentioned, we've had higher capital spend ourselves in this financial year, as well as those allowances coming through. That gives us a significant deduction and £50 million worth of extra capital allowances coming in. We also get deductions for our pension scheme contributions, and over the past couple of years, we've put about £70 million into our principal pensions contributions, utilising some of those period of proceeds, and that drives deductions as well over a number of years. It gets spread over a number of years. The final thing on this slide is deferred tax. So as people will be aware, all companies are hit by deferred tax when the UK headline rate changes, moving up to 25%. For us, that's a deferred tax charge of about £100 million, and that comes off our statutory profit and loss account. But for us, it does still leave us with a statutory profit even after that charge. Moving on to our cash flow position, worth noting on this slide that, of course, Bristol is now included, so both cash inflows and capital investment are stepped up because of Bristol being part of the group. I would note that we've had strong cash collections in terms of customer accounts, and that really does talk to the efforts and the work we do with our customers on affordability, making sure they're on the right tariffs, helping them where we can, helping them access the benefits that they can. And that not only helps our customers in these times of high inflation, but it also helps us in making sure that the debt we charge is then very collectible, and that's been coming in, and that's stayed robust through the year. In terms of capital investment, that's increased by about £70 million, but I'll touch on that on the next slide. Then we have the second section of this slide, which is all about the deployment of the Viridal proceeds. So over the past year or so, we've been doing that. And in the past financial year, the key aspects were the £1.5 billion special dividend that was paid in July and the share buyback programme of £400 million, of which £200 million has now been deployed. Now, as I've said, I think at the half-year presentation for us, following the acquisition of Bristol Water, the net debt number that we're focused on now is very much the one that excludes acquisition-related fair value adjustments, and that really makes sure that we're looking at a net debt number that's comparing apples with apples and is on a basis that actually reflects the principle indebtedness that we will actually repay on that debt. Moving on to capital expenditure, as I say, it's increased 70 million year on year. So half of that principally relates to Bristol Water now being part of the group. But the other half in South East Water is around acceleration of activities, looking to improve environmental performance in terms of pollutions, as well as driving down leakage. And then also looking at water treatment works, new water treatment works in the Bournemouth region, which have now commenced construction. And we've got two water treatment plants that we're looking to do in this AMP. Similar technology to the Plymouth Mayflower plants that some of you may have visited. And we're expecting that to come in within the allowances of around about £165 million for those two plants. Moving to the balance sheet now, since we've had the acquisition of Bristol Water, RCV has stepped up to £4.2 billion. That compares to the water business net debt of £2.6 billion and puts us in a sustainable gearing position. You may also remember as part of the Viridor deployment of proceeds, we talked about $100 million being invested from Penn and into the water businesses. So $45 million of that was done in the last financial year, and that went into Southwest Water. So that's within that 61.7 gearing number that you see there for southwest water. And that means there's another 55 million for Pennant to inject into the water businesses. Once that's done, we expect the gearing level to be 61.4%. And as we've said before, we expect that to continue to de-gear over the regulatory period and very much towards off what's notional 60%. In terms of our debt mix, I mentioned at the start, and you can see it there on the right-hand side, that we have a relatively low level of index linking compared to the sector at large, and that really does put us in a good place in this high inflationary environment that we currently see. And that really underpins that 3.7 effective interest rate for the water business. So that's the water businesses combined. That's made up of 3.4 for South West Water and 5.6 for Bristol Water. How do we do that? One of the key ways we do that is through our sustainable financing framework. We've revamped that during the year, made sure it's in line with the latest bond principles and loan principles. And we're pleased to say that we issued 300 million of debt in the year, and all of that was through the framework. I'd like to take this moment to thank all the banks in the room for their continued support and working with us to make sure when we do issue that debt, it is done through the framework. So we do appreciate that. So thank you. And also just to give you a heads up that we'll be looking to refinance and put in place new levels of debt of around a similar number next year. So I'm sure we'll have some good discussions on options around that in the weeks and months ahead. And then just a final slide for me on, I suppose, inflation principally, macroeconomic outlook. And this really reflects guidance that we recently gave at our spotlight presentation back in April. So with inflation comes near-term pressures in terms of our cost base and our financing. Principally, that is an energy cost for us. And in terms of the financing, as I say, the important thing to remember there is it's very much a temporal effect. As soon as inflation returns to the long-term average, the interest costs will step back down. But the really important thing to remember is that we also have our revenues and our RCV growing in line with inflation, and that will more than offset those headwinds in terms of totics costs and financing costs. And in terms of that RCV growth, when you look at the inflationary environment at the moment and you add in the impacts of the Bristol acquisition and the green recovery, we are expecting to see over 40% RCV growth over K7, and that really does put us in a good position to continue to deliver sustainably and drive value into the future. With that, I will hand back to you, Susan. Great. Thank you.

Okay, thanks, Paul. Thank you for taking us through the financial highlights. And I'd just like to take you through some of the highlights from last year. So very much a key highlight has been the acquisition of Bristol Water and expanding our reach across the great south-west. Now, in terms of bringing Bristol into the group, It's very much about looking to bring together the best of the best. We're going to be deploying our proven integration blueprint. We've got a 24 month program to integrate the business where we'll be looking at common systems, common processes, supply chain efficiencies and making sure. that we take the best from the best with South West Water and Bristol. So we've now got our expanded talent pool of 3,000 colleagues who are absolutely focused on innovating to deliver across the region. We're already partnering on 11 different innovation projects in the sector, and we have invested, from a Pennon perspective, into a purpose-built facility that's going to be focused on water and the environment with the University of Exeter. It is not just for the UK water sector, but also internationally as well, looking at innovative solutions to the challenges that we face. So in a really good place in terms of bringing together the business into the Pennon Group. In terms of the organisation and for those 3,000 talented colleagues we've got across the organisation, we are promoting a learn and learn culture. We are a member of the 5% Club and the 5% Club is all about making sure that you've got structured training in place for at least 5% of your colleagues across the business any one time. I'm very pleased to say with our 600 apprenticeship and graduate scheme entrance that we're going to have to 2025, we'll be very much exceeding that. And we're absolutely focused on increasing gender diversity and promoting those equal opportunities. We've got 30% female diversity and we are an employer of choice for female talent in our region. Now, I talked about a greater stake in a save for customers in the southwest, and we will be expanding that scheme for the Bristol customers who came into the group last year. So in terms of talented people delivering for customers and communities, when customers think about service, we want to make sure we get things right and we get things right first time. How do we know how that's going? Well, we look at our complaint numbers. And I'm really pleased to see the chart at the bottom. We're more than halving complaints across the group, whether it's South West Water, whether it's Bristol Water. Now, in terms of overall experience, there is a regulatory measure around that called CMEX. And for Bristol Water, a very pleasing 6 out of 17, and South West Water ranks at 12. So plenty there that we can take in terms of learnings to improve staff resources performance going forwards. In terms of community support and engagement, following the restrictions being lifted through the pandemic and lockdown, we've relaunched our educational outreach programme. We've reached out last year to over 5000 pupils across the region. Now, why do we do that? Well, certainly in schools, you've got very receptive audience. They're environmentally savvy and they're very much our change agents for the community. So when we talk to children about water efficiency and what that does to improve water quality, the planet, they really much take that on board. And also on the wayside, really talking to them about the impacts of things that go down the loo. As we have our campaigns, like the three Ps, just pee, paper and poo, that's all that can go down the loo. And the kids really love it. And that then goes home and it gets out into the community. And it gives us an easier time on our network. So that's why we do that educational outreach program. We've got our community funds in place that we started 18 months ago. And we've been helping over 100 organizations over the last year. In terms of our affordability measures and what we're doing to support customers, so remember I said at the beginning, three ways we support the bills, the affordability toolkit and the watershed mechanism. In terms of those affordability measures, very much tailored to individuals. and making sure that we can support them either with reduced tariffs or, indeed, the 6,000 visits that we undertook last year with very well-trained people in our organisation who help individuals to maximise their income, not just to pay water bills, but to pay all the other bills that they're facing at this point in time, and a really important initiative that we have going. We've been helping over 100,000 customers this last year with their affordability issues. So I'm just going to quickly talk through some of the water metrics and then go on to the wastewater metrics before we finish. So it's great having Bristol and South Wales Water in the group because you can start comparing, not just from an industry sector, but also company to company, how things are going and then think about some of those integration points and how we can learn the best from the best from Bristol. each of those businesses. So key metrics that we have on the water side, so in terms of the health of the infrastructure, mains repairs, if you look at these charts you can see South Water Bristol and then the red lines are the performance commitment levels from the regulatory business plans. So where we're below the red line, that's good. So South West Water in Bristol, you can see improvements year on year and below the commitment levels for 21-22. Lots of innovation going on in the network and great things that we can learn from each other on the supply chain. In terms of treatment works and unplanned outages, again, very much below the commitment levels. For Bristol Water, there's a slight blip around the storm units, but actually performing well and underlying performance is good. And we've got Mel Karam here today, who's CEO of Bristol. And I'm sure if you've got questions, then he'll be able to answer those later. Leakage. We've got our leakage reduction plans in place and pleasing to see both below and on track with the performance commitments both for South Water and Bristol and across the group, 7% reduction. That's all around the technology that we have in the network, being able to spot where there are issues and to make sure that we can intervene and fix those where they occur. In terms of the next slide, just three more metrics to talk through. Compliance risk index. So that's all about the quality of the water that we're producing. And you can see there both the South Water and Bristol, we're slightly elevated above the performance commitment. So there is more to do there. but that was impacted by one of events for last year for both Bristol and South West Water. So what are we doing about it? We're investing, we're accelerating service reservoir and tank enhancement activities. And in particular for the South West Water blip, that was around some of the Bournemouth treatment works and one of the assets there. And we have our new investments going in for two new water treatment works, which will be completed by 2025. Supply interruptions, no customer wants to be without water, so very pleasing to see the improvements and the reduction there, especially with Bristol Water year on year under the performance commitment level. Then on the right-hand side, this is all about the customer experience, whether you're a household, whether you're a developer, or whether you're a retailer. What this chart tells you, if you're above the line or on it, you're in a good place, if you're below, Not so good. And we see that across the group in a pretty good place for those measures. Southwest water on the CMEX, as I said earlier, things that we can learn in the group from Bristol water to improve that. So just moving on to wastewater. And again, the metrics, same in terms of performance commitment being the red line. Performance commitment is the red line. Actual performance is the green bars year to year. These internal sewer flooding, sewer collapses, external sewer flooding, they're all about the state of the asset base. So you can see there an improving trend, very much below the performance commitment level. And in fact, for internal sewer flooding and sewer collapses, very much delivering already on our 2025 targets. So asset place in a good position. In terms of other work we've been doing in the catchments for last year, if I start with bathing water and the bathing water quality results. Now, people come to the southwest. It's a fantastic region, and it is the destination for bathing waters. We have over a third of the nation's bathing waters in the southwest. So we have been investing to make sure we can support good quality bathing waters. And in fact, for the first time ever last year, at 100% of the bathing waters achieving quality standards, which is a great place to be. So what have we been doing to achieve that? Well, one little example, one of the bathing beaches, Coon Martin, regained its designated bathing water standard. status last year and that was us working with the community both on some nature-based solutions to alleviate some of the impacts around flooding and other aspects so tree planting as well as some storm attenuation tanks to improve the performance there. River water quality improvements. We're on with reducing our impact by a third to 2025. Schemes underway to enable us to achieve that. And what we are working on through the Green Recovery Initiative is the work with our partners on the rivers Dart and Tavey looking at piloting, bathing water designation for those rivers which will be for the first time in our region. So it really will be the region for quality water. And monitors were on with 80% of those installed to ensure we are tracking water quality across the region. Capturement management, we've been pioneering for the last 15 years. You can see there the heterage that we've improved and the peatland we're restoring, which helps not just with water quality, but also with carbon capture. And the trees that we have been planting are very much on track for our 250,000 target by 2025. Arzacilli, we took that on in 2020. I haven't talked too much about that, so I thought it was worth just putting it on this slide. We have been supporting those islands, very much focused on quality first for water, improving water treatment on the main island of St Mary's. and the other satellite islands, and very much underway, given it's a water-stressed area on those islands with our water efficiency programme. 90% of customers now on a smart meter, which obviously they didn't have before, so we can track consumption and think about how we work efficiently on those islands. So I'm just going to touch on this slide for a moment. Since I took up the role of CEO, this has been a real focus area, making sure we can reduce our impact on the environment and reduce pollutions. It's a continued area of focus. The chart on the right-hand side is our pollutions performance every year for the last 10 years. We've had our best ever performance for 10 years, for 2021. where we have reduced by a third the number of pollutions that we have, so that's some 150. There is more to do. We have a culture change programme in place. We have many activities that are focused on using the data and information that we've got in a very sophisticated way to target for our 19,000 kilometres of network where we need to intervene to alleviate pollutions. We have intervened in 210 hotspots last year and improved the assets by those interventions, alleviating pollutions for the future. And in terms of sewer blockages, we have reduced the number of blockages that we have seen, noting that about 70% of the blockages that we get are to do with wet wipes. So there are education programs that go around that. We very much want to influence customers to not put wet wipes into the system because that obviously creates issues and potential pollutants. But as I say, more to do in that area. We have consistently been a one, two star company for the last 10 years. We have plans to be four star by 2024. And it's a real focus area for us. So overall, in terms of our performance, I said at the beginning, both for Salvos Water and Bristol Water, for our outcomes that we put into the business plan, we're in a pretty good place for those across the group. You can see there those that are doing well and those where we have the areas of focus. But pleasing to see, certainly for Bristol Water, improving last year. And our overall returns on a regulatory basis, whether it's TOTEX efficiency, whether it's financing outperformance where we have the most effective financing costs in the sector, overall our RORIs are in a good place and from a group we're in a good position to deliver. Water retail, as Paul said earlier, we've got Penn and Water Services that's delivered a profit in 21-22. And Water to Business, through our investment in Bristol Water, we acquired a 30% stake in Water to Business. Again, a very good performing business. And actually, if you see the chart here, Penn and Water Services and Water to Business, in terms of complaint numbers and satisfaction, very much at the right end of that chart for retailers in the sector, so in a good place. So we are well positioned to deliver for the remainder of the regulatory delivery period. Very much focused on innovation driving our performance. And if any of you caught the capital markets event that we did in the autumn last year, you'd have seen some of those innovations. And that's helping us to sustain that performance. In terms of our focus, environmentally focused with our green recovery proposals, in terms of improving our impact on the environment and WaterFit which we launched a few weeks ago again making sure that we can target investments in our assets to improve the water quality in our region and for us our bathing waters where we got 100% in terms of good or excellent for last year what we want to do is extend that bathing season have it all year round water quality for people who want to enjoy that in our region and a very good sustainable platform for the business retail that we have across the group. So I will finish there. Resilient performance, very much delivering on our strategy, building momentum, driving that sustainable growth, resilient financial and operational performance for 21-22. So with that, I think we can go to Q&A.