South East Water DB pension surplus rises to £25m

South East Water’s defined benefit pension scheme surplus increased to £25.5m, as of 31 March 2019, its annual financial report has revealed.

This represents a £1m increase from March 2018, when the surplus stood at £24.5m.

The water firm’s pension funding improvement mirrors the company’s financially successful year, which saw turnover and profits increase, primarily driven by an allowed price increase during the year of £9.2m.

Its DB scheme liabilities decreased slightly, from £3.28m to £3.19m, while its pension assets increased from £27.8m to £28.7m.

South East Water also revealed that it has secured funding to replace £311m of debt which matures on 30 September 2019, including £175m from US insurance companies and pension funds in the form of a private placement.

Furthermore, it received a £54m equity injection from its shareholders, which is “consistent with the commitment they provided in our business plan”.

Commenting on the report, South East Water chairman, Nick Salmon, said: “Our plans prepared during 2018/19 are the most ambitious we have seen and will support a long-term vision and legacy for the region.

“I look forward to the year ahead as we work together to prepare for the start of a new five-year period and complete the commitments we made through to 2020.

“Our team has worked hard throughout the year to achieve the stretching objectives set in the 2015 to 2020 business plan, providing great service to all our household customers and to water retailers who rely on our wholesale water services.”

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