Sleight of hand

Article Abstract:

Anglian Water plans a share buyback of up to 10% of its stock, in addition to a rebate for customers totalling 12 million pounds sterling. The buyback follows trends in the electricity industry and will increase the company's earnings per share. Higher dividends will also be possible due to the buyback. The UK regulator for the industry argues that rebates should be used for distributing efficiency benefits. Companies need to achieve a balance between interests of shareholders and customers if they are not to be subject to stricter regulation.

Securities, Anglian Water PLC

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Yorkshire Water: water off a duck's back

Article Abstract:

Yorkshire Water has reached an agreement with the industry regulator, the Office of Water Services (Ofwat). The company has agreed to limit price increases to the rate of inflation and invest in the control of leaks and flooding of sewerage, in addition to improving the supply of water. The company should benefit from enhancing its image by co-operating with Ofwat. The cost of the measures at some 40 million pounds sterling should not have a major impact since the company has annual profits of some 200 million pounds sterling.

Water supply, Laws, regulations and rules, Yorkshire Water PLC, United Kingdom. Office of Water Services

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Tap into water: despite its fast-rising dividends and sparkling profits, the water sector remains deeply out of favour. There are good reasons why this shouldn't be the situation

Article Abstract:

Water companies have been paying higher than expected dividends with pledges to buy back shares. However share prices have dropped and the sector is yielding 6.4%, a critical level. There is criticism that customers should have been awarded larger rebates if water companies can afford to buy back shares. However it is felt by some that water regulator, Ian Byatt, has been able to move the water companies towards self-regulaltion.

Finance

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