Business Weekly - Cambridge, UK

The Huntingdon company reported a strong financial performance from AWS (Anglian Water Services).

It also flagged up a £2.8bn forward order book for its infrastructure management businesses.

Chief executive, Chris Mellor said: “AWG’s performance over the last year has been encouraging in both our regulated water and wastewater business, AWS, and in the divisions which are driving growth in our infrastructure management business.

“AWS has continued to perform strongly, both financially and operationally. Turnover and operating profits for the year are up, while costs are down, despite inflation and new regulatory obligations.

“AWS has also delivered a good performance to its customers. The Drinking Water Inspectorate has recognised its drinking water quality as among the best in the country, while river water quality is the best ‘since before the industrial revolution’ according to the Environment Agency.

“Utility Services and Government Services form the basis of our infrastructure management growth strategy as they both have an ability to earn attractive margins on a growing portfolio of long-term contracts.”

Mellor said that - as previously signalled - Powermarque and parts of Purac International had performed poorly. Also, a few large legacy contracts in Anglian’s project management services division had taken longer and cost more than expected to resolve.

“Action has been taken to improve management and controls. We are also no longer undertaking the type of contracts that gave rise to these problems. As a result, I am confident that these problems are now behind us,” he said.

Shareholders approved Anglian’s proposals to increase the group’s borrowing capacity and bondholders have agreed revised debt transfer proposals.

Mellor said: “We continue to work hard to complete the refinancing, which will improve the financial efficiency of AWS and also enable our infrastructure management businesses to realise their full potential. It will also enable a significant return of capital to shareholders which is targeted for September.”

 The residential services division of Colchester based Care UK has been awarded a two-year contract with East London and City Trust for Tariro House, Hackney to provide a low security rehabilitation unit for adults with mental illness.

The award follows the construction of the unit in 2001 and will cover 10 of the 16 beds at Tariro House, bringing the home to full occupancy. Care UK has invested approximately £1.7 million in the home.

Electrocomponents plc, the major electronic, electrical and industrial supplies high service distribution group, is continuing the strategic development of the group despite tough trading conditions.

Sales of continuing operations at £759.6m were down 7.8 per cent in the last year while operating profit at £108.7m slumped 17 per cent and pre-tax profit was 15 per cent lower at £105.5m.

Chairman Bob Lawson, said: “In spite of the tough conditions, it is important to emphasise that management has continued the strategic development of the group.

This continued strengthening and enhancement of the group’s capability is critical to creating the platform to generate a superior and sustainable earnings stream.

“This enduring characteristic of Electrocomponents is the foundation block upon which future value is built. The growth potential of our businesses remains unchanged and will continue to be realised as economic conditions improve.”

Xansa, the Herts based business consulting, IT and outsourcing company has secured a contract with BT for outsourcing many of its key accounting and financial services.

Worth a minimum of £250 million to Xansa over seven years from July 1, the contract involves the transfer of around 570 employees from BT’s accounting and financial services function, including its enabling technology support.

It is one of the largest business process outsourcing contracts ever awarded in the UK.  Each month, Xansa will process over £1bn worth of payments, 100,000 payslips and 10,000 on-line purchases. 

Ian Livingston, BT Group FD, said: “This transaction is in line with BT’s stated strategy of maximising shareholder value by focusing on its core telecommunications business. 

“Xansa has been chosen because of the cost savings – guaranteed at £93 million across the seven years. It was also chosen because of the service quality it will provide to BT, and the development opportunities it offers our people transferring across.”