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ANNUAL REPORT Contentscontents 2020 ANNUAL REPORT ContentsContents Group Highlights 3 Strategic Report 4 Executive Summary South Staffs Water SSI Services Echo Corporate Social Responsibility Financial Review Governance 36 Section 172 (1) Statement Board of Directors and Executive Team Directors’ Report Corporate Governance Report and Board Committee Reviews Directors’ Responsibilities Statement Independent Auditor’s Report Statutory Accounts 60 Consolidated Profit & Loss Account Consolidated Statement of Comprehensive Income Consolidated Balance Sheet Company Balance Sheet Consolidated Statement of Changes in Equity Company Statement of Changes in Equity Consolidated Cash Flow Statement Notes to the Consolidated Cash Flow Statement Notes to the Financial Statements Contact Details 89 22 SouthSouth Staffordshire Staffordshire PlcPlc AnnualAnnual ReportReport 20202020 Group Highlights South Staffs Water H2Online customer exceeded the engagement targets on 11/15 initiative successfully performance launched for South commitments Staffs Water SSI Services year- on-year profit growth of 6% Increased Aptumo Hydrosave secures presence in new leakage Australian water contract with market Thames Water Turnover increased by 1.5% to £271m South Staffordshire Plc Annual Report 2020 3 Strategic Report | Executive Summary Executive Summary Group overview, strategy and PR19 price review process and the South Staffs Water also achieved business model Covid-19 outbreak. The division the second lowest number of burst South Staffordshire Plc (the has risen to these challenges, and mains in ten years. However, this is “Company” or the “Group”) is has continued to deliver the high- set within the context of two major an integrated services group, quality and resilient services that bursts it experienced on the same comprising: customers expect and pay for. length of water main in Tipton • South Staffordshire Water PLC in October 2019 and February (“South Staffs Water” or the In December, it received Ofwat’s 2020. These serious incidents “company”), a regulated water final determination on its business had an enormous impact on the supply company with operating plan for 2020/25. We are delighted local community and damaged areas in the South Staffs and that within this package South customers’ trust. To mitigate this, Cambridge regions; Staffs Water will be making the South Staffs Water provided practical • SSI Services (UK) Limited (“SSI largest investments it has made help and support to those residents Services”), a specialist essential for more than 20 years – driving affected by both incidents. It also services provider to owners water quality improvements for replaced the entire 300-metre length and operators of infrastructure, around 1.7 million people. While of main to reassure the community including design and installation, Ofwat agreed with the proposals that something like this would not testing, repair and maintenance; to upgrade the strategically happen again. • Echo Managed Services Limited important water treatment works at (“Echo”), a specialist outsourcing Hampton Loade and Seedy Mill, the SSI Services business and leading developer of determination overall is challenging After a difficult year in 2018/19, SSI billing software, providing multi- and South Staffs Water will have to Services delivered an improved channel customer contact services, continue to work hard to deliver its performance in 2019/20, with profit and comprehensive debt and ambitious targets. growth of 6% compared with the revenue management solutions; previous year. The division has and At the end of the reporting year, continued to grow its business • Office Watercoolers Limited South Staffs Water experienced outside the UK water sector and (“OWC”), a provider of drinking an unprecedented situation with has extended its operations across water dispensers to businesses the Covid-19 outbreak. This meant a number of markets. For example, across the UK, adapting very quickly and working during the reporting year, the OnSite SSI Services, Echo and OWC are non- in different ways – with field-based Rail department secured framework regulated divisions. teams observing social distancing, contractor status to Network Rail and nearly all office-based for drainage services. OnSite’s The Group’s strategy is to: employees working from home. experience and expertise was also • continue to meet all our legal It also meant moving quickly and called upon in August 2019 to help and regulatory obligations and proactively to provide and promote secure the structural integrity of the commitments; a range of support packages to Toddbrook Reservoir dam, which • grow in all our operations by help customers impacted by the was in danger of collapsing as a providing high levels of service outbreak. result of heavy rainfall. quality and innovation while remaining price competitive; and We are pleased to report that Within the SSI Services division, • maintain a safe and enjoyable South Staffs Water exceeded the the focus has continued to be working environment for all our targets on 11 out of 15 performance on innovation with the ongoing people. commitments for 2019/20. This is development of the HydroSEAL the best result for five years and pipe leak repair solution. This Details of how we implement this is set within the context of some contributed to another successful strategy are set out in the Strategic of the targets becoming more year for Hydrosave, which delivered Report. challenging over that time. For growth of 20% compared with example, it outperformed the the previous year. Its new leak South Staffs Water leakage targets in both regions by detection framework with Thames It has been a busy year for South 2.3% and 5.2%, giving the division a Water came into effect, while its Staffs Water, dominated by the strong foundation on which to build leakage framework with Scottish conclusion of the regulator Ofwat’s for the next five years. Water was renewed for another 4 South Staffordshire Plc Annual Report 2020 eight years. OnSite also had a strong Despite these challenges, the for South Staffs Water. Operating year, delivering profit growth of business continued to maintain profit for the year was £24.3m (2019: 13%. The sewer lining department new and existing services to clients. £37.0m). There was an increase in the achieved its financial targets, while Grosvenor Services continued to year in capital investment to £52.2m the drainage services department saw support its energy clients and also (2019: £51.2m), with the operational increased revenue generated from continued to deliver its revenue delivery of these programmes its flow monitoring and sewer jetting protection work. still representing a significant activities. achievement. It has been another successful IWS was restructured during the year for Aptumo, Echo’s innovative Employees year; it is now in a position to utility billing platform, with the first The Group’s continued progress this deliver sustainable future growth. implementation projects here in year is the result of the commitment Operational delivery has also the UK and in Australia due to go and professionalism of our people to improved, with the successful delivery live in 2020/21. The business has provide good value in the services of several large projects. G Stow continued to support the UK and we provide to our customers. We remains well placed to generate Australian water markets and at the are passionate about the safety, increased revenue in the year ahead. time of writing had just announced wellbeing and development of our During 2019/20, it installed a new its second contract in Australia. It people and examples of this are borehole at Seedy Mill and secured is planning further geographical highlighted in the divisional reports a framework with Thames Water for expansion in the year ahead. below. The Executive Management bespoke pump supply. Team and Board thank all our Echo continued to support South colleagues for their hard work and As most of the division’s employees Staffs Water in its commitment contribution to the success of the operate remotely and often in to increase the number of digital Group over the past year. challenging environments, health services available to its customers and safety is a key concern. We are and in growing the use of its Outlook disappointed to report that the successful mobile app. In addition, it As the Financial Year to March 2020 division suffered six RIDDOR events helped to raise awareness of South was drawing to a close, the Covid-19 during the year, compared with zero Staffs Water’s schemes to help and pandemic started to emerge resulting in 2018/19. SSI Services carried out support vulnerable customers. It in the nationwide lockdown in the full investigations for these events, also enhanced the experience for UK in late March. Throughout the and updated practices and training Northern Ireland Water’s customers period since then South Staffs Water to eliminate further the likelihood of with the introduction of social media has continued to provide essential such events recurring. and webchat functionality. Finally, water services and customer support. it continued to grow its offshore Parts of the Echo, SSI businesses and Echo operation in India, expanding the Office Watercoolers were inevitably The past year has been one of software teams. impacted by the interruption to challenge and change for Echo’s core normal business and working utility markets, with some companies In the year ahead, Echo will continue arrangements but as
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