Thank you. If you would like to ask a question, please press star one on your telephone keypad now. If you change your mind and wish to withdraw your question, please press star two. The first question comes from Sarah Lester at Morgan Stanley. Please go ahead. Hi. Thanks so much for taking my question. Sorry, I am gonna jump straight into the environmental aspect. Could you please just walk us through the steps needed to get from the current one star to the four stars by 2024? It's obviously quite a steep trajectory. Any color would be great on how and why you're confident that that's achievable. Thank you. Yes. Morning, Sarah, and thank you for the question. As I said, we're obviously investing significantly, and we are investing for our environmental performance. Now, some of that investment, I talked about stormwater flow releases are covered by things in the Environmental Performance Assessment. What is covered in the Environmental Performance Assessment are pollution incidents, and for the last 10 years we have been one straight/two-star company. Predominantly that's been as a result of our pollution numbers being higher than on a normalized basis we're targeted to achieve. We've been working at pace over the last two years to reduce the number of pollution incidents that we've been incurring. Those pollution incidents, if we don't achieve target, then we obviously end up with a either one or two-star rating as a result of that. If you look beneath the star rating headline, the actual numbers of pollution incidents have been reducing and have been reducing in 2021 from 2020, and they're due to reduce again in 2022. We're driving kind of a sustainable reduction in those numbers. In terms of the trajectory to get us back to target and to four-star company, I said previously that we on a trajectory to get there for the 2024 year, and that's what we're aiming for. We probably won't see a change in our star rating this year. obviously the pollution numbers are getting better, but they're still not back to the original trajectory, but they are getting there. Our star rating for 2022, I would imagine, would stay where it is. We are very much focused on getting back to that 4-star position where we need to get to for the 2024 year. Thank you. Our next question is from Dominic Nash at Barclays. Please go ahead. Good morning, everyone. Couple of questions from me, please, if I may. Firstly, on the revenue number reduction with lower consumption and sort of change in customer behavior, and also with your increased sort of costs, the GBP 225 million of sort of total improvements sort of like coming through or outforms coming through. Can you just give us some color on what of that is recoverable? Like, is the revenue reduction gonna be recovered in future years? How much of your extra spend on, you know, diesel and all the rest of it will be recoverable via sort of the TotEx mechanisms? The second question is a very quick one, is, as I sort of think through the day, what happened about the Interserve Viridor legal action? Have we got any color on that, and do you still have that on your books for how much cash you could still get in if that goes your way? Thank you. Yeah. Morning, Dom. Thanks for those two questions. I think Paul, you're gonna pick those up. Yeah. Happy to. Well, I'll start with your last one first. I think that's very straightforward. The Interserve legacy point from Viridor was all resolved, I'm sure, over a year ago now, and it resulted in a cash inflow of GBP 9 million that we will have reported at the time. There is no further amounts to come or to be recognized in any way. That's totally closed. Now in terms of your second... Oh, sorry, your first question. The first point was around revenue. Now, clearly we've flagged, in our announcement earlier this month, as well as again in the announcement today, we are incentivizing customers in Cornwall for all the right reasons, to very much use less water and save water, to boost the water resilience in that region. With that incentivization, we will give them GBP 60, if we get a reservoir level to 30% in that region by the end of the year. Now, that in itself, could cost up to GBP 10 million, and that would be the cost of the incentivization. In addition to that, if customers are using less, if demand does fall as we're trying to get behaviors to change and trying to get that strengthening the water resilience position, particularly targeted at Cornwall. Now within that GBP 75 million, there's that GBP 10 million financial revenue incentive as I've already mentioned, and that leaves GBP 65 million that has a TotEx focus. That added together with the GBP 45 million is a TotEx reinvestment effectively from that GBP 2 million-GBP 5 million of outperformance. Worth noting that when we're talking about reinvestment, really that's a shared element, 50/50 broadly between customers and shareholder. That's really half that impact is what will come through. Great. Thank you. Our next question is from Mark Freshney at Credit Suisse. Please go ahead. Hello. Thank you for taking my question. Paul, on the debt refinancing that you've done post period end, could you talk us through that in a bit more detail? Where I'm getting to, I mean, real rate, fixed rates are higher, or have been higher, and inflation has also been higher. Presumably it would be swapping index-linked debt into fixed would be expensive at current levels. Can you talk us through the rationale and how that generates value there? Yeah. Thank you. Yeah, of course. Really there's 2 aspects of what we've been doing in terms of debt. One is the swap that you've just talked about there. Now, as you're sort of indicating, whenever you enter into a swap, usually it's on market, therefore there's no value at the point in time you enter it, because it is literally an on-market swap. We will be taking whatever the fixed rate is, relative to the inflation index that we've swapped out. Really it's not about value per se, that's about managing volatility. That will smooth out volatility in the P&L, in terms of this 3-year period and reduce our exposure to further increases in inflation, from where we are now. It's really about inflation expectations as opposed to inflation delivery, because those expectations are baked into the market price. To your point, from a value perspective, you know, it being a swap, there is no value per se from the transaction, but it does provide a lower level of overall exposure to index and debt from this point. That's the first point to note. The second point is we have repaid a Bristol Water bond that was index-linked, a GBP 40 million Bristol Water bond. We were able to do that at a time when rates and particularly bond yields were very elevated, which very much reduced the termination cost of that bond, and that's led to a GBP 20 million gain, which will be coming through in the second half of the year. That bond is very much giving value from that position. Thank you. Our next question comes from Martin Young at Investec. Please go ahead. Yeah. Good morning to everybody. Maybe we could just spend a little more time on the guidance for the full year, particularly the sort of interaction of Slide 14 with what you set out in the technical guidance. Obviously, you've talked quite extensively before about the power costs. You've now put a number on the net financial expense expectations for the full year. But there's obviously been a significant change of direction on revenue, as Dominic has already alluded, you know, to. If we sort of run through those, in my back of the envelope calculation suggests that in the second half of the year alone, you'd have to see a revenue drop of about GBP 40 million to get the full year number below FY 2022. Is that, you know, something that is going to feed through in a negative way to where consensus expectations for operating profit currently sit? Of those significant items that you mentioned on slide 14, are they all within your definition of underlying, or are some of them excluded, you know, particularly with reference to the Bristol Water bond, GBP 20 million? Is that in underlying or outside it? Thanks. Okay. Thank you for the question, Martin. Just taking that last point first. Those significant items, obviously, we've got to work through that process. There's a process to go through in terms of internal governance and of course with auditors. Clearly they are, in their nature, one-off. In the past, for example, WaterShare+, when we've had big financial terminations, they have been deemed non-underlying. You know, you can take from that what you will, but clearly there's a process to go through before we establish finally where we are on that. In terms of the broader guidance, I think, you know, we have perhaps if I take financing, yes, we have given a more specific range. I think clearly we feel able to do that. I think locking those derivatives in is an element of that because it reduces the volatility. As you'll have seen, you know, all companies that have index-linked exposure have seen their interest charge move around quite a lot this year. So putting those swaps in place has reduced that volatility and therefore increased certainty. That's why we've put a figure around that number, and we're expecting our H2 financing cost to be under what our H1 was. So H1 being GBP 75 million and our full year guidance being GBP 130 million-GBP 140 million. So financing costs coming down in the second half of the year. In terms of revenue, I mean, I think probably would repeat what I said to Dominic, really. In terms of guidance, what we're doing is updating for the revenue incentive mechanism that we announced in November. That really is around, you know, encouraging people to use less water, and that will in itself reduce revenue, and that could be between, as I said, GBP 10 million and GBP 20 million, lower in terms of our revenue expectations. The GBP 20 million financial income on the Bristol Water bond termination, is that going through your financial expense line? Or is that gonna be popped out as something that's a one-off? Well, it. Yes. When we've had those in the past, it would have been one-off. Mm-hmm. So. Yeah. As I say, we haven't finalized those points, because they are obviously subject to review and audit. That'll be for the second half. That's where we've had similar one-offs in the past, that's been the case. Okay, thank you. Our next question comes from James Brand at Deutsche Bank. Please go ahead. Hi, good morning. Thanks for taking my questions. I hope you're well. Two questions from me. Firstly, on the GBP 75 million of additional investment that you're highlighting today, of which 45 was announced today, and GBP 30 million had been announced earlier in the month. I wasn't 100% sure what the GBP 30 million that was announced earlier in the month referred to, whether it was. Obviously, you had the announcement out on filling the reservoir, maybe it relates to that, but I didn't kind of feel that that was GBP 30 million of additional investment. Maybe you could just clarify what that GBP 30 million that had already been announced refers to. Secondly, Paul, in your comments, in the recorded presentation, when talking about power costs, there was a comment that regulatory true-up mechanism should partly mitigate the impact of higher power costs. I also just was looking for clarification on that, because I didn't realize there was a true-up mechanism for power costs, but maybe you were referring to something else. Thank you very much. Okay. Thanks for the questions, James. So in terms of the GBP 75 million, as Paul mentioned earlier, in that GBP 75 million is GBP 10 million, which is the revenue incentive scheme, which obviously we announced earlier this month. Obviously, that will be a credit that we're giving to customers' bills. That's the GBP 10 million representing that Stop the Drop campaign. That leaves GBP 65 million, of which the vast majority of that is investments into the asset base, whether that's the china clay pits that we've invested in, the new schemes that are giving us extra resources across the Cornwall region. so there are schemes that we are just completing indeed in the next few days, which are increasing the, the take from some of those china clay pits, either the new ones or existing ones, and we're recommissioning achievement works as part of that as well and then into next year we are again investing into mines quarries, and some small-scale desalination given we've got experience of that, that we've had on the Isles of Scilly. So that's what that investment represents. But as I said, in terms of the funding of that given the two hundred and twenty-five million of outperformance that we have delivered, then obviously you know, a proportion of that is going in towards this reinvestment. I'll hand over to Paul for the- Yeah second question. In terms of that mechanism, so that was referring to the general topics true-up, not any specific mechanism. James? Right. Okay. Fair enough. Great. Thank you. Thank you very much. Our next question is from Verity Mitchell at HSBC. Please go ahead. My new rival called Sarah. Morning. Morning. I've just got a couple of questions. One is, the GBP 20 million on storm overflow investment, was that in the FD? That's just, that's not additional spend. Secondly, well done on refinancing during the volatility. Only a few companies have actually successfully done that's real shareholder value. Good to see that. My question on the GBP 75 million, using desal, isn't that quite a carbon-intensive technology to use for water resources? Those are my three. Thank you. Okay. Thanks for that, Verity. Yeah, just to start with the first one, in terms of the storm overflow investment, and in particular, the GBP 20 million that we referenced, that's part of this GBP 45 million WaterFit that we announced back in April. Again, that's part of this reinvestment of outperformance. That is new investment. No, it wasn't in the regulatory plan per se. That is new investment going in there to sort of make sure we can deliver on that. Second question. Well, I think you were congratulating us on that financing. I was just congratulating you, yeah. Thank you. Thank you very much, Verity. I think your final one was. Oh, the desalination. The desalination, Verity, I think one of the things going through, this yeah, which have been, you know, a record year in terms of, you know, climate impact for us, is that we need to have a diversified mix of sources. In our region, you know, 90%-95% of our sources, you know, rely on surface water reservoirs and in particular takes from the river. Our reservoirs, you know, in the region, certainly for Cornwall, our largest strategic reservoir, Colliford, is used to, obviously come- Using quite low, power technology, desal technology. Well, you're not wrong in the sense it is power-hungry, but what we're looking at is how the renewable aspect of that will work alongside. You know, if you think about the scale of what we're talking about, we're probably talking about single digit megalitres in terms of, you know, what these small kind of plug-and-play containerized reverse osmosis pumps are going to give us. They're going to be useful for us in the regions that have pinch points. You know, one of the areas, you know, where we have in North Cornwall an impact to customers this summer whilst we were delivering all the water that they needed, you know, that we did obviously have the situation where we called upon communities to, you know, stop using their hose pipe. You know, that community is three and a half thousand customers that were impacted. Having desalination plants of a, you know, small scale to help through those pinch point periods will be useful, we are looking at how renewable aspects of that will work for those, for those modules that we're putting in. Great. Thank you. Our next question comes from Martin Young at Investec. Please go ahead. Yeah, hi. Hi there. It's just a quick follow-up question on the guidance, specifically your thoughts on where consensus is at this particular moment in time for operating profits in FY 2023. I believe it to be around about GBP 178 million, you know. Given everything that you've said this morning, are you now suggesting that that number is perhaps, somewhat too high? Yeah. I mean, I think, obviously it's been quite a year in terms of there's many moving parts, and it's been quite dynamic. Obviously, we provided guidance at full year. We provided guidance again, our trading statement in September. We then obviously have issued the announcement at the start of November. I think really our consensus perhaps needs to catch up with that announcement at the start of November. Then, yes, reflect those, particularly that revenue point, I think is the key thing to reflect. That expectation of revenue will and should be lower because we are asking people to use less water. Yeah. That probably hasn't fed through to consensus yet, and obviously we'll be picking that up now we're out of close period. Okay. Thank you. Our next question comes from Dominic Nash at Barclays. Please go ahead. Hi there. Yes. Couple of questions. On Cornwall, your reservoir levels are very low indeed at the moment. The first question is, are you worried at all that we might actually run out of water in Cornwall? The second sort of leading question here is that your business plans that you're gonna be submitting next year, I'm sure you're already sort of assessing what may or may not be in them. How much extra investment do you think we're gonna need for both water resilience, so linking to that first point, but secondly, with all your CSO issues, do you think that you might be needing to put through into your CapEx going forward? Thank you. Thanks for that, Dominic. In terms of Cornwall, we obviously have been doing, you know, a great deal of work this summer, given the climate impact that we've seen for a region that's dominated by surface water, reservoirs and river takes. What we need to do is make sure we've got a diversified mix of sources that we're able to draw on, hence the investment in, you know, further ex-quarries, ex-mines, and some of the small scale desal, which is what we will be on with. Now, in terms of the work we've been doing, running alongside that, we've been working at pace with the regulators and with government to make sure that we're in a good place given the river takes that we rely on, that our abstractions and our permits and our licenses are in a good position for when those rivers are plentiful, that we can take from those rivers to recharge the reservoirs to take us through into next year. I have to say, the regulators have been, and government have been incredibly supportive to work at pace to get those in a good position. It's the abstractions that we're working at pace to make sure the reservoir is getting recharged going into next year. We've got interventions that have just come on stream now, two of them. One, we've increased the take that we can get from one of our china clay takes at Stannon. We've done the same for Halve, which is another china clay take. We've got Hawkstor, which we obviously bought in March this year, which is giving us about 10% of the needs of Cornwall going forward, and that's in days coming on stream. You know, we've recommissioned, and it's gonna be up and running before Christmas, which again, gives us another 10% for kind of Cornwall needs. That plus the Stop the Drop campaign, which again is going well, and we are seeing customers reducing their demand, which has been pleasing to see, given the investment we've put into that scheme, but obviously, you know, helpful in terms of the reservoir levels. That plus these schemes will get us into a better place going into the beginning of new year. The new schemes that we're looking at with the mining water, the quarry pit, and the small-scale desal will come online for next year's summer period. We are moving at pace. Given we bought Hawkstor in March and that's up and running, you know, as of this week, you can see how quickly that we can respond and work at pace to get these resources up and running. Our trajectory for reservoir recharging and the ability for these other schemes to support next year, we're confident that that will be seeing us through into the future. With those schemes that come on and that investment that we're gonna make, the GBP 65 million, which is the GBP 75 less the GBP 10 million we've got on the customer incentive scheme, that should give us about half again of Cornwall's needs going into next summer. That's the resilience that we're building at pace for next year. That probably answers the question twofold in the sense that, you know, yes, we can see a trajectory to get back to where we need to get to, and not having to rely so much on the climate, that will get us there. But also in terms of resilience for the future, you know, we are building that resilience into Cornwall now. In terms of future schemes, you know, there will be more investment, which, you know, I'll come onto in a moment, for the wider region, but in terms of Cornwall, getting ourselves into a good place now. That's the benefit of outperforming, having that agility, being able to move feet and foot, to invest where you need to invest quickly on schemes that weren't in your business plan, that gives you the ability to do that. I have to say, government and regulators have been incredibly supportive and have been working at pace to help us to do that. Can I just follow up with that? Sorry. As you've been explaining all of that, I've been getting this kind of horrible feeling that what you're doing, using your outperformance elsewhere really probably should have been in AMP7 business plans. I know that the Ofwat was focusing on bills rather than on investment in the current review. I'm looking at it kind of going, "This should have been 100% recoverable by you, not 50% recoverable." I'm looking at the numbers that you're looking at. This is epochal, isn't it? Or am I missing? Could you not actually go back and say, "Guys, this should have been in and you didn't, and we would have been in the next AMP, and we're just bringing it forward, so give us a 100% recovery for it. And by the way, it's over 10% of our revenue. I think, Dom, you know, we're focused on making sure we're delivering for all our stakeholders. You know, we're delivering the double-based returns. We said we were gonna do that. We have outperformance over and above that. We are reinvesting it into the asset base to deliver. In terms of what we've experienced in this region this year, if you look at any of the reports on it, this has been a record year in terms of climate impact. You know, could it have been foreseen? Well, it's happened, we need to invest. We've got the headroom to do it, we're getting on with it. I think that kind of, you know, deals with that aspect. In terms of what comes next and future investment, you're right, there will be a requirement, having experienced this, there will be a requirement to for us to invest further. I spoke previously about our acquisition of Bristol Water and the ability to then think about the Cheddar Two reservoir up in Bristol. That opens up opportunities for us to develop a resource there that helps Wessex Water with its resourcing requirements, that then perhaps frees up half the reservoir we share with them in Wimbleball that, again, allows reservoir volumes to be used at south and west as required. There will be obviously costs for that going forward that will be part of the future plan. I think, to be quite honest, Dom, you know, we're in a good place. We're outperforming, we're reinvesting. Shareholders are getting what we said they would get with, you know, doubling the base returns. We'll obviously look to the new plan for further resilience going forward. Great. Thank you. Our next question is from Bartłomiej Kubicki from Société Générale. Please go ahead. Good morning. Just one question from my side. I just wonder what's your intention to do with the inflationary increase in tariffs for next year? Whether you're going to undertake the full inflationary increase, which could be around 10%, or whether you are planning to do some deferrals, and if so, how would it work? Thank you. Yeah. Hi, Bartek. So in terms of, in terms of tariffs, obviously, we're very much aware of the cost of living crisis and the impact that has on our customers, probably most notably from energy bills, not from water per se. But that said, obviously, it's a challenging time for everyone. So we've certainly, when we prepared our indicative tariffs, we've looked very hard at what levers we have and where we can try and mitigate some of that impact, particularly in one period alone. So we have been speaking with the regulator in that regard and seeing what we can do for deferrals. What we're proposing would effectively defer elements into the next regulatory period on an MPB mutual basis. We are certainly looking at what we can do, and we're trying to reach an outcome which would mean both Bristol Water and South West Water average bills go up by certainly less than the headline rate of inflation. Yes, we are actively seeking to do that. Okay. Thank you. Maybe if I may, one more. Do you think while speaking on the next regulatory period, the regulator will be again focused on affordability? This time the focus will maybe increase more towards higher investments, given whatever you are saying on water resilience and what has been said on the CSOs issues? Thank you. Good, good question, Bartłomiej. I mean, I think, we always have to be mindful of affordability. You know, you've got to look at the cost of living crisis and, you know, the support that customers need, you know, is obviously quite acute through that. You know, that's twofold really. One is making sure that, you know, we are able to target those customers who find themselves in difficult circumstances and make sure we're giving them the support that they need, but also being efficient with what we deliver. Now, that efficiency, you know, helps in terms of mitigating bill increases. You're right, there is investment on the horizon given the government legislation in the area, certainly around the environmental aspects that will need investment. We will obviously be seeking to get the balance right for the next business plan. Yes, there will be more investment that we see on the horizon. How efficient we are with that is gonna be incredibly important and how we protect those customers who find themselves in difficult circumstances is gonna be part of the background. Okay, thank you. We have no further questions on the call at this time, so I will hand the floor back to Susan. Okay. Thank you very much, Seth. Thank you everybody for joining us this morning. As you can see from our results, it was a set of resilient financial and operational results. Our long-term fundamentals as a group remain robust. Thank you. Thank you all. This concludes today's conference call. Thank you all very much for joining. You may now disconnect your line.